\u3000\u3000 Pingdingshan Tianan Coal Mining Co.Ltd(601666) (601666)
Event: on January 27, 2022, the company issued a pre increase announcement of performance. The company expects to realize a net profit attributable to shareholders of listed companies of about 2.875 billion yuan in 2021, an increase of 1.488 billion yuan compared with the data of the same period of last year, a year-on-year increase of 107.23%.
The performance increased significantly in the fourth quarter of 2021. According to the calculation of the announcement, in the fourth quarter of 2021, the company realized a net profit attributable to the shareholders of the parent company of 1.107 billion yuan, an increase of 222.74% year-on-year and 55.92% month on month.
In 2021, the coal output declined slightly and the price rose significantly. According to the announcement, in 2021, the company produced 28.8506 million tons of raw coal, a year-on-year decrease of 6.39%, sold 30.6507 million tons of commercial coal, a year-on-year decrease of 2.74%, the price of ton coal was 915.99 yuan, a year-on-year increase of 36.9%, the cost of ton coal was 636.67 yuan, a year-on-year increase of 33.47%, and the gross profit margin of ton coal was 30.49%, a year-on-year increase of 1.79 percentage points.
Coal prices continued to rise month on month in the fourth quarter of 2021. According to the calculation of the announcement, in the fourth quarter of 2021, the company completed the coal output of 7.1375 million tons, a year-on-year decrease of 10.13%, a month on month increase of 4.19%, and the sales volume of commercial coal of 7.7019 million tons, a year-on-year decrease of 5.58% and a month on month increase of 6.25%. In the fourth quarter of 2021, the selling price per ton of coal was 1234.59 yuan, an increase of 92.12% year-on-year and 35.32% month on month; The cost per ton of coal was 830.72 yuan, a year-on-year increase of 98.99% and a month on month increase of 31.3%. The gross profit margin of coal business was 32.71%, down 2.33 percentage points from the same period last year and up 2.06 percentage points from the third quarter.
Reducing staff and increasing efficiency is conducive to the reduction of coal mining costs. The company actively promotes the intelligent construction of coal mines, and invests funds to upgrade equipment every year to improve the mining efficiency of single mining face. In the future, all 14 mines will complete intelligent coverage; At the same time, the company vigorously carried out staff reduction and efficiency increase. The company deployed the ten-year plan for human resources reform, actively and steadily promoted the “great job transfer of 10000 mining workers”, and strive to optimize the number of coal mine workers to less than 40000 in 5-8 years, so as to greatly improve the per capita work efficiency. According to the 2020 annual report, the human cost (employee compensation) accounts for about 34% of the company’s coal mining cost. The reduction of staff means that the company’s human cost decreases, which helps the company’s ton coal mining cost decline, so as to explore greater profit space.
The dividend yield is at the leading level in the industry. According to the dividend return plan for shareholders from 2019 to 2021 issued by the company on February 29, 2020, the annual dividend rate from 2019 to 2021 shall not be less than 60% and the dividend per share shall not be less than 0.25 yuan. Based on the stock price on January 27, 2022, the dividend rate is 7.5%, which is at the leading level in the industry.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 2.875 billion yuan, 3.521 billion yuan and 3.729 billion yuan, corresponding to EPS of 1.22/1.50/1.59 yuan / share respectively, and PE corresponding to the closing price on January 27, 2022 will be 8 times, 7 times and 6 times respectively, with low valuation in the industry. For the first coverage, give a “recommended” rating.
Risk tip: coal prices have fallen sharply, the improvement of downstream demand margin is less than expected, and the effect of staff reduction is less than expected.
