Yankuang energy (600188)
The power coal leader in East China has strong background, excellent strength and sufficient stamina. The company is the largest coal producer in East China and belongs to Yanmei Australia. It is the largest exclusive coal producer in Australia and has a significant market position. Relying on the third largest coal enterprise in China and the only provincial coal group, the company has a unique position in the province. As the group’s only coal industry listing and integration platform, it is expected to continue to acquire the group’s high-quality coal assets and has great growth potential. The company is deeply engaged in the main business of coal. After the acquisition of the group’s high-quality assets in 2020, the coal production capacity is further improved, the chemical products are expanded from the original single methanol to three industrial chains of methanol, acetic acid and coal liquefaction to oil, and the transformation of new materials is accelerated; At the same time, the company has sufficient projects under construction and vigorous development potential. The company will actively implement the national “double carbon” strategic deployment, implement the new development concept, expand the Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) layout, and strive to build a world-class comprehensive clean energy service provider. In order to more fully reflect the business connotation and industrial layout of the company and meet the needs of operation management and business development, the company plans to change its name to “Yankuang Energy Group Co., Ltd.” and its abbreviation to “Yankuang energy” on December 9.
Coal: the layout of three places outside China has full potential and can be expected in the future. Spot: it is estimated that the spot price of China Shipbuilding Industry Group Power Co.Ltd(600482) coal in 2022 will show a trend of first restraining and then rising (bottoming out in the first half of the year), and the price center will be about 800 yuan / ton, still maintaining a high level. Long term association: the benchmark price of long term association will be significantly increased to 700 yuan / ton, and it is expected that the center of long term association will rise to about 750 yuan / ton in the whole year, up about 100 yuan / ton year-on-year, which will improve the certainty of long term association center. Moreover, this long term association has proposed a reasonable range for the first, “550 ~ 850 yuan / ton” allows a wide range of price shocks, dispels the market’s concern about the return of coal to “planned coal”, makes the overall profit of the industry more stable, and is conducive to the overall improvement of industry valuation. Overseas: coal consumption is still expected to increase, and the price is expected to remain high next year. The company deeply cultivates its main business and has strong planting advantages, Continue to promote the “three bases” in Shandong (Headquarters), Shanxi, Shaanxi, Inner Mongolia and Australia Construction, holding 100 million tons of high-quality resources, and the capacity scale ranks in the forefront of the industry. Based on the advantages of the company’s resource endowment, strong profitability and the gradual recovery of Q4 production and sales, the performance of the sector is expected to continue to grow at a high speed. In the future, the company’s Shandong base will continue to tap potential, improve quality and efficiency, and the proportion advantage of high and long-term association is expected to be enlarged, and the profitability will continue to increase; The production capacity of Shanxi, Shaanxi and Inner Mongolia base is continuously released and has great growth potential; The performance of Australia base has ushered in an inflection point, and overseas cooperation can be expected in the future.
Coal chemical industry: the plate is becoming more and more mature, and the transformation of new materials is accelerating. The production process of coal chemical industry has the ability to save carbon. The development of coal chemical industry meets the requirements of “double carbon”. Driven by policies, the industry is accelerating its transformation to modern coal chemical industry. The coal chemical industry has great potential and prospects. After the company acquired the group’s high-quality assets, the industrial territory gradually became clear. By the end of 2020, The company has a methanol production capacity of 2.4 million tons / year (including 600000 tons / year of Yulin Energy and chemical, Inner Mongolia Eerduosi Resources Co.Ltd(600295) 1.8 million T / a), 1 million T / a acetic acid, 380000 T / a ethyl acetate, 1 million T / a oil and chemical products, and 100000 t / a Fischer Tropsch wax finishing capacity. In the future, the company will go deep into high-end Chemical & new materials in the province, continue to expand the production base of chemical raw materials outside the province, further promote the transformation of coal from single fuel to equal emphasis on fuel and raw materials, and from carbon emission to carbon fixation, so as to realize a gorgeous turn.
Investment advice The company is the leader of power coal in East China, backed by Shandong energy, the second largest coal enterprise in China, with outstanding geographical advantages. The company’s coal sector is distributed in three places, holding 100 million tons of high-quality resources, and the capacity scale ranks in the forefront of the industry. With the gradual recovery of Q4 production and sales, the performance of the sector is expected to continue to grow. In addition, the company vigorously develops the modern coal chemical industry, realizes the extension from basic chemical industry to high-end chemical industry, further promotes the transformation of coal from single fuel to equal emphasis on fuel and raw materials, and from carbon emission to carbon fixation, so as to realize a gorgeous turn. The benchmark of the long-term association has been significantly raised, and the industry valuation needs to be repaired. As a regional leading target, the company has strong background, excellent strength and sufficient potential, and the valuation is expected to continue to improve. We expect that the net profit attributable to the parent company from 2021 to 2023 will be RMB 17.33 billion, RMB 15.78 billion and RMB 16.51 billion respectively, and EPS will be RMB 3.56, RMB 3.24 and RMB 3.39 respectively, corresponding to PE of 7.2, 7.9 and 7.6. For the first time, give a “buy” rating.
Risk tip: coal prices have fallen sharply, asset injection is uncertain, the production progress of Mines under construction is less than expected, and the development of new materials business is uncertain.
