Report view: leading dividends hit a new high, and the valuation of the sector needs to be repaired.
Core logic: driven by the production capacity cycle, the high outlook of the coal industry continues. In 2016, the supply side overcapacity fell beyond the expected target. The national development and Reform Commission calls for accelerating the development and expansion of new driving forces, cultivating and developing high-quality and advanced production capacity, but it is far from being thirsty. Judging from the construction period of 3-5 years, the overall scale of coal production capacity that can be truly released in the future is relatively limited. During the 14th Five Year Plan period, with the growth of the national economy, the energy demand of the whole society is expected to maintain a growth trend, the bottom-up guarantee role of coal in the energy system may be more prominent, the absolute consumption of coal will increase steadily, and the coal industry is still in a high boom development stage.
Points beyond expectations: 1) difficulty in increasing production and ensuring supply exceeds expectations: the space for capacity re combing and re mining in 2022 is limited, and it is difficult to increase another 300 million tons of capacity. On March 18, 2022, the national development and Reform Commission issued the notice on establishing a special class to promote the work related to increasing coal production and ensuring supply, indicating that the urgency and difficulty of increasing production and ensuring supply may be more severe than expected. 2) Demand growth toughness exceeded expectations: the downstream data of coal from January to February 2022 seemed to perform poorly, but considering the high growth in the same period last year, the actual performance this year was acceptable, and the demand growth toughness was still very strong. With the continuous development of the national “steady growth” measures, the operating rate of downstream enterprises has increased steadily, which is expected to drive the higher than expected growth of downstream coal demand.
3) large factories raise the price of purchased coal, and the price limit space is opened, which is higher than expected: China Shenhua Energy Company Limited(601088) 2022 the price of 5500 kcal coal purchased from January 15 to February 11 is not less than 900 yuan, indicating that “the pit mouth is not more than 700 yuan / ton, and the port is not more than 900 yuan / ton”. The influence of the price limit order is weakened, and the upward space of spot price is opened. Under the tight situation of supply and demand, it is expected that the coal price is easy to rise but difficult to fall. 4) The Russian Ukrainian crisis catalyzed the global energy crisis, and overseas coal prices soared higher than expected: the spot price index of the three major international power coal rose sharply, superimposed with the uncertain prospect of the liberalization of imported coal from Australia and the export obstruction caused by the need for Indonesian coal mines to fulfill DMO, the supplementary effect of imported coal on the supply of China’s market was limited, and the coal import situation was tight. High overseas coal prices and the transfer of imports to domestic trade may exacerbate the tension in coastal coal supply.
Investment suggestion: the leading dividend reached a new high, and the valuation of the sector needs to be repaired. This week China Shenhua Energy Company Limited(601088) announced the 2021 annual report that it plans to “pay 25.4 yuan to all shareholders” and distribute 50.466 billion yuan of cash dividend, accounting for 100.4% of the net profit attributable to the company’s shareholders under the Chinese accounting standards for business enterprises in 2021. The scale of cash dividend reached a new high. As of March 25, Shenwan’s coal price to book ratio Pb (LF, mainland) was only 1.61 times, and the valuation quantile was 34.83, which was still at a historically low level. Leading companies have a high proportion of dividends, boosting market sentiment, which is expected to accelerate the valuation repair of the sector and continue to be optimistic about the future market. It is suggested to focus on the target: power coal company Shaanxi Coal Industry Company Limited(601225) , Shanxi Coal International Energy Group Co.Ltd(600546) , Yankuang energy, China Shenhua Energy Company Limited(601088) ; Coking coal company Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Huaibei Mining Holdings Co.Ltd(600985) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Guizhou Panjiang Refined Coal Co.Ltd(600395) .
Coal price: in the short term, long and short factors are intertwined, and the port coal price is relatively stable.
In terms of thermal coal, negative factors: first, the policy of increasing supply and stabilizing price has a clear guidance to suppress the rising sentiment of coal price; 2、 With the advent of the off-season, the power load is down, and the superposition of epidemic outbreaks in many places suppresses the demand for industrial power. Positive factors: first, the epidemic prevention and control situation in the origin and port is tightening, and the outward transportation of goods is facing a bottleneck; 2、 The port inventory is low, and the function of reservoir is difficult to be effective; 3、 The international coal price is still high, which forms a strong support for China’s coal price. In terms of coking coal, the price increase of downstream coking has been implemented, and the blast furnace of steel plant has gradually resumed production. The just need to rise has driven the demand for replenishment of steel plant. However, due to the recent repeated epidemic, the wait-and-see mood has increased significantly, which has formed a certain restriction on coke. At present, the profits of steel enterprises are meager, and the profits of coke enterprises are further squeezed by high price coal. Therefore, the rise of coal prices is weak in the short term. China’s coking coal prices are mainly stable, but some resources are still tight and structural contradictions are prominent.
