Event: The company released its 2023 annual report and 2024 quarterly report. In 2023, the company achieved operating income of 61,475 billion yuan, +3.48% year-on-year; realized net profit to mother of 5.173 billion yuan, or -54.37% year-on-year.
With 2024Q1, the company achieved operating income of 10.041 billion yuan, or -49.44% year-on-year, and realized net profit of 807 million yuan, or -73.15% year-on-year.
Natural gas: Coordinated arrangement of various resources, sales increased year-on-year in '23. In 2023, the company achieved a total sales volume of 8.684 billion square meters (6.152,600 tons) of natural gas, an increase of 30.99% over the previous year. In terms of self-generated gas, due to steam boiler rotation inspections, the company's LNG production was 580 million square meters (414,600 tons in total), a year-on-year decrease of 19.87%. In terms of external gas procurement, the company coordinates international resources such as long-term agreements, short agreements, and spot stocks to expand the business scale, optimize procurement and marketing strategies, and maximize the company's profits.
Coal: Coordinated arrangement of various resources, sales increased year-on-year in '23. In 2023, the company actively exploited new customer needs, accelerated the coal radiation area and market share, and achieved raw coal production of 22.312,900 tons, an increase of 9.13% over the previous year; total coal sales volume was 30.9946 million tons, an increase of 16.07% over the previous year.
Make every effort to promote the construction of key projects and achieve the goals set. In 2023, the company made progress in processing procedures for the Malang coal mine, and the project was approved for capacity replacement by the National Energy Administration; the first shallow Permian reservoir well was drilled and the injection conditions were in place. Construction of the deep Permian reservoir horizontal well network began one after another, and the second batch of crude oil non-state trade import allowances for 2024 was approved.
The hydrogen energy project was put into trial operation to strengthen the company's core competitiveness. In April 2024, the company's hydrogen energy demonstration project fully entered the trial production and operation stage, and the entire line of hydrogen generation+industrial by-product hydrogen generation+hydrogen storage+hydrogen transport+hydrogen use from electrolyzed water was completed. In terms of hydrogenation equipment, on March 16, 2024, the hydrogen analysis purity at the hydrogen fueling station of the hydrogen energy demonstration project reached 99.998%, reaching the standard for hydrogen fuel. With the completion of the first hydrogen energy heavy truck filling with hydrogen, the hydrogenation part of the project went into test run. As of April 2024, 10 hydrogen heavy truck tractors had fueled a total of 11405.01 kg, transported 729 vehicles during the scene, and transported a total of 53378.78 tons of coal. In terms of hydrogen production plants, on April 20, 2024, the hydrogen electrolysis hydrogen production plant of the hydrogen energy demonstration project was successfully put into operation once, producing qualified hydrogen, with a hydrogen purity of 99.992%.
Profit forecasting and investment ratings. We expect the company's net profit to be 5.415 billion yuan, 7.439 billion yuan, and 8.139 billion yuan, respectively, and EPS of 0.82 yuan, 1.13 yuan, and 1.24 yuan, respectively. According to 2024 EPS and 10-11 times PE, corresponding to a reasonable value range of 8.20-9.02 yuan (corresponding to 1.72-1.89 times PB in 2024), maintaining the “superior to market” rating.
Risk warning. Construction of the project fell short of expectations; product prices fluctuated greatly.