1. The sharp rise in the price of global resource products has pushed up the level of inflation, which is gradually becoming a more deterministic investment main line. Since the beginning of 2022, the price of power coal in the three major ports in the world has risen sharply. Among them, the spot price of power coal in ara port in Europe / Richard Rb / Newcastle NEWC has increased by 30% / 89.5% / 60.3% respectively. The price difference between coal prices outside China has continued to expand, increasing the pressure on China’s coal price regulation, but also giving impetus to the stable growth of the industry.
2. The objectives of the two sessions are good for coal, and there is still room for the target price of the long-term association to rise. The government work report continues the spirit of the economic conference: it continues the spirit of the previous central economic conference and emphasizes that the energy revolution should be established first and then broken. Considering the whole situation, the general secretary’s speech further emphasizes that the green transformation should be established first and then broken: we can’t throw away the guys who eat first. The target price of the long-term association is still higher than that in previous years, and the profitability of coal enterprises is guaranteed.
3. There is still a bottleneck in the overall supply and release of coal. Long construction cycle, weak investment willingness of coal enterprises, high debt ratio, high financing cost, stricter approval of new capacity and other factors restrict the large-scale release of coal capacity, and supply constraints still exist.
4. Value and growth: the dividend yield is in the forefront of various industries, and the dynamic P / E ratio of the sector is less than 10 times. During the 14th Five Year Plan period, coal consumption can still maintain a positive growth. During the 15th Five Year Plan period, with the development of clean and efficient utilization technology of coal, China’s coal has a natural price advantage in traditional fossil energy (coal, oil and natural gas), which is expected to be more applied in the fields of coal power and non power. On the premise of China’s steady economic growth, coal consumption will still maintain a certain positive growth.
Investment suggestion: buy coal stocks and enjoy the dividends gradually realized by the cost advantage of coal. Policy regulation will lead to repeated investment process, but the long-term direction is clear. It is recommended to invest in China Shenhua Energy Company Limited(601088) ( China Shenhua Energy Company Limited(601088) ), the leader with high proportion of Changxie coal, Shaanxi Coal Industry Company Limited(601225) ( Shaanxi Coal Industry Company Limited(601225) ) with excellent resource endowment and Shanxi Coking Coal Energy Group Co.Ltd(000983) ( Shanxi Coking Coal Energy Group Co.Ltd(000983) ) of China’s coking coal.
