\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 546 Shanxi Coal International Energy Group Co.Ltd(600546) )
Event: the company released the annual performance express of 2021. In 2021, the company achieved a total operating revenue of 48.14 billion yuan, a year-on-year increase of 35.9%; The net profit attributable to the parent company was 4.95 billion yuan, a year-on-year increase of 498.7%; The net profit deducted from non parent company was 5.03 billion yuan, with a year-on-year increase of 490.5%. The basic earnings per share was 2.5 yuan, a year-on-year increase of 495.2%.
Q4 single quarter profit far exceeded market expectations, with a month on month increase of 252%. According to the calculation of the company’s performance forecast, in Q4 of 2021, the company realized a net profit attributable to the parent company of 3.19 billion yuan, a year-on-year increase of 1660.9% and a month on month increase of 251.7%, far exceeding the market expectation. Main reasons: (1) affected by the continuous improvement of the prosperity of the coal industry and the continuous rise of the coal market price, the average price of q5500 in Qinhuangdao in 2021 was 1030 yuan / ton, an increase of 78.5% year-on-year, of which the average price of Q4 in 2021 was 1350 yuan / ton, an increase of 18.2% month on month compared with Q3; (2) The company comprehensively implemented lean management, scientifically controlled costs, moderately released advanced production capacity, ensured energy supply, and greatly optimized asset quality.
The burden of history has been basically digested, and the assets have been optimized and loaded lightly. At the beginning of its establishment, the company was a traditional trading company. Previously, due to the company’s poor risk management of coal trade business, it was difficult for the company to collect the payment, and the risk of bad debts increased significantly. Since 2014, the company has withdrawn a total loss of bad debts of about 8.1 billion yuan. In order to optimize the asset quality, since 2016, the company has strictly controlled the trade risk, reduced the trade scale, made efforts to clean up the problems left over by history, accelerated the disposal of some trading subsidiaries with serious losses, launched the “downsizing plan”, and continuously reduced the burden of subsequent performance.
Abundant cash flow in hand, dividends are expected to exceed expectations. The company has a complete variety of commercial coal, mostly lean coal, including coking coal, fat coal, lean coal, lean coal, anthracite, gas coal, long flame coal, etc; Because some coal products are not power coal, they are not subject to the price limit control of the port, and the prices are mostly sold at spot prices. Under the background of high coal prices, the performance flexibility is huge, and there is still room for profit growth. Considering that the company’s historical burden has been basically digested, there is no major capital expenditure, the profit is higher than expected, the cash flow on hand is abundant, and the company’s dividend is expected to increase under the background of high dividend in the industry.
Under the background of steady growth, coal prices may exceed market expectations, and the valuation needs to be repaired urgently. On the one hand, the supply guarantee policy is expected to gradually withdraw after the year, and the output ceiling basically appears; On the one hand, the previous central economic work conference defined the “political task” centered on economic construction (for the first time in seven years), with clear intention to stabilize (stimulate) growth. The pro cycle will return in the first half of the year, and the revaluation of traditional industries has not ended. Considering that the corresponding valuation of the company’s performance in 2021 is less than 5 times, it needs to be repaired urgently.
Investment advice. The company has complete coal types and excellent coal quality. It continues to strictly control trade risks, reduce trade coal sales, and significantly improve its profitability. At present, the static valuation is less than 4 times, which is at the lowest level in history and needs to be repaired urgently. We expect that the net profit attributable to the parent company from 2021 to 2023 will be 4.95 billion yuan, 5.5 billion yuan and 5.72 billion yuan respectively, and the EPS will be 2.50 yuan, 2.77 yuan and 2.89 yuan respectively. The corresponding PE is only 4.9, 4.4 and 4.2, maintaining the “overweight” rating.
Risk tip: coal prices fell sharply, bad debt risk broke out, and the transformation of new energy was less than expected.
