Incident: On April 26, 2024, the company disclosed its quarterly report. The first quarter of 2024 achieved operating income of 39.633 billion yuan, a year-on-year decrease of 20.76%; net profit to mother was 3.757 billion yuan, a year-on-year decrease of 41.85%.
The volume of the coal business increased and the price decreased, and gross profit declined. The 24Q1 company produced 34.63 million tons of commercial coal, up 15.4% year on year, and sold 34.18 million tons of coal, up 7.1% year on year. Among them, sales of self-produced coal were 31.1131 million tons, up 12.7% year on year, and sales of trade coal were 3.053 million tons, down 28.88% year on year. The company's comprehensive coal sales price was 727.07 yuan/ton, down 29.24% year on year. Among them, the price of self-produced coal was 675.69 yuan/ton, down 29.45% year on year, and the price of trade coal was 1250.96 yuan/ton, down 15.27% year on year. The company's cost per ton of coal was 445.44 yuan/ton, down 18.77% year on year. Among them, the sales cost of self-produced coal was 368.38 yuan/ton, up 1.61% year on year, and the sales cost of trade coal was 1231.35 yuan/ton, down 29.39% year on year. The coal business achieved gross profit of 9.627 billion yuan, a year-on-year decrease of 5.665 billion yuan, a decrease of 37.05%, and a gross profit margin of 38.73%, a year-on-year decrease of 7.8 percentage points.
Increased profitability in the chemical business. 24Q1 completed chemical production of 2.164 million tons, a year-on-year increase of 1.76%, and completed sales of 1.881 million tons of chemicals, a year-on-year decrease of 3.56%. The comprehensive selling price of chemicals was 3326.95 yuan/ton, down 0.42% year on year, and the comprehensive cost was 2769.27 yuan/ton, down 2.91% year on year.
The chemical business achieved gross profit of 1,049 million yuan, a year-on-year increase of 9.6 million yuan, an increase of 10.07%, and a gross profit margin of 16.76%, an increase of 2.14 percentage points over the previous year.
Profits in the electricity business increased slightly. 24Q1 achieved a power generation capacity of 1,966 million kilowatt-hours, a year-on-year decrease of 8.94%, and achieved sales of 1,637 billion kilowatt-hours of electricity, a year-on-year decrease of 10.31%. The estimated price of electricity was 0.39 yuan, an increase of 3.6% over the previous year, and the cost of electricity was 0.33 yuan, which was the same as the previous year. The power business achieved gross profit of 100 million yuan, an increase of 9 million yuan over the previous year, an increase of 9.89%. The gross margin was 15.55%, an increase of 2.4 percentage points over the previous year.
In 2024, the company strives for “two increases, three decreases, four improvements”. In 2024, the company will further develop the “two increase, three decrease, four upgrade” campaign. Focus on optimizing the production organization, work surface design, and coal mining processes of mines such as Shilausu and Yingpandou to achieve production results as soon as possible by highlighting the “two increases” in product output and achieving production efficiency. Accelerate the construction of key incremental projects and divest coal from the Wucaiwan No. 4 open pit mine before the end of 2024. Resolutely achieve “three reductions” in debt ratios, costs, and capital expenditure. Steadily promote “four improvements” in profitability, total labor productivity, investment in science and technology research and development, and operating cash ratio.
Investment advice: Considering that the company's capital expenditure is relatively stable, there is still room for improvement in future production, and the company's guaranteed cash dividend ratio is 60% of distributable profits, and the dividend ratio has investment value. We expect the company's net profit to be 190.01/207.51/220.43 billion yuan in 2024-2026, the corresponding EPS is 2.55/2.79/2.96 yuan/share, respectively, and the PE corresponding to the stock price on April 26, 2024 is 9/8/8 times. Maintain a “Recommended” rating.
Risk warning: macroeconomic growth is slowing down; coal prices have dropped sharply; chemical prices have declined sharply, and there is a risk of exchange rate fluctuations.