Event: on April 20, 2018, the company released the production and operation data announcement for the first quarter of 2018, resulting in a substantial increase in coal production and sales and gross profit.
Comment
The washing rate of commercial coal increased significantly: in the first quarter of 2018, the company achieved an output of 2.0333 million tons of raw coal, an increase of 4.15 percent over the same period last year, an increase of 6.42 percent over the same period last year; and sales of commercial coal reached 1.4675 million tons, an increase of 28.2 percent over the same period last year and an increase of 47.35 percent over the same period last year. All the raw coal produced by the company has been washed, and it is estimated that the washing rate of commercial coal in the first quarter was 72.17%, up 13.35 percentage points from 58.64% in the same period last year and 3.23 percentage points higher than 68.94% in 2017. The improvement of commercial coal washing rate will further improve the company's coal profitability.
Excellent cost control and greatly improved profitability: benefiting from the rise in coal prices, the company reached 1.441 billion yuan in the first quarter of 2018, an increase of 30.4% over the same period last year. In the same period, the average price of gas and refined coal in Jiangsu was 1109.83 yuan / ton, an increase of 6.92% over the same period last year. The company's coal sales cost is 683 million yuan, an increase of only 6.1% over the same period last year, with excellent cost control. Affected by this, the company's gross profit increased significantly, and the company achieved a gross profit of 758 million yuan, an increase of 64.27% over the same period last year. In the first quarter of 2018, the gross profit margin of the company's coal business was 52.62%, up 10.85% from the same period last year and 7.63% higher than the 44.99% in 2017.
The first phase of the project is nearing completion, and Datun electric heating is set up, which is expected to strengthen the integration of coal and electricity: according to the announcement, the company has three pairs of coal production mines (Xuzhuang, Kongzhuang and Yaoqiao) in Xuzhou production base, with an annual approved capacity of 8.05 million tons. The coal mine projects under construction are: 1) Xinjiang Weizigou Coal Mine Project, with a design capacity of 3 million tons per year, and mining licenses are being processed; 2) 106 coal mine projects with an estimated total production capacity of 1.8 million tons will be carried out by stages, with a scale of 1.2 million tons in the first phase. it is nearing completion, and the mining license is being processed at present.
In terms of power, the company currently has a total installed capacity of 444MW; Datun 2 × 350MW coal gangue cogeneration project is under construction; Datun Electric heating Co., Ltd., a wholly-owned subsidiary, has been established, which is expected to help expand power sales and strengthen the integration of coal and power in the future.
Investment suggestion: give an investment rating of-A, with a 6-month target price of 12.00 yuan, equivalent to 10 times dynamic price-to-earnings ratio. We estimate that the company's main income from 2018 to 2020 will be 7.387 billion yuan / 7.912 billion yuan / 8.151 billion yuan respectively, the net profit will be 869 million yuan / 1.055 billion yuan / 1.127 billion yuan respectively, and the corresponding EPS will be 1.20 Placement 1.46 yuan 1.56 yuan respectively; the company's future performance is expected to continue to improve, which is worthy of attention in the medium and long term.
Risk hint: the macroeconomic downturn and the sharp drop in coal prices