Introduction to this report:
Coal was replenished at a price, and 22H1 performance surged, slightly exceeding expectations; although the volume and price of coal rose sharply in Q2, performance declined month-on-month due to calculated depreciation; the transformation of green power and new mines is about to be put into operation, and growth is remarkable.
Key points of investment:
Raise profit forecasts and target prices to maintain the increase in holdings rating. The company's 22H1 revenue was 6.77 billion yuan (+51.8%) and net profit of 1.55 billion yuan (+253.0%). Benefiting from the boom in the coal market, the performance slightly exceeded expectations. The company's 22-24 EPS was raised to 3.48, 3.68, and 3.89 (previously 3.21, 3.41, 3.62) yuan EPS, according to the industry average, giving the company 7xPE in '22, raising the target price to 24.36 (previously 21.85) yuan, increasing the rating.
Supplementing coal at a price, 2
2H1 performance increased dramatically. The company's 22H1 commercial coal production was 3.34 million tons (-0.5%) and sales volume was 3.33 million tons (-0.7%), with little fluctuation. Benefiting from the boom in the coal market, commercial coal sold 1,441 (+762) yuan/ton, making up with price, to achieve commercial coal sales revenue of 4.80 billion yuan (+110.8%); at the same time, the cost per ton of coal increased to 531 million (+94) yuan. The gross profit of the coal business was 3.03 billion yuan (+272.8%). Furthermore, due to rising coal prices, the net profit of the subsidiary Datun Electric 22H1 was 0.1 billion yuan, down 60 million yuan from the previous year. The decline in electricity profits did not hinder a sharp increase in performance over the previous year.
Q2 The volume and price of coal rose sharply. Affected by calculated depreciation and devaluation, single-quarter performance declined. The company achieved net profit of 770 million yuan (-1.9%) in 22Q2, of which: 1) the coal business grew and the company's gross profit increased. The Q2 company sold 1.83 million tons of coal (+22.3% over the previous month), or production increased to 1.77 million tons due to Q2 company's adjustment of production plans, an increase of 190,000 tons over the previous month. During the same period, the price of a ton of coal sold 1,484 yuan, up 94 yuan from the previous month. The coal business achieved revenue of 2.7.2 billion yuan (+30.6% month on month) and gross profit of 1.74 billion yuan (+34.9% month on month). With coal growth, the company's Q2 gross profit totaled 1.77 billion yuan (+34.6%). 2) The Q2 company prepared a total of 350 million yuan for impairment of its power plants and equity accrued assets. Affected by impairment accrual, Q2 performance declined month-on-month.
The transformation of green power and new mines is about to be put into operation, with remarkable growth. 1) The first phase of the company's new energy demonstration base project, the 263MW photovoltaic project, fully started construction on the basis of the initial 30MW successful grid-connected power generation. 2) The Weizigou coal mine (2.4 million tons production capacity) is expected to be put into operation in 2023.
Risk warning. Coal prices fell more than expected; the transformation of green electricity fell short of expectations
