Introduction to this report:
Coal production and sales have continued to rise, and prices have declined in 23 years; 24Q1 performance is expected to drop slightly, and the year-on-year pressure on performance H2 is expected to ease; the power generation business is gradually expanding, and the dividend rate is steadily increasing.
Key points of investment:
Maintain an “Overweight” rating. The company announced its 2023 annual report. The company achieved operating income of 7.786 billion yuan (-7.24%) and net profit to mother of 2,036 billion yuan (-19.43%), in line with market expectations. Considering the recent decline in coal prices, we reduced EPS to 1.70 yuan (-0.2 yuan) and 1.73 yuan (-0.22 yuan) for 24 and 25, and added 1.78 yuan for 26 years. According to the comparable company's 2024 average 9x PE, the target price was raised to 15.3 yuan (+4.7 yuan) to maintain the “gain” rating.
Coal production and sales have continued to rise, and prices have declined somewhat in 23 years. In 2023, the company's raw coal production volume was 9.4394 million tons (+1.07%), commercial coal production was 7.4549 million tons (+6.07%), and commercial coal sales were 7.618,600 tons (+8.19%). The average sales price for the full year of 2023 is 959 yuan/ton (-158 yuan/ton), and the ton cost is 516 yuan/ton (-34.4 yuan/ton).
The 24Q1 performance is expected to decline slightly, and the year-on-year pressure on performance H2 is expected to ease. 2024Q1 We estimate that the company's overall sales volume will remain flat year on year and slightly decline, and overall performance is expected to decline slightly. Considering that the company's coking coal and thermal coal are all dominated by Changxie, and against the backdrop of a clear decline in coal prices recently, it is expected that 24Q2's performance will still be under slight pressure, but it is judged that the overall performance fluctuation is limited.
The power generation business is gradually expanding, and the dividend rate is steadily increasing. In 2023, the company completed a power generation capacity of 3.356 billion kilowatts (including Qian Yingzi Power Generation Company), and the Qidong distributed photovoltaic power plant was put into operation during the reporting period; the 300 MW wind power project of Wanheng New Energy and the distributed photovoltaic project in the Huaibei mining area were approved and construction will soon commence.
In 2023, the company announced a dividend of 0.85 yuan per share, with a dividend rate of 50%. The dividend rate for 21-22 was 43.25% and 47.76%, maintaining a steady upward trend.
Risk warning: The macroeconomy fell short of expectations; coal prices fell more than expected.