Incident Overview: The company recently released its quarterly report for '24 and its annual report for '23. In 24Q1, the company's revenue was 87.65 billion yuan, up 0.7% year on year; net profit to mother was 15.88 billion yuan, down 14.7% year on year.
The company's revenue in '23 was 343.07 billion yuan, down 0.4% year on year; net profit to mother was 59.69 billion yuan, down 14.3% year on year; after deducting non-net profit of 62.87 billion yuan, down 10.6% year on year.
The volume of coal increased and decreased in 23 years, and the long-term agreement price fluctuated less. In '23, coal production was 320 million tons, up 3.5% year on year; sales volume was 450 million tons, up 7.7% year on year; comprehensive sales price was 584 yuan/ton, down 9.3% year on year. Among them, the annual Changxie Association accounted for 57.5%, up 4.5 pct year on year, and the price was 500 yuan/ton, down 2.9% year on year.
Coal production and sales rose sharply in 24Q1, and coal prices continued to be under pressure. In 24Q1, the company produced 81.3 million tons of commercial coal, up 1.5% year on year; sales volume was 117 million tons, up 8.8% year on year; comprehensive sales price was 573 yuan/ton, down 7.7% year on year. The coal industry association accounted for 50%, down 7.5 pct year on year; the production cost of self-produced coal was 190.6 yuan/ton, up 12.5% year on year; total profit was 13.406 billion yuan, down 23.0% year on year.
The scale of coal production capacity is expected to expand. In February '24, the company obtained mining licenses for wells 1 and 2, Xinjie in the Taigemiao mining area of Inner Mongolia. On June 26, 23, the company announced that it intends to acquire some of the assets of the controlling shareholder, involving the production capacity of the Dayan Mining coal mine under the group of 10.7 million tons/year and Hangjin Energy's production capacity under construction of 10 million tons/year.
The profitability of the power generation business increased, and the profit of the railway business declined. The total electricity sales volume of the company in '23 was 199.75 billion kilowatt-hours, up 11.1% year on year; the total profit of the electricity sector was 10.642 billion yuan, up 34.1% year on year.
The overall profit level of the transportation business declined in '23. Among them, the railway segment's revenue increased by 1.8%, but costs increased by 9.5%, and total profit decreased by 11.9% year-on-year.
High dividends show value. The company had a cash dividend of 2.26 yuan per share in '23, with a dividend rate of 75.2%, up 2.4 pct from '22. Corresponding to the closing price on April 29, the dividend rate was 5.8%.
Investment advice: We expect the company's revenue to be 3468.66/3554.75/364.511 billion yuan in 24-26, 1.11%/2.48%/2.54% year on year; net profit to mother is 627.57/662.34/67.202 billion yuan, 5.13%/5.54%/1.46% year on year; EPS is 3.16/3.33/3.38 yuan respectively, corresponding to the current stock price PE is 12.35/11.70/11.53 times, taking into account the integration of the company's entire coal industry chain Operating profits are steady, high dividends highlight value, and maintain an “increase in wealth” rating.
Risk warning: the decline in coal prices exceeded expectations; additional production capacity fell short of expectations; production safety risks.