High frequency data tracking
The port price of thermal coal remained basically stable; Coking coal port was flat and pit mouth fluctuated slightly. As of March 23, the comprehensive average price index: Bohai Rim thermal coal (q5500k) closed at 738.0 yuan / ton, unchanged on a week-on-week basis; As of March 25, the comprehensive trading price: cctd Qinhuangdao thermal coal (q5500) closed at 786.0 yuan / ton, unchanged on a week on week basis. As of March 25, the closing price of Shanxi production of Qinhuangdao port power end coal (q5500) was 1575.0 yuan / ton, up 55.0 yuan / ton (+ 3.6%) on a weekly basis Guangzhou Port Company Limited(601228) Indonesian coal (q5500) warehouse raised the price by 1542.0 yuan / ton, with a decrease of 7.0 yuan / ton (- 0.5%) on a weekly basis Guangzhou Port Company Limited(601228) Australian coal (q5500) warehouse raised the price by 1547.0 yuan / ton, down 7.0 yuan / ton (- 0.5%) on a weekly basis. In terms of coking coal, as of March 25, the price (including tax) of the main coking coal warehouse produced in Shanxi of Jingtang Port was raised by 3350.0 yuan / ton, unchanged on a weekly basis Jiangsu Lianyungang Port Co.Ltd(601008) Shanxi’s main coking coal closing price (tax included) was 3789.0 yuan / ton, unchanged on a weekly basis; The average price of Shanxi main coking coal was 2673.0 yuan / ton, up 4.0 yuan / ton (+ 0.1%) on a weekly basis; The sector price of Shanxi Luliang 1 / 3 coke car was 2550.0 yuan / ton, down 50.0 yuan / ton (- 1.9%) on a weekly basis.
Both port and terminal inventories fell. As of March 24, the total storage of power coal in the eight coastal provinces was 26.441 million tons, with a decrease of 453000 tons (- 1.7%) on a weekly basis. As of March 25, the coal inventory of Qinhuangdao port was 5.05 million tons, with a decrease of 90000 tons (- 1.8%) on a weekly basis; Coking coal storage in the six major ports was 2.05 million tons, down 310000 tons (- 13.1%) on a weekly basis; The total coking coal inventory of China’s independent coking plants (100) was 11.51 million tons, down 24000 tons (- 0.2%) on a weekly basis. The number of railway vehicles arriving at Qinhuangdao Port decreased and the port throughput increased; Coal shipping charges rose and fell. As of March 25, the arrival volume of Qinhuangdao port railway was 6243.0 vehicles, with a decrease of 162.0 vehicles (- 2.5%) on a weekly basis; The port throughput of Qinhuangdao port was 531000 tons, an increase of 27000 tons (+ 5.4%) on a weekly basis. As of March 25, the ocfi of Qinhuangdao Shanghai (4 Tianma Microelectronics Co.Ltd(000050) 000 DWT) Maritime coal freight index was 40.6 yuan / ton, up 2.0 yuan / ton (+ 5.2%) on a weekly basis; Qinhuangdao Guangzhou (5 Shenzhen Zhongjin Lingnan Nonfemet Co.Ltd(000060) 000 DWT) Maritime coal freight rate index ocfi59 1 yuan / ton, down 5.9 yuan / ton (- 9.1%) on a weekly basis. Downstream performance: coke prices are flat, steel prices rise, blast furnace operating rate falls, methanol prices rise and cement prices fall. As of March 25, Rizhao Port Co.Ltd(600017) quasi primary metallurgical coke closing price (tax included) was 3610.0 yuan / ton, unchanged on a weekly basis; Shanghai rebar price (hrb40020mm) was 4980.0 yuan / ton, up 30.0 yuan / ton (+ 0.6%) on a weekly basis; The national blast furnace operating rate (247) was 78.2%, down 0.7% on a weekly basis; Methanol price index was 2982.0, up 137.0 (+ 4.8%) on a weekly basis; The national cement price index was 172.1, down 0.8 (- 0.4%) on a weekly basis.
Risk tips
Policy price limit risk; Coal import volume; The macro economy has fallen sharply.
