HUAIBEI MINING HOLDINGS(600985):QUALITY PRIME COKING COAL PROVIDER GROWING STEADILY; PRIME COKING COAL VALUE LIKELY TO RISE
HUAIBEI MINING HOLDINGS(600985):QUALITY PRIME COKING COAL PROVIDER GROWING STEADILY; PRIME COKING COAL VALUE LIKELY TO RISE
Prime coking coal: A tight balance between supply and demand; supply side may lack growth momentum in the medium and long term. We anticipate stable hot metal output in China in the near term, as factories in Shanxi have accelerated production resumption since May and their production capacity increased QoQ in 2-3Q24. However, we think the supply and demand dynamics of coking coal throughout 2024 will remain tight. Given the potential recovery in steel demand from the construction sector in 2H24, we expect prime coking coal prices to be relatively high.Investment positives
投資優勢
We initiate coverage on Huaibei Mining Holdings Co., Ltd. (Huaibei Mining) with an OUTPERFORM rating and a target price of Rmb23.00, implying 10x 2024e and 9x 2025e P/E.
我們開始覆蓋淮北礦業控股有限公司（以下簡稱“淮北礦業”），給予 OUTPERFORm 評級和目標價 23 元人民幣，預計對應 2024e 和 2025e 市盈率分別爲 10x 和 9x。
Why an OUTPERFORM rating?
爲什麼是 OUTPERFORm 評級？
Prime coking coal: A tight balance between supply and demand; supply side may lack growth momentum in the medium and long term. We anticipate stable hot metal output in China in the near term, as factories in Shanxi have accelerated production resumption since May and their production capacity increased QoQ in 2-3Q24. However, we think the supply and demand dynamics of coking coal throughout 2024 will remain tight. Given the potential recovery in steel demand from the construction sector in 2H24, we expect prime coking coal prices to be relatively high.
主板煉焦煤：供需緊平衡；中長期供給側可能缺乏成長勢頭。我們預計中國熱金屬產量短期內保持穩定，自五月份起山西的工廠已加速復產，生產能力在 2-3Q24 環比增長。然而，我們認爲 2024 年整個煉焦煤的供需動態將保持緊平衡狀態。鑑於在 2H24 建築業需求的潛在復甦，我們預計主板煉焦煤價格將相對較高。
The growth in coking coal supply in China may lack momentum in the medium and long term, as existing domestic coal mines may only support less than 30 years of mining and most new capacity and mines approved for capacity expansion are related to thermal coal. Regarding coal imports, we expect limited growth upside and unstable supply due to geopolitical factors. The decline in quality coal imported from Australia in recent years has caused structural and regional shortages of coking coal in China. Consequently, the supply of quality prime coking coal in China has further tightened and resource scarcity has presented a formidable constraint.
中國煉焦煤供給增長中長期可能缺乏勢頭，因爲現有國內煤礦的資源持續開採年限可能不足 30 年，大部分新容量和批准的容量擴建礦井都與動力煤有關。關於煤炭進口，由於地緣政治因素，我們預計增長空間有限且供應不穩定。近年來從澳大利亞進口的優質煤炭質量下降造成了中國煉焦煤結構性和區域性供 shortage，導致中國優質主板煉焦煤供應進一步緊縮，資源緊缺形成了一種嚴峻制約。
The proportion of prime coking coal in consumption will likely increase amid blast furnace-based high-quality production. In our view, prices of prime coking coal will likely remain high, and the price spread between prime coking coal and coal blending will likely widen.
在高爐基礎上，主板煉焦煤在消費中的比例可能會增加，我們預計主板煉焦煤的價格可能會保持高位，主板煉焦煤和煤混合的價差可能會進一步擴大。
Huaibei Mining has advantages in resource reserves, coal quality, and locations of mines; new mines to contribute additional capacity. The firm is controlled by the State-owned Assets Supervision and Administration Commission of Anhui Province. It has 17 in-service mines in Huaibei city, Anhui province, and these mines are close to large steel mills and power plants in eastern China. In 2023, the firm had 2.05bnt of mineable resources and 35.85mnt of approved production capacity. Its coal mines, with around 57 mining years, produced 21.97mnt of commercial coal in 2023. Specifically, clean coal accounted for 52% of the firm's coal output, and 70% of the clean coal was quality prime coking coal and fat coal.
淮北礦業在資源儲備、煤質、礦井地理位置上具有優勢；新礦將爲公司貢獻額外產能。公司由安徽省國有資產監督管理委員會控制。其擁有安徽省淮北市 17 處在役煤礦，這些煤礦靠近中國東部的大型鋼鐵廠和電廠。截至 2023 年，公司擁有 20.5 億噸可採資源和 3,585 萬噸批准產能。該公司的煤礦，在約 57 年的時間裏，於 2023 年生產了 2197 萬噸商業煤炭。具體而言，清潔煤佔公司煤炭產量的 52%，其中 70% 的清潔煤是優質主板煉焦煤和脂肪煤。
Huaibei Mining commenced operation of its Xinhu coal mine with 3mnt of capacity in 2021. According to corporate filings, it plans to put 8mnt of 6,000kcal thermal coal capacity at the Taohutu mine in Inner Mongolia into operation at end-2025, aiming to ensure quality coal supply in the medium and long term.
