This report is read as follows:
Cost decline exceeds price decline, coal gross margin widens, superposition increases, first-half performance growth, in line with expectations; Q3 coking coal growth association or month-on-month decline, increasing power investment does not disturb high dividends.
Main points of investment:
Downgrade profit forecast, maintain target price and increase rating. The company achieved revenue of 4.24 billion yuan (- 5%) and net profit of 1.12 billion yuan (+ 27%) in the first half of 2023. Due to the possible decline of Q3 coking coal coking price in Anhui region, the company has lowered its EPS of 23,25th year to 1.81amp 1.90max 1.95.In view of the excellent cost control, it has maintained the target price of RMB10.60and increased its holding rating.
Costs fell more than prices fell, coal gross margin widened, superposition increased, and performance increased in the first half of the year. 1) the company's 23H1 achieved raw coal output of 4.48 million tons (- 10%), commercial coal sales of 3.79 million tons (+ 4%), and the company achieved sales growth by reducing inventory; 2) the price of coal per ton was 1051 yuan per ton, down 81 yuan from the same period last year, or affected by the decline in the price of mixed coal and the reduction of coking coal prices in June. According to wind, the average plate price of Huaibei coke clean coal car is 1991 yuan / ton in June, which is lower than that of 2395 yuan in May. 3) the cost of coal per ton is 545 yuan / ton, which is-119yuan compared with the same period last year. The coal business achieved a gross profit of 1.92 billion yuan (+ 13%) and a gross profit margin of 48.2% (+ 7PCT).
Although both volume and price have fallen, the cost has been greatly optimized and Q2 performance has dropped month-on-month. The company's Q2 realized a net profit of 510 million yuan (+ 2%) compared to-16%. The main reasons are: 1) the volume and price have dropped, the sales volume of Q2 commercial coal is 1.82 million tons (- 8%), and the price per ton of coal is 1028 yuan / ton (- 45 yuan) in the same period. Coal revenue is 1.87 billion yuan (- 11%); 2) the cost of coal per ton is 507 yuan (- 73 yuan), and the cost of Q2 coal is 920 million yuan (- 19%).
Q3 coking coal growth association or month-on-month decline, increasing power investment does not disturb high dividends. 1) the average plate price of Huaibei Coke Clean Coal car Q3 is 1890 yuan / ton, down by 350 yuan compared with the previous year; 2) the company plans to set up Suzhou Wanheng New Energy with a 46% equity investment of 440 million yuan and build a 800000 kilowatt new energy project; 3) if the dynamic dividend rate is 11% based on the dividend rate of 48% continued in 2023.
Risk hint: coal prices fell more than expected; production fell more than expected.