Shanxi Meijin Energy Co.Ltd(000723) (000723)
Based on coal coke business, actively layout hydrogen energy business. Shanxi Meijin Energy Co.Ltd(000723) is a listed platform under Shanxi Meijin Energy Co.Ltd(000723) group (holding 47.48%), and the actual controller is the Yao family. The company is mainly engaged in coal and coking business. In 2017, the company began to actively explore the transformation to new energy. Relying on rich coal coke assets and the first mover advantage of low-cost hydrogen production from coke oven gas, the company actively arranged the upstream and downstream of the hydrogen energy industry chain. Thanks to the high prosperity of the main industries of coal and coke, the profit increased significantly in the first three quarters of 2021, realizing an operating revenue of 15.77 billion yuan (+ 76%), and a net profit attributable to shareholders of listed companies of 2.02 billion yuan (+ 345%).
Coal coke business: a leader in the industry, and the coking capacity is expected to further expand. At present, the coal coke business is the main source of the company’s revenue. In terms of coal supply, the company has four pairs of mines, with a total capacity of 6.3 million tons / year (equity 5.82 million tons / year), mainly coking and coal blending, and some coking coal is supplied internally, with synergistic effects at the upstream and downstream; In terms of coking, the company has three coking plants in production, with a total capacity of 7.15 million tons / year (equity 6.48 million tons / year), a capacity under construction of 7.3 million tons / year, and a supply capacity of many by-products such as tar, crude benzene, gas and high-purity hydrogen. Under the background of marginal improvement of real estate and continuous compression of industrial capacity, the performance of the company’s coal coke business is expected to continue to improve.
Hydrogen energy business: the layout of the whole industrial chain, and the layout of hydrogen energy industrial chain continues to expand. Under the dual carbon target, hydrogen energy, as a clean and carbon free secondary energy, has huge development space. Based on the traditional coking business, the company actively arranges all links from hydrogen energy upstream hydrogen production to downstream vehicle. In hydrogen production, the company’s coke oven gas can theoretically extract hydrogen of 64000 tons / year, with low price and competitiveness. At the same time, it also joins hands with Beijing Huanyu Jinghui, a supplier of Beijing Winter Olympic Games; In hydrogenation, the company currently has 8 holding hydrogenation stations in operation, and 100 are planned to be built during the 14th Five Year Plan period; In terms of fuel cell parts, the company shares in Guohong hydrogen energy and Hongji chuangneng, deeply arranges key fields such as stack and membrane electrode, and has leading advantages in technology and scale; In the aspect of fuel cell vehicle, the company controls Feichi automobile. Feichi automobile has a variety of hydrogen fuel cell vehicles operating outside China, accounting for about 15% of the market in China. The company plans to split it to be listed on the gem to further expand its business; In addition, the company advanced the core area of the card position and continued to expand its business in six regions, such as Shanxi, Shandong, Yangtze River Delta, Beijing Tianjin Hebei, energy golden triangle, Guangdong, Hong Kong and Macao Bay area.
Super capacitor business: breakthrough in activated carbon technology, which is expected to be replaced by domestic products. Supercapacitor is an energy storage device with wide application space. The core component of electrode material – capacitor carbon is mainly imported in China. As early as 2016, the company began to cooperate with Shanxi Coal Chemical Institute in the research and development of capacitor carbon, and realized the implementation of high-quality capacitor carbon production line in 2019, reaching the international advanced level and can replace imports. In 2020, the company started the industrialization of 1000 t / a capacitor carbon, which is expected to realize domestic substitution and contribute to performance in the future.
Profit forecast and Valuation: we predict that the net profit attributable to the parent company from 2021 to 2023 will be RMB 2.43/2.82/2.94 billion respectively, with a year-on-year increase of 245% / 16% / 4%, equivalent to EPS of RMB 0.57/0.66/0.69/share respectively. The current stock price of RMB 16.23 corresponds to PE of 28.5/24.6/23.6 times respectively. Considering that the capacity of the coke industry continues to decrease, while the company’s capacity still has growth potential, and the market share is expected to further increase; The company has actively transformed the field of new energy and new materials. On the one hand, it has laid out a promising hydrogen energy field and has strong leading position advantages in hydrogen production, key parts of fuel cell and whole vehicle. On the other hand, it has joined hands with Shanxi Institute of coal chemistry, Chinese Academy of Sciences to lay out super capacitor business, which has the possibility of large-scale domestic substitution. The above new energy and new materials business has broad growth space, The company has certain leading advantages. Covering the company for the first time and giving a “buy” rating.
Risk tips: 1) the risk that the economic growth is lower than expected may lead to the decline in the price of coke, the main product of the company. See the following text for the risk calculation of price decline. 2) Safety production and environmental protection risks. The coal mining industry in which the company is located is a high-risk industry, with risks in safety production; Coke industry is an industry with high energy consumption and high pollution, and there are risks in environmental protection and production restriction. 3) There is a risk that the R & D, production and sales of new energy business are less than expected. If the R & D Progress of new energy related subsidiaries is less than expected or the growth of production and sales is slow, it may affect the company’s performance. 4) The public data used in the research report may have the risk of information lag or untimely update.
