Event: The company released its results report for the first quarter of 2024. In the first quarter of 2024, the company 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%.
Coal: Production increased significantly. In 2024, the Q1 coal sector achieved a total revenue of 24.85 billion yuan, -24.2% year-on-year; achieved gross profit of 9.62 billion yuan, and gross margin of 38.7%.
In terms of production and marketing, 24Q1 achieved coal production and sales of 34.63 million tons/34.18 million tons, +15.4%/+7.1%, and -0.5%/-19.6% month-on-month. Among them, Yancoal Australia and Yancoal International achieved total coal production and sales of 10.121 million tons/9.632 million tons, achieving a total of +49.6%/+34.0% year-on-month, in total.
In terms of sales price cost, after deducting trade, the company sold for a ton of coal at 676 yuan/ton, down 0.1% year on year, +5.0% month on month. The cost of a ton of coal was 368 yuan/ton, +55.1% year over year.
Chemical industry: The overall operation is stable. In 2024, the chemical sector of Q1 achieved a total revenue of 6.26 billion yuan, -4.0% year-on-year, gross margin of 16.8%, and +2.1 pcts year-on-year.
In terms of production and sales, Q1 chemicals achieved a total production and sales of 2.164 million tons/1.881 million tons in 2024, +1.8%/-3.6% year-on-year;
In terms of price costs, in 2024, the company sold for 3,327 yuan/ton of chemical products in Q1, -0.4% year-on-year, and gross profit of 558 yuan/ton, +14.2% year-on-year.
Production capacity has grown, and the dividend rate is 6.4%. The company's two coal mines currently under construction will be put into operation. The Wanfu Coal Mine (design capacity 1.8 million tons/year) is scheduled to be put into operation in 2024; the Wucaiwan No. 4 coal mine is scheduled to be put into operation in 2025. According to the company's “2023 Profit Distribution Plan Notice”, it is planned to distribute a cash dividend of 11.08 billion yuan. It accounts for 55.04% of net profit due to mother (60.00% of net profit after deducting statutory reserves), and the dividend rate as of April 26 was 6.4%.
Investment advice. We expect the company to achieve net profit of 20.3 billion yuan, 20.9 billion yuan, and 21.8 billion yuan from 2024 to 2026, corresponding to PE of 8.5X, 8.3X, and 7.9X, maintaining a “buy” rating.
Risk warning: Coal prices have dropped sharply, the decline in coal chemical industry slowing down performance, and projects under construction have fallen short of expectations.