Core views:
Q1 Performance declined 4.5% month-on-month, and cost control was better. The company released its quarterly report. Q1 revenue was 6.16 billion yuan, -26.5% YoY/-10.3%; net profit to mother was 870 million yuan, -49.8% YoY/-4.5% month-on-month; net profit after deducting non-return to mother was 780 million yuan, or -54.6% YoY /7.8% YoY.
Affected by the control of the three major coal mines in Shanxi, Q1 Company's coal production was limited, and coal prices also declined, but cost control was being strengthened. Among them, taxes and period expenses were -20% YoY /-44% month-on-month.
Q1 The volume and price of coal fell, and the net profit per ton of coal reached 94 yuan. According to the company's financial report, the company's coal production and sales volume in '23 were 4,591 million tons and 41 million tons, respectively. Q1 coal production was 8.5 million tons, -26.5% YoY/-22.9%; sales volume: 8.28 million tons, YoY -22.6% /YoY -11.9%; tonne coal revenue was 589 yuan, -13.4% YoY/-2.2% YoY; tonne coal cost 361 yuan, +5.5% YoY/35.8% YoY; Net profit per ton of coal was 94 yuan, 41.4% YoY +4.7% YoY.
The coal mine under construction has a production capacity of 10 million tons. The nuclear increase in production capacity in Yushupo continues to advance, and new industries and new momentum are being cultivated. According to the company's annual report, the company's mines currently under construction include the Boli and Qiyuan coal mines, with production capacity of 5 million tons/year. Seven yuan will enter the joint trial operation stage in 2024, and Boli will have the conditions for joint test operation before the end of 2025. In addition, the company is coordinating the processing of the 5 million tons/year production capacity increase procedure in Yushupo and completing the EIA procedure for the energy improvement project by the end of October. In terms of the new energy business, the company's sodium-ion batteries continue to open up the full “sample-product-commodity” chain and plan to achieve the sales target of 400MW of sodium electricity or more.
Profit forecasting and investment advice. Q1 The production of coal companies in Shanxi is generally limited. In the next three years, with the completion and commissioning of the 7 yuan Heboli mine, the company's approved production capacity and output will clearly increase. At the same time, since 21 years, the company has been deployed in the field of new energy and new materials, and various projects have been put into production one after another. It is also expected to expand development space and increase the company's valuation in the medium to long term. In addition, the company's dividend ratio increased to 50% in fiscal year 23, and shareholder returns increased. The company's 24-26 EPS is expected to be 1.22, 1.38, and 1.55 yuan/share, respectively. Referring to comparable company valuations and the company's historical valuation center, the 24-year PE is 9 times, corresponding to a reasonable value of 10.96 yuan/share, maintaining a “buy” rating.
Risk warning. Downstream demand performance is low, coal prices have fallen beyond expectations, progress of new construction projects is low, etc.