The company announced its 2024 Q1 results announcement. In the first quarter of 2024, the company achieved net profit of 598 million yuan, an increase of 0.62% over the previous year; operating income of 3,058 billion yuan, an increase of 5.59% over the previous year.

Coal: Toughness is prominent. In Q1 2024, the company's coal sector (including internal) achieved revenue of 2.6 billion yuan, +1.49% year over year; gross profit (including internal) of 1 billion yuan, +1.87% year over year. The average price of coal in the Bohai Rim during the same period in 2024Q1 was 909 yuan/ton, -21.5% year-on-year. For details:

2024Q1 coal production was 5.01 million tons, -9.41% YoY, +4.5% month-on-month; commercial coal sales volume was 4.52 million tons, -5.4% YoY, +1.6% month-on-month; of these, external sales volume was 3.5 million tons, -8.5% YoY, +13.9% month-on-month; foreign sales accounted for 77.4%, +12.2pct month-on-month.

The comprehensive sales price of 2024Q1 tons of coal was 575 yuan/ton, +7% YoY, +0.3%; the comprehensive cost of a ton of coal was 347 yuan/ton, +7% YoY and -15.4% month-on-month; the comprehensive gross profit per ton of coal was 228 yuan/ton, +8% YoY and +39.2% month-on-month.

Electricity: Volume and price have risen sharply, and the planned installation layout has already started.

2024Q1 power generation capacity was 2.46 billion kilowatt-hours, +27% year over month, -19.8% month on month; feed-in power was 2.33 billion kilowatt-hours, +28% year over month, -19.8% month on month; average feed-in tariff was 0.4081 yuan/kWh, +1% year over month, -0.4% month on month.

The company's coal power business has broad room for growth. Projects such as Shangrao Power Plant, Chuzhou Power Plant, and Lu'an Power Plant are still being prepared for construction, with a total installed capacity of 7,250MW. 2024Q1, the company's holding subsidiary, officially began construction of the new 2×1000MW supercritical secondary reheated coal-fired generator set in Shangrao on March 26, 2024; China Coal Xinji (Chuzhou) Power Generation Co., Ltd. construction of the new 2×660MW supercritical secondary reheated coal-fired generator set officially began on March 28, 2024.

Investment advice. We expect the company to achieve net profit of 2.4 billion yuan, 2.6 billion yuan, and 3.1 billion yuan respectively in 2024-2026, corresponding to PE of 9.5, 8.7, and 7.5 billion yuan. Maintain a “buy” rating.

Risk warning: Coal prices have collapsed, feed-in tariffs have been lowered, and the commissioning of installed equipment falls short of expectations.