Long term low investment leads to high coal prices, and new production capacity + intelligence is the key to solve the problem. Since 2014, China's fixed asset investment in coal mining and washing industry has continued to decline. Capital expenditure in 2020 decreased by 22.9% compared with 2014. Last October, China's coal price soared. According to Mysteel data, the closing price of q5500 thermal coal in Qinhuangdao port increased by 208% in 2021. With the vigorous production of coal enterprises, the coal shortage has eased, but it is still insufficient. Recently, overseas coal prices jumped. On March 1, the spot price of Newcastle coal was 265.94 US dollars / ton, up 52% compared with January 3, which also put pressure on China's coal imports. Intelligent transformation of existing coal mines and new coal production capacity are two major means to expand coal supply.
"Three machines and one machine" is the core equipment of coal mine, accounting for 80% of fully mechanized mining equipment. The coal mine needs mining machinery for mining, support, transportation, washing and other production processes. The core is roadheader, shearer, scraper conveyor and hydraulic support, accounting for 12%, 13%, 10% and 45% of fully mechanized mining equipment respectively. At present, hydraulic support, roadheader and shearer are basically in an oligopoly pattern. Zhengzhou Coal Mining Machinery Group Co.Ltd(601717) , Sany international and Shanghai Chuangli Group Co.Ltd(603012) respectively occupy a high market share. Tiandi Science & Technology Co.Ltd(600582) has a layout in "three machines and one machine", and leading enterprises are expected to take the lead in enjoying the red profits of new production capacity.
The demand for renewal is the main support for the demand for coal machinery in recent years, and the new demand is expected to be released gradually. From the perspective of driving force, the growth of coal machinery equipment demand mainly comes from three parts: new demand, mechanization demand and renewal and replacement demand. Our calculation shows that the decline of fixed asset investment since 2014 has led to the decline of renewal and replacement demand in recent years. However, with the rise of fixed asset investment since then, it is expected that the renewal and replacement demand will gradually pick up from 2023 to 2024. Considering that there is still a gap between the supply and demand of 1.4 billion tons of coal, we are expected to increase the supply and demand of 500 million tons of coal. Overall, the market space of fully mechanized mining equipment is expected to be 245 billion yuan from 2022 to 2025, including 8.3 billion yuan for mechanization, 221.1 billion yuan for renewal and replacement, and 15.6 billion yuan for new demand.
The intelligent rate of China's coal mines is only about 10%, and the space is expected to reach 24.6-26.8 billion yuan by 2025. We have calculated the current level of coal mine intellectualization in China through two dimensions of production capacity and working face. The results show that 1) according to the production capacity, the permeability of intelligent coal mine will reach 18.9-28.3% by 2022, and 2) according to the number of working faces, the permeability of intelligent mining face is 8%, including 14% and 4.9% respectively. In terms of market scale, according to our industrial chain research, in addition to the purchase cost of original equipment, the cost of system and equipment upgrading and transformation is about 20-30 million yuan for each working face. Assuming that there are two working faces in each mine, the cost of single mine transformation is about 40-60 million yuan. We have calculated from the number of mines and working faces. It is estimated that the market scale of intelligent transformation of coal mines will be 24.6-26.8 billion yuan in 22-25 years.
Key recommendations: Zhengzhou Coal Mining Machinery Group Co.Ltd(601717) , Tiandi Science & Technology Co.Ltd(600582) , Sany international, Chongqing Mas Sci.& Tech.Co.Ltd(300275) , Hefei Gocom Information Technology Co.Ltd(688367) , Beijing Longruan Technologies Inc(688078)
Risk tip: policy risk, fluctuation risk of downstream industries, and the risk of intelligent promotion is less than expected.
