\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 546 Shanxi Coal International Energy Group Co.Ltd(600546) )
Event: on March 10, 2022, the company issued an announcement on the operation from January to February 2022. From January to February 2022, the company achieved a total operating revenue of about 7.22 billion yuan, a year-on-year increase of about 11.4%; The net profit attributable to the shareholders of the listed company was about 842 million yuan, with a year-on-year increase of about 293.46%.
Benefiting from the rise in coal prices, the company’s performance was greatly released. According to the announcement, the company realized a net profit of about 842 million yuan attributable to shareholders of listed companies from January to February 2022, with a year-on-year increase of about 293.46%. We believe that the sharp rise in the company’s performance is mainly due to the rise in coal prices. According to wind data, from January to February, the average price of q5500 thermal coal in Datong, Shanxi and q5800 thermal coal in Changzhi increased by 42.2% and 86.3% respectively compared with the same period last year. Thanks to the rise in coal prices, the company’s performance from January to February was greatly released.
The profit is expected to be better in March. Considering the output side, the production may be disturbed due to the Spring Festival from January to February. The production of the company is expected to recover to the normal level since March. From the price side. Since March, the port coal price has rebounded rapidly, and the company’s comprehensive coal price is also expected to rise month on month. Therefore, we expect that in March, the company’s coal production business is expected to rise in both volume and price, and the performance is expected to continue to release.
The company has flexible pricing mechanism and strong performance flexibility. According to the company’s exchange on the SSE e interactive platform, “the company’s sales department has formulated a price mechanism for self-produced coal products under the overall consideration of the coal quality characteristics of different products, index changes, peer price adjustment, customer demand and other variables, calculates the price base according to the latest research data in the late part of each month, and determines the final price according to different types of customers”. The company’s pricing mechanism is flexible and closely tracks the market, so it fully shares the dividends from the rise of coal prices.
Strictly control trade risks and the gross profit margin is expected to increase. According to the announcement, in the first three quarters of 2021, the company achieved 524228 million tons of commercial coal sales, a year-on-year decrease of 36.27%; 293785 million tons of commercial coal were produced, with a year-on-year decrease of 1.39%. Therefore, it is expected that the decline of the company’s coal sales will mainly come from the decline of the amount of trade coal. Due to the low gross profit margin of trade coal, the decline of the company’s trade volume will help reduce the trade risk on the one hand and improve the gross profit margin of the company’s coal business on the other hand.
Low cost ensures profit space. The unit cost of self-produced coal of the company in 2020 is 149.7 yuan / ton, which is low among listed companies of power coal. The low production cost ensures the profit space of the company. Combined with the flexible pricing mechanism of the company, the profit space of the company is sufficient, and the performance is expected to be fully released in the upward cycle of coal price.
Investment suggestion: according to the latest performance express and coal price performance, the profit forecast is raised. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 4.948 billion yuan, 7.454 billion yuan and 7.613 billion yuan, equivalent to EPS of 2.50/3.76/3.84 yuan / share respectively. The PE corresponding to the closing price on March 10, 2022 will be 5 times, 4 times and 3 times respectively, which is of low valuation in the industry. Maintain a “recommended” rating.
Risk tip: coal prices have fallen sharply, and the construction progress of new energy projects is less than expected.
