\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 575 Huaihe Energy (Group) Co.Ltd(600575) )
The profit of coal power integration enterprises declined slightly in 21 years Huaihe Energy (Group) Co.Ltd(600575) (Group) Co., Ltd. is mainly engaged in railway transportation business, coal trade business and power business. Railway transportation business is the main profit source of the company. According to the 2021 interim report data, the company's trade logistics business provides 70% of the operating revenue, but the gross profit accounts for only about 12%. The company's main source of profit is railway transportation business, with the gross profit accounting for 41%, followed by coal business, accounting for 27%, and power business, with the gross profit accounting for only 6%. According to the announcement, the net profit attributable to the shareholders of the listed company in 2021 will be 414 million yuan to 444 million yuan, a year-on-year decrease of 31.7 million yuan to 61.7 million yuan, a year-on-year decrease of 6.67% to 12.98%. The main reason for the decline in performance is that the price of thermal coal rose too fast in 2021, and the coal-fired cost of wholly-owned power plants increased, resulting in a decline in the performance of the power generation sector.
Huainan mining plans to be listed as a whole, and the profits of listed companies are expected to thicken. Huainan Mining Group is the leader in the integration of coal and electricity in East China. It is one of 13 large coal bases and 6 large coal and electricity bases in China. At the end of March 2021, the company's total consolidated assets were 132231 billion yuan, the owner's equity was 34.665 billion yuan (including 11.525 billion yuan of minority shareholder's equity), and the scale of assets was huge, In the first three quarters of 2021, the net profit attributable to the shareholders of the parent company was 2.966 billion yuan, a year-on-year increase of 22%, and the profit was much higher than that of the listed company. According to the bond offering letter of Huainan mining, by the end of March 2021, the approved production capacity of the group's mines in production was 76.1 million tons / year, including 9 mines in the headquarters, with an approved production capacity of 56.1 million tons / year, and 3 Inner Mongolia Eerduosi Resources Co.Ltd(600295) mines in Mengxi, with an approved production capacity of 20 million tons. Considering that Dingji mine (6 million tons) has been injected into the listing platform, it is expected that 70.1 million tons of coal mine capacity will be injected this time. After the completion of asset injection, the coal production capacity of listed companies may be expanded by 116833%. By the end of March 2021, Huainan Mining Group has a total of 24 holding and participating power plants, with a total installed capacity of 37.81 million KW and an equity capacity of 16.73 million KW. It is the power enterprise with the largest equity scale and installed capacity in Anhui Province. Considering that there are 2.5514 million kW in the listed company, the equity installed capacity is expected to be 14.18 million KW, The power installed capacity of listed companies was expanded by about 455.7%.
The coal price is expected to remain high, and the profit of Huainan Mining Group is expected to continue. The fixed asset investment in the coal industry has remained at a low level, which has led to the low speed of new production capacity in recent years. Considering that the new coal industry is expected to maintain a high carbon production capacity in the current 5-year boom period, even if the new coal industry is expected to maintain a high carbon production capacity in the long term. On February 28, 2022, the notice on the supervision of medium and long-term coal contracts in 2022 made it clear that the benchmark price of the long-term association was 675 yuan / ton, while the previous benchmark price of the long-term association was 535 yuan / ton, and the price center of the long-term association increased by 140 yuan / ton, an increase of 26%. Huainan Mining Group has many downstream power customers. The increase of the benchmark price of the long-term association will help the rise of the comprehensive selling price of Huainan Mining Group, and the profit of Huainan Mining Group is expected to be sustainable.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 434 million yuan, 650 million yuan and 828 million yuan, with EPS of 0.11/0.17/0.21 yuan / share and PE of 30 / 19 / 15 times (based on the share price on March 11, 2022). For the first time, give a "cautious recommendation" rating.
Risk warning: the risk of merger termination of Huainan Mining Group; Loss risk of power business