淮北礦業於 2021 年開採了新湖煤礦，產能爲 300 萬噸。根據公司文件，該公司計劃在 2025 年底將內蒙古的陶乎突煤礦 6,000 千卡熱值動力煤產能的 8,000 萬噸投入運營，以確保中長期質量煤供應。
In 2023, net operating cash flow of the firm was Rmb13bn, and monetary capital and financial assets were Rmb8.6bn. Its liability-to-asset ratio was 52% and dividend payout ratio was 43% in 2023, and return on equity (ROE) averaged 23% in the past five years. The firm will likely increase dividends after its Taohutu project comes online at end-2025, in our view.
2023 年，公司的淨營運現金流爲 130 億元人民幣，貨幣資本和金融資產爲 86 億元人民幣。其資產負債率爲 52%，2023 年的股息支付率爲 43%，過去五年的 ROE 平均爲 23%。在我們看來，該公司的股息將在 2025 年末陶乎突項目投產後增加。
We expect coal sales volume to increase and prices to remain stable in 2024-2026; losses from coal chemical business to decline YoY. Production and sales volume at the Xinhu mine were dampened in 2H23 by production suspension and regional safety supervision. According to our survey, the Xinhu mine is likely to resume production in 3Q24 and the new production capacity at Yuandian Erjing mine is underway. Therefore, we expect the firm's coal output to increase moderately in 2024, to approach 24mnt in 2025 after the Xinhua mine resumes production (up 9% from the 2023 level), and to continue to ramp up as the 8mnt of capacity when the Taohutu mine starts operating in 2026.
我們預計 2024-2026 年煤炭銷售量將增加，價格將保持穩定；煤化工業務的虧損將同比下降。新湖煤礦在 2023 年下半年生產暫停和地區安全監管的壓制下，生產和銷售量受到了抑制。根據我們的調查，新湖煤礦可能在 3Q24 恢復生產，遠古二井煤礦的新產能正在計劃之中。因此，我們預計該公司的煤炭產量將略有增加，2025 年在新湖煤礦恢復生產後接近 2400 萬噸（較 2023 年水平上升 9%），並在陶乎突煤礦 800 萬噸能力投入運營時繼續增加。
The firm's coal chemical business reported losses of more than Rmb1.3bn in 2023 due to sluggish demand. We expect its losses to narrow in 2024 as ethanol and dimethyl carbonate (DMC) capacity ramps up. According to our survey, the firm is expanding its coverage of non-coal mines, and its mines that produce sand, gravels, and aggregate are scheduled to come online and generate earnings in 2024-2025.
該公司的煤化工業務由於需求疲軟，在 2023 年報告的虧損超過了 13 億元人民幣。隨着乙醇和二甲醚（DMC）產能的提高，預計該公司的虧損將在 2024 年收窄。根據我們的調查，該公司正在擴大非煤礦的覆蓋範圍，其生產砂石和骨料的礦山計劃在 2024 年至 2025 年上線並創造收益。
How do we differ from the market? The market is concerned that weak demand will likely weigh on coal prices in the short term. We are upbeat on prime coking coal prices in the short term and expect the value of prime coking coal to experience a re-rating in the medium and long term.
我們不同於市場，市場擔心短期內需求疲軟將拖累煤炭價格。我們對主板煉焦煤價格持樂觀態度，預計主板煉焦煤價值在中長期將經歷重估。
Potential catalysts: Demand recovers; Xinhu coal mine resumes production.
潛在催化劑：需求復甦；新湖煤礦恢復生產。
Financials and valuation
財務和估值。
We estimate the firm's EPS at Rmb2.34 in 2024 and Rmb2.55 in 2025, implying a CAGR of 5%. The stock is trading at 8x 2024e and 7x 2025e P/E. We initiate coverage on Huaibei Mining with an OUTPERFORM rating and a target price of Rmb23.00, implying 10x 2024e and 9x 2025e P/E, offering 33% upside.
我們預計該公司在 2024 年的每股收益爲 2.34 元人民幣，在 2025 年爲 2.55 元人民幣，預計 CAGR 爲 5%。該股票正以 2024e 和 2025e 市盈率分別爲 8 倍和 7 倍交易。我們開始爲淮北礦業控股提供 OUTPERFORm 評級和目標價 23.00 元人民幣的覆蓋，預計對應 2024e 和 2025e 市盈率分別爲 10x 和 9x，提供 33% 的增長空間。
Risks
風險
Demand lower than expected; coal imports higher than expected; production resumption at Xinhu coal mine slower than expected.
需求不及預期；煤炭進口高於預期；新湖煤礦復產速度慢於預期。
譯文內容由第三人軟體翻譯。
