Event: the company released its 2019 annual report. The company achieved operating income of 1.89 billion in 2019, down 19.1% from the same period last year; net profit from home was 560 million, down 17.9% from the same period last year; and 540 million was deducted from non-home net profit, down 20.1% from the same period last year. The company plans to pay 0.5 yuan to all shareholders for every 10 shares, the first dividend since 2014.
The business of gas well engineering has declined and the financial subsidy policy has changed. In 2019, the company's coalbed methane sales of 780 million cubic meters increased by 14% over the same period last year, and the ratio of procurement to sales increased by 5.8%, reflecting the effective expansion of the downstream market. Revenue from gas well construction projects totaled 250 million yuan, down 71% from the same period last year, dragging down the annual performance. The top five customers of the company account for 78% of the sales, of which the related parties account for 58%. The reduction of gas well construction business is mainly due to the reduction of coalbed gas well construction projects in the high gas mines served according to the needs of gas control. In the supplementary notice on June 2019, the subsidy method of "substituting awards for compensation" was proposed, so the company recognized the income according to the actual central financial subsidies and local financial subsidies at the same time according to 0.1 yuan / cubic meter.
The ban on restricted shares has been lifted. On April 24, 1.91 billion restricted shares were lifted, accounting for 20% of the company's total shares.
In 2016, the company raised 1.32 billion yuan from seven institutional investors, including Xinda assets, Shaanxi Changda Oil and Gas and High Energy Tianhui, for asset restructuring, with an offering price of 6.9 yuan per share lock-up period of three years. The current stock price is close to the fixed cost increase of strategic investors. Considering the difficulty and economy of mining, the company changed the implementation site of the original fund-raising project from "Zhengzhuang Mining area, Zhaozhuang Mining area, Changping Mining area" to "Zhengzhuang Mining area".
Shanxi Gas Group is an important driver of the energy revolution. Shanxi Coal Group, the controlling shareholder, plans to increase the capital of all the shares of the company and the relevant gas assets of the group to Shanxi Gas Group. The assets of Shanxi Gas Plate will be reorganized and integrated on the platform of Gas Group, and strategic investors will be introduced into the platform. After the reorganization, the company will become the core subsidiary of Gas Group. With the establishment of Shanxi Gas Group, as the core coalbed methane production enterprise, the company has obvious regional advantages and industrial chain advantages in resource reserves, transportation network, retail terminal and so on. it is helpful to expand the coverage areas of coalbed methane exploration, extraction and coalbed methane well construction, and further consolidate and strengthen the company's position as the main force of gasification in Shanxi.
Profit forecast and investment suggestion: the construction demand of gas mine gas mine mainly served by the company decreased, and the EPS of the company in 20-21 was 0.69 yuan and 0.80 yuan respectively (before it was 0.86 EPS 0.95 yuan), and the new EPS in 2022 was 1.01 yuan. 2020 is the key year of Shanxi energy revolution and state-owned enterprise reform. As the leader of coalbed methane, the company is expected to become the vanguard of reform and maintain the company's "overweight" rating.
Risk hint: the financial subsidy of coalbed methane is declining; the time and progress of gas group integration are uncertain.