Yankuang Energy released its 2024 quarterly report on April 26, 2024:

2024Q1 achieved operating income of 39.633 billion yuan, a year-on-year decrease of 10.78% and a month-on-month increase of 164.45%; net profit to mother of 3.757 billion yuan, a year-on-year decrease of 33.54% and a year-on-month decrease of 18.58%; net profit after deducting non-return to mother was 3.667 billion yuan, a decrease of 34.74% year-on-year and a decrease of 15.54% month-on-month. Earnings per share were $0.51, down 55.26% year on year and 17.74% month on month.

Coal business: Q1 production and sales both increased year-on-year, and both price and capital fell, and the performance was weak and stable.

In terms of self-produced coal: 2024Q1 achieved self-produced coal production of 346.35 million tons (up 15.4% year on year, down 0.5% month over month); self-produced coal sales volume of 31.1131 million tons (up 12.7% year on year, down 4.7% month on month); unit price 675.7 yuan/ton (down 29.4% year on year, down 11.4% month on month); unit cost 326.6 yuan/ton (down 6.5% year on year, up 9.0% month on month); unit gross profit of 349.1 yuan/ton (down 42.6% year on year, down 24.6% month on month).

In terms of domestic coal production: 2024Q1, which achieved self-produced coal production of 24.516 million tons (up 7.2% year on year, up 3.9% month on month); sales volume of domestic coal production was 21.50 million tons (up 5.2% year on year, up 2.1% month on month); unit price 436.8 yuan/ton (down 21.8% year on year, down 3.0% month on month); unit cost 318.3 yuan/ton (down 8.7% year on year, up 8.4% month on month); unit gross profit of 118.5 yuan/ton (down 43.6% year on year, down 24.4% month on month).

In terms of self-produced coal: 2024Q1, achieving 10.121 million tons of self-produced coal production (up 41.9% year on year, down 9.7% month on month); self-produced coal sales volume of 9.632 million tons (up 34.0% year on year, down 17.1% month on month); unit price 818.1 yuan/ton (down 42.1% year on year, down 15.4% month on month); unit cost 562.7 yuan/ton (down 18.5% year on year, up 4.5% month on month); unit gross profit of 255.4 yuan/ton (down 64.7% year on year, down 40.4% month on month) .

In terms of trade coal: 2024Q1 achieved sales volume of 3,053 million tons of trade coal (year-on-year decrease of 28.9%, year-on-month increase of 163.

5%); unit price 1251.0 yuan/ton (down 15.3% year on year, down 4.4% month on month); unit cost 1231.4 yuan/ton (down 29.4% year on year, down 4.6% month on month); unit gross profit 19.6 yuan/ton (up 107.3% year on year and 10.8% month on month).

Coal chemical business: profits of methanol, acetic acid, and ethylene glycol improved month-on-month.

In terms of methanol, 2024Q1 achieved methanol production of 1.074 million tons (up 5.4% year on year, up 9.4% month on month); methanol sales volume of 986,000 tons (down 0.9% year on year, up 4.7% month on month); unit price of 1764.7 yuan/ton (down 7.3% year on year, up 29.8% month on month); unit cost of 1579.1 yuan/ton (down 17.4% year on year, down 33.4% month on month); unit gross profit of 185.6 yuan/ton (up 118.3% year on year, up 2151.9% month on month).

In terms of acetic acid, 2024Q1 achieved acetic acid production of 246,000 tons (down 14.6% year on year, down 13.7% month on month); acetic acid sales volume of 159,000 tons (down 91.4% year on year, down 18.9% month on month); unit price 3195.0 yuan/ton (up 1140.9% year on year, up 11.0% month on month); unit cost of 2597.5 yuan/ton (up 858.3% year on year, up 22.4% month on month); unit gross profit of 59 yuan/ton (down 20.7.5 percent year on year, up 4499.9% month on month) ).

In terms of ethyl acetate, 2024Q1 achieved ethyl acetate production of 96,000 tons (down 14.3% year on year, down 8.6% month on month); sales volume of ethyl acetate was 93,000 tons (down 18.4% year on year, down 12.3% month on month); unit price 5462.4 yuan/ton (down 1.9% year on year, down 6.6% month on month); unit cost of 5494.6 yuan/ton (down 0.1% year on year, up 4.6% month on month); unit gross profit of -32.3 yuan/ton (down 105.4% year on year, down 146.0% month on month).

In terms of ethylene glycol, 2024Q1 achieved ethylene glycol production of 85,000 tons (down 40.1% year on year, down 24.1% month on month); Ethylene glycol sales volume of 80,000 tons (down 50.3% year on year, down 32.2% month on month); unit price 3900.0 yuan/ton (up 85.8% year on year, up 15.3% month on month); unit cost of 3062.5 yuan/ton (up 93.4% year on year, increase of 9.2% month on month); unit gross profit of 837.5 yuan/ton (up 45.3% year on year, up 62.5% month on month).

In terms of caprolactam, 2024Q1 achieved 830,000 tons of caprolactam production (15.3% year-on-year increase, 20% month-on-month increase.

3%); sales volume of caprolactam was 82,000 tons (up 20.6% year on year, up 12.3% month on month); unit price was 11804.9 yuan/ton (up 11.2% year on year, up 5.5% month on month); unit cost was 11219.5 yuan/ton (up 17.7% year on year, up 12.8% month on month); unit gross profit of 585.4 yuan/ton (down 53.0% year on year, down 46.2% month on month).

In terms of polyformaldehyde, 2024Q1 achieved 14,000 tons of polyformaldehyde production (down 30.0% year on year, down 26.3% month on month); sales volume of 14,000 tons of polyformaldehyde (down 22.2% year on year, down 26.3% month on month); unit price of 10142.9 yuan/ton (down 10.9% year on year, down 2.7% month on month); unit cost of 8,500.0 yuan/ton (up 3.4% year on year, up 30.2% month on month); unit gross profit of 1642.9 yuan/ton (down 57.8% year on year, down 48.1% month on month).

In terms of naphtha, 2024Q1 achieved polynaphtha production of 69,000 tons (up 16.9% year on year, down 4.2% month on month); naphtha sales volume of 70,000 tons (up 18.6% year on year, down 1.4% month on month); unit price 6871.4 yuan/ton (up 2.6% year on year, up 3.6% month on month); unit cost of 3028.6 yuan/ton (up 13.8% year on year, up 26.5% month on month); unit gross profit of 3842.9 yuan/ton (down 9.4% year on year, down 4.7% month on month).

Profit forecast, valuation and investment rating: The estimated operating income of the company in 2024-2026 is 1801.74 and 1875, respectively.

Of 96.24 billion yuan and realized net profit of 217.40 billion yuan, 252.21 billion yuan, and 28.369 billion yuan, respectively, earnings per share were 2.92, 3.39, and 3.81 yuan, respectively. The current stock price was 23.23 yuan, and the corresponding PE was 7.9X/6.9X/6.1X, respectively, maintaining the “buy” rating.

Risk warning: The release of coal mine production capacity is limited, coal prices have dropped sharply, the release of production capacity of coal chemical products under construction has been blocked, and the price of coal chemical products has fluctuated greatly.