Incident Overview: The company recently released its 2024 quarterly report and 2023 annual report. In 2024Q1, the company achieved operating income of 17.322 billion yuan, a year-on-year decrease of 8.80%; net profit to mother was 1,590 billion yuan, a year-on-year decrease of 24.70%. In 2023, we achieved revenue of 73.387 billion yuan, up 6.26% year on year; net profit to mother of 6.225 billion yuan, down 11.21% year on year; deducted non-net profit of 5.891 billion yuan, down 15.5% year on year.
Pay attention to cost control, and the decline in profits is less than that of companies in the same industry. 2024Q1 commercial coal production was 5.2364 million tons, down 7.73% year on year, and commercial coal sales were 4.0261 million tons, down 21.08% year on year.
The company's commercial coal sales revenue fell 33.07% year on year, but commercial coal sales costs fell 34.51% year on year, management expenses fell 407 million yuan, 2024Q1 net profit fell 24.7% year on year, net profit to mother in 2023 fell 11.21% year on year, and the company's profit decline was less than that of companies in the same industry.
Coal production is expected to decline slightly in 2024, and long-term production growth can be expected. In 2023, the company produced 21.97 million tons of commercial coal, a year-on-year decrease of 4.1%. Commercial coal sales volume was 17.83 million tons, a year-on-year decrease of 5.3%.
The 2024 commercial coal production management plan is 21.39 million tons, a year-on-year decrease of 2.6%. The Taohutu Coal Mine and the Xinhu Coal Mine are expected to increase production in the long term.
Actively expanding the non-coal business is expected to contribute to increased performance. The 600,000 tons/year ethanol project is already in trial production and is expected to be officially put into operation in June 2024. The 100,000 tons/year DMC project is expected to be completed and put into operation in October 2024. The company plans to invest in the construction of a 2×660MW ultra-supercritical coal-fired generator project, with an estimated total investment of 5.261 billion yuan and a capital of 1,010 billion yuan. After completion, the project is expected to have an average annual profit of 196 million yuan and a return on internal investment of 18.52%. The net profit of the company's operating plan for 2024 was 5.725 billion yuan.
The dividend rate is 42.6%, and the current dividend rate is 5.3%. The company plans to distribute 2,652 billion yuan in cash, with a dividend rate of 42.60%. The dividend ratios for 2021/2022 are 36.3% and 37.2%, respectively. The dividend rate has continued to increase in recent years. The dividend rate at the April 29th closing price is 5.3%.
Investment advice: The company's revenue is expected to be 732.3/758.6/87.77 billion yuan in 24-26, -0.5%/+3.6%/+15.7% year on year; net profit to mother is 65.9/69.1/7.69 billion yuan, +5.9%/+11.2% year on year; EPS is 2.45/2.57/2.85 yuan respectively, corresponding to the current stock price PE of 7.62/7.26/6.53 times. The company is a high-quality coking coal company with steady operation, which is expected to contribute to the performance of coal and non-coal projects under construction Incremental, lower valuation showed investment value, and maintained a “buy” rating.
Risk warning: the decline in coal prices exceeded expectations; additional production capacity fell short of expectations; production safety risks.