Event: The company announced its 2023 results. In 2023, the company achieved net profit attributable to owners of the parent company of 5.18 billion yuan, a year-on-year decrease of 26.3%; operating income of 28.52 billion yuan, a year-on-year decrease of 18.6%.
The cost of tons of coal has declined markedly, and the operation of the coal business is stable. In 2023, the company's coal business achieved revenue of 24.8 billion yuan, a year-on-year decrease of 24.6%, coal business costs of 12.1 billion yuan, a year-on-year decrease of 28.4%, and gross profit of the coal business of 12.7 billion yuan, a year-on-year decrease of 20.6%.
In terms of production and sales, in 2023, the company's coal output was 45.91 million tons, up 1.5% year on year, and sold 41 million tons of coal, down 11.7% year on year; in Q4 2023, the company's coal production was 11.03 million tons, up 0.1% year on year, down 0.8% month on month, and sold 9.4 million tons of coal, down 16.9% year on year and 6.3% month on month.
In terms of price profit, in 2023, the company sold at 606 yuan/ton, down 14.6% year on year, the cost of a ton of coal was 296 yuan/ton, down 18.9% year on year, gross profit of 310 yuan/ton, down 10.1% year on year; in Q4 2023, the price of the company's ton of coal was 602 yuan/ton, down 18.2% year on year, up 6.8% month on month, and ton coal cost 266 yuan/ton, up 11.8% month on month.
The company has plenty of room to increase its coal production capacity. The company accelerated the pace of construction of 7 yuan and Boli. 7 yuan entered the joint trial operation stage in 2024, and Boli will have the conditions for joint test operation by the end of 2025. 1) Seven yuan coal mine:
The production scale is 5 million tons/year, and the geological reserve is 2.06 billion tons, mainly anthracite; 2) Boli coal mine:
The production scale is 5 million tons/year, and the geological reserve is 91 million tons, mainly poor coal and anthracite.
The new energy business is growing steadily. In 2023, the company continued to break through in the new energy business, and 1GWh sodium-ion batteries and PACK batteries entered the trial operation stage. The world's first batch of commercial sodium-ion electric two-wheelers was released. All four photovoltaic module production lines have been completed. The N-type production line has a maximum daily output of 5.56 MW, and production line efficiency continues to rise. In 2024, the company plans to target leading PV modules in the industry, with P- and N-type yield to reach industry-leading levels, and achieve the annual 3GW sales target; sodium-ion batteries will continue to open up the full “sample-product-commodity” chain to achieve a sales target of 400MW or more for sodium electricity.
The dividend ratio has increased markedly. According to the company's “Notice on the 2023 Profit Distribution Plan”, it is proposed to distribute a cash dividend of 0.718 yuan (tax included) to all shareholders, with a total proposed discovery dividend of 2.59 billion yuan (tax included), accounting for 50.01% of the company's net profit for the year (30% dividend ratio in 2022). By the close of 4/18, the corresponding dividend rate was 7.0%.
Investment advice. Considering the downward trend in the coal price center and the impact of Shanxi's “top three” policy on the company's production, we lowered our profit forecast to expect the company's net profit to be 3.73 billion yuan, 4.29 billion yuan, and 4.51 billion yuan respectively from 2024 to 2026, corresponding to PE of 9.9, 8.6, and 8.2, maintaining the “buy” rating.
Risk warning: Production cuts have exceeded expectations, sodium-ion battery construction progress has fallen short of expectations, and coal prices have collapsed.