Net profit attributable to mother achieved positive year-on-month growth

The company's 2024Q3 revenue was 3.204 billion yuan, -6.63% year-on-year, net profit to mother 0.649 billion yuan, +5.86% year-on-year, +12.16% month-on-month, net profit after deducting non-return to mother was 0.649 billion yuan, +6.43% year-on-year.

In the same period, taxes and surcharges were +34.51% month-on-month, sales expenses +18.08% month-on-month, administrative expenses -9.43% month-on-month, and financial expenses -0.92% month-on-month.

Coal production, sales and costs were stable in a single quarter

Coal's main sales revenue was 7.748 billion yuan, -6.66% year over year, including foreign sales revenue of 5.592 billion yuan, -13.79% year on year, sales cost 4.699 billion yuan, -7.61% year on year, gross sales profit of 3.049 billion yuan, or -5.16% year over year.

The company produced 15.5771 million tons of raw coal in the first three quarters of 2024, -6.17% year on year, 13.8838 million tons of commercial coal, -6.74% year on year, and 13.786 million tons of commercial coal, -9.5% year on year, of which foreign sales volume was 9.9685 million tons, or -16.49% year over year.

According to single-quarter data, the cost of a ton of coal in Q3 was 344.5 yuan/ton, +0.8% YoY, +3.9% month-on-month, and gross profit per ton of coal 213.2 yuan/ton, -0.2% YoY and -4.0% month-on-month.

The electricity sector improved sharply in Q3, boosting net profit growth month-on-month

In the first three quarters of 2024, the power generation capacity was 8.604 billion kilowatt-hours, +16.14% year over year, the feed-in electricity volume was 8.116 billion kilowatt-hours, +16.18% year-on-year, and the average feed-in price was 0.4058 yuan/kWh, -0.93% year-on-year.

2024Q3 generated 3.994 billion kilowatt-hours in a single quarter, +20.77% YoY and +85.94% YoY. Feed-in power was 3.763 billion kilowatt-hours, +20.53% YoY, +86.19%.

Profit forecast and valuation: We expect net profit due to mother for 2024-2026 to be 2.22/2.64/3.42 billion yuan, respectively, and corresponding EPS of 0.86/1.02/1.32 yuan, respectively, maintaining a “buy” rating.

Risk warning: the risk of large fluctuations in coal prices; the risk that the return on investment in future power plants will fall short of expectations due to the slowdown in economic development in Anhui or other factors; the risk that thermal power will be squeezed out due to the rapid development of new energy sources in Anhui Province; the risk of projects under construction falling short of expectations.