Event: On April 28, 2024, the company released its report for the first quarter of 2024. In the first quarter of 2024, the company achieved operating income of 6.158 billion yuan, a year-on-year decrease of 26.51%; realized net profit of 867 million yuan, a year-on-year decrease of 49.78%; and realized net profit deducted from non-mother of 780 million yuan, a year-on-year decrease of 54.64%.
Non-recurring gains and losses are mainly due to the impairment of accounts receivable to be reversed. The company's 24Q1 non-recurring profit and loss was $87 million, of which $111 million was transferred back in preparation for impairment of accounts receivable.
Production and sales declined year-on-year in 24Q1, and prices declined somewhat. 1) Production and sales volume: In 24Q1, the company's coal production was 8.5 million tons, down 26.52% year on year, down 22.91% month on month; coal sales were 8.28 million tons, down 22.63% year on year, down 11.87% month on month. 2) Price and cost: In 24Q1, the sales price of the company's tons of coal was 589 yuan/ton, down 13.45% year on year, down only 2.22% month on month; the cost of a ton of coal was 361 yuan/ton, up 5.51% year on year and 35.72% month on month. 3) Profitability: In 24Q1, the company's gross profit per ton of coal was 227 yuan/ton, down 32.69% year on year; gross margin was 38.59%, down 11.03 pct year on year.
Existing mines are being approved for production capacity, and the commissioning of coal mines under construction is expected to contribute to an increase. The company is speeding up the pace of construction of existing mines and mines under construction. On the one hand, the Pingshu mine obtained a 5 million tons/year mining license and a production safety license, and the 5 million tons/year production capacity increase of the Yushupo mine was approved, and the EIA procedure for the energy improvement project is expected to be completed by the end of October; on the other hand, the Qiyuan mine will enter the joint trial operation stage in 2024, with a production capacity of 5 million tons/year, and a service life of 137 years, mainly anthracite. The main mining layers are No. 8 and No. 15 coal; the Boli mine will have conditions for joint trial operation by the end of 2025, with the same production capacity as 5 million tons/year. In 77.6, It is mainly poor coal and anthracite, and the main mining layer is No. 15 coal. As the production capacity of the company's production mines is gradually improved and the mines under construction are put into operation one after another, the company's production is expected to gradually increase in the next three quarters of 24 years.
The balance sheet continues to be repaired, and financing costs may drop. As of the end of the first quarter of 2024, the company's balance ratio was 51.95%, down 3.11pct from the end of 2023. According to the 2023 annual report, the interest rate on the company's science and technology innovation renewable bonds issued in 2024 is only 2.88%, which is 1.62 pct lower than the interest rate on corporate bonds issued in 2019, and the company's bonds will expire in 2024, so the company's financial expenses are expected to decline in the future.
Investment advice: The company's mines under construction are progressing steadily, the dividend ratio has increased dramatically, and the value of growth and dividend allocation is prominent. We expect that the company's net profit for 2024-2026 will be 44.64/49.40/5.669 billion yuan, respectively, and the corresponding EPS will be 1.24/1.37/1.57 yuan/share, respectively. The PE corresponding to the closing price on April 26 will be 8/7/6 times, respectively, maintaining the “recommended” rating.
Risk warning: The risk of macroeconomic fluctuations, the risk of policy changes, the commissioning progress of coal mines under construction falls short of expectations, and the progress of the new energy business falls short of expectations.