The company received a government subsidy of 153 million yuan and confirmed 131 million yuan in 2020. The company announced that subsidiaries received government subsidies of about 153 million yuan from January 1 to June 24, 2020, mainly for the central and provincial governments to earmark financial subsidies for coalbed methane extraction and utilization in 20120. of this amount, about 10.18 million yuan is earmarked for 2018 and 2019 for the use of central and upgrading financial subsidies, so the final recognition of the current period is about 131 million yuan; it is expected that the amount of subsidies recognized in the current period will be included in the current profits and losses.
The company has won six new blocks with a total area of 1539.05 square kilometers. According to the announcement of Shanxi Provincial Department of Natural Resources on June 11, "the results of bidding and transfer of successful candidates in Shanxi coalbed methane exploration blocks in 2019", the company won 6 new blocks. They are: Hongdong West Block (283.11 sq km), Hongdong Block (278.21 sq km), Linfen Block (215.7 sq km), Linfen West Block (284.84 sq km), Linfen South Block (299.85 sq km), Yongle South Block (177.34 sq km), with a total area of 1539.05 square kilometers.
Liulin Shixi, Wuxiang South, Heshun Hengling blocks have been exploited for a new period of 5 years. According to the latest announcement of the Natural Resources Department of Shanxi Province, the newly approved mining period of Liulin Shixi, Wuxiang South and Heshun Hengling blocks being exploited by the company is 5 years, and the proposed construction capacity is 100 million square meters per year.
At present, the country and the province are actively promoting the relevant reform and exploration and development of coalbed methane blocks, and the company is actively promoting the development and construction of coalbed methane blocks. With the progress of coalbed methane exploration and development technology, the support of industrial policies and the continuous promotion of exploration, the future growth of gas volume is worth looking forward to.
Profit forecast: we expect the company's operating income from 2020 to 2022 to be 19.2,21.2 and 2.54 billion yuan respectively, the return net profit to be 5.7,6.8 and 780 million yuan respectively, and the EPS to be 0.59,0.7,0.8 yuan respectively. At present, the new block of the company is still in the active exploration stage, and it is expected that the growth of gas volume will lead to the growth of the company's performance and maintain the "recommended" rating.
Risk tips: the new block mining progress is not up to expectations, coalbed methane subsidies back slope, industry policy changes, macroeconomic decline.