Core views

In the first half of 2024, the company achieved operating income of 14.512 billion yuan, a year-on-year increase of 3.80%; net profit to mother was 1.189 billion yuan, an increase of 17.45% year-on-year. The year-on-year increase in the company's operating performance is mainly due to the effects of low thermal coal prices combined with the year-on-year increase in grid electricity capacity. Thanks to the company's complementary coal and electricity business model, profit growth in the electricity business can hedge against price fluctuations in the coal business and ensure the steady growth of overall business performance. Currently, the company is actively promoting the construction of the Haizetan coal mine. According to the company's plan, the Haizetan coal mine is expected to be put into operation on the first mining surface in June 2026, and is expected to produce 3 million tons of coal in that year; joint trial operation will be carried out in the first quarter of 2027, and it is expected to produce 10 million tons of coal. The commissioning of the Haizetan Coal Mine is expected to further increase the company's operating performance. According to the company's calculation results, the Haizetan Coal Mine is expected to increase annual revenue by about 9 billion yuan, increase net profit by about 4.4 billion yuan, increase net operating cash flow by about 5.1 billion yuan, and return on investment of more than 50%.

occurrences

Yongtai Energy Releases 2024 Semi-Annual Report

In the first half of 2024, the company achieved operating income of 14.512 billion yuan, up 3.80% year on year; net profit of 1.189 billion yuan, up 17.45% year on year; net profit after deducting 11.1.2 billion yuan, up 10.66% year on year; net profit due to mother of 0.723 billion yuan in a single quarter, up 21.71% year on year; achieved a weighted return on net assets of 2.54%, an increase of 0.27 percentage points year on year; achieved basic income per share of 0.05 yuan /share, up 17.32% year over year.

Brief review

Electricity profits continued to improve, and net profit to mother increased year-on-year

In the first half of 2024, the company achieved operating income of 14.512 billion yuan, a year-on-year increase of 3.80%; net profit to mother was 1.189 billion yuan, an increase of 17.45% year-on-year. The year-on-year increase in the company's operating performance is mainly due to the effects of low thermal coal prices combined with the year-on-year increase in grid electricity capacity. Thanks to the company's complementary coal and electricity business model, profit growth in the electricity business can hedge against price fluctuations in the coal business and ensure the steady growth of overall business performance. By business, the company's electricity and coal businesses achieved operating income of 88.04 and 53.4.4 billion yuan, respectively, with changes of +14.32% and -8.41%; achieving gross profit margins of 15.46% and 48.38%, with year-on-year changes of +8.86 and -7.71 percentage points. The company's gross margin of electricity increased year-on-year, mainly due to the year-on-year decline in coal combustion costs. 2024H1 purchased 8.7472 million tons of coal, of which Changxie Coal accounts for 86.84%. The company's net profit for the quarter was 0.723 billion yuan, up 21.71% year on year. In terms of the cost ratio for the period, the sales expense ratio, management expense ratio, R&D expense ratio, and financial expense ratio of the 2024H1 company were 0.37%, 3.70%, 0.25%, and 6.84%, respectively, with year-on-year changes of +0.11, -0.60, -0.19, and -1.94 percentage points. In the first half of 2024, the company's financial expenses were 0.992 billion yuan, down 19.19% year on year, mainly due to the company's exchange losses reduced by 0.209 billion yuan year on year.

The construction of the Haizetan coal mine has been fully accelerated, and the company's operating performance is expected to increase by the end of June 2024. The company holds a total installed capacity of 9.18 million kilowatts and a total shareholding capacity of 4 million kilowatts. Its power plants are distributed in Jiangsu and Henan. In the first half of 2024, the company achieved 19.365 billion kilowatt-hours of power generation, an increase of 13.44% over the previous year, and achieved a feed-in electricity capacity of 18.356 billion kilowatt-hours, an increase of 13.55. In terms of coal, the company's current total coal mine production capacity is 21.1 million tons/year, and the amount of coal resources in hand is 3.829 billion tons, of which:

The amount of high-quality coking coal resources is 0.922 billion tons, and the amount of high-quality thermal coal is 2.907 billion tons. In the first half of 2024, the company's sales volume of raw coal and refined coal was 592.23 and 1,438,900 tons, respectively, a year-on-year decrease of 2.68% and 8.68%. Currently, the company is actively promoting the construction of the Haizetan coal mine. According to the company's plan, the Haizetan coal mine is expected to be put into operation on the first mining surface in June 2026, and is expected to produce 3 million tons of coal in that year; joint trial operation will be carried out in the first quarter of 2027, and it is expected to produce 10 million tons of coal. The commissioning of the Haizetan Coal Mine is expected to further increase the company's operating performance. According to the company's calculation results, the Haizetan Coal Mine is expected to increase annual revenue by about 9 billion yuan, increase net profit by about 4.4 billion yuan, increase net operating cash flow by about 5.1 billion yuan, and return on investment of more than 50%.

Full vanadium liquid flow energy storage continues to be deployed, and coal mine expansion is expected to contribute marginal profits. The “buy” rating company continues to promote the full vanadium liquid flow energy storage industry chain layout. Currently, the company's 1MW test production line has been put into use. The 1.2 generation 32 kW electric reactor products developed obtained a national inspection and certification report in April 2024. The energy efficiency of electric reactors is 82.09%, reaching advanced domestic levels. Meanwhile, the company's Nanshan Coal Industry Optical Storage Integration Demonstration Project officially started construction in April and is expected to be completed and put into operation by the end of September. In terms of coal resources, the company's Sunyi Coal Mine, Jintaiyuan Coal Mine and Mengziyu Coal Mine expansion projects have already begun concession procedures. The total proposed expansion of the border resource area is 5.29 square kilometers, and the estimated resource volume is about 19.75 million tons. Currently, the company's coal and power businesses have achieved complementary management, and the construction of the Haizetan coal mine is progressing at full speed, and the company's operating performance is expected to continue to grow. We expect the company's net profit to be 2.561 billion yuan, 2.643 billion yuan, and 3.055 billion yuan respectively from 2024 to 2026, corresponding to EPS of 0.12 yuan/share, 0.12 yuan/share, and 0.14 yuan/share, maintaining a “buy” rating.