Under the influence of the high base and declining coal prices during the same period, the 2023 performance declined; the decline in 2024Q1 performance was mainly due to a decline in coal prices. In 2023, the company achieved total operating income of 170.87 billion yuan (+2.4%), net profit of 21.24 billion yuan (-39.7%), and net profit of 24.68 billion yuan (-16.9%) after deducting non-net profit of 24.68 billion yuan (-16.9%); of these, 2023Q4 achieved total operating income of 43.44 billion yuan (+19.8%) and net profit to mother of 5.06 billion yuan (-15.9%).
The decline in performance in 2023 is mainly due, first, to the investment income obtained from the sale of some shares of Longji Green Energy in the same period last year, as well as changes in accounting methods for investing in Longji Green Energy, which contributed greatly to the results for the same period last year; the second is the decline in coal prices. 2024Q1 achieved total operating income of 40.45 billion yuan (-9.7%), net profit attributable to mother of 4.65 billion yuan (-32.7%), and deducted non-net profit of 5.35 billion yuan (-26.3%).
Coal production and sales increased in 2023, and the decline in coal prices affected gross profit; 2024Q1's self-produced coal sales continued to increase steadily. In 2023, the company's coal production was 164 million tons, +4.1% year over year; coal sales volume was 253 million tons, +12.6%; self-produced coal sales price was 574.5 yuan/ton, down 94.5 yuan/ton; the full cost of the original coal preparation unit was 296.6 yuan/ton, down 22.8 yuan/ton year on year. The main material costs were reduced by 8.8 yuan/ton, and maintenance and repair costs were reduced by 4.1 yuan/ton. Overall, the gross profit margin of self-produced coal was 59.5%, -6.5 pct year over year. 2024Q1 coal production was 41.45 million tons, +1.5% year over year; self-produced coal sales volume was 40.91 million tons, +1.2% year over year.
The dividend rate remains high, and the dividend rate exceeds 5%. In 2023, the company paid a cash dividend of 12.75 billion yuan, or -39.7% year on year; the dividend rate was 60.03%, -0.14pct year on year. Based on the April 29 stock price, the company's dividend ratio is 5.43%.
The “2024 “Improve Quality, Increase Efficiency, and Focus on Return” action plan was issued, focusing on high-quality development. In terms of improving the quality of operations, the company proposed that in 2024, it will continue to advance the preliminary work of the Little Hou Tu 1 and Little Hou Tu Western Exploration Area projects; speed up the implementation of the “Four in One” high-cost hierarchical management system to achieve safe and efficient scientific cost reduction, etc.
Investment advice: Maintain the 2024-2025 profit forecast and maintain the “Overweight” rating.
The company's revenue for 2024-2026 is estimated to be RMB 1571/1587/1603 billion, net profit to mother of RMB 233/236/24 billion, and earnings per share of RMB 2.40/2.44/2.48 yuan respectively. Considering that the company's coal mining conditions are good, the coal quality is excellent, the scale of coal production capacity is advantageous, and there is still room for growth. At the same time, the company's performance is steady, dividend returns are abundant, and the rating of “gain” is maintained.
Risk warning: The economic slowdown has led to a decline in demand for coal, rapid development of new energy sources to replace demand for coal power, the impact of production safety accidents, and the release of the company's nuclear production capacity has fallen short of expectations.