\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 666 Pingdingshan Tianan Coal Mining Co.Ltd(601666) )
The company disclosed the annual report of 2021, and the operation is as follows:
In 2021, the company achieved an operating revenue of 29.699 billion yuan, a year-on-year increase of 32.6%, and the net profit attributable to shareholders of listed companies was 2.922 billion yuan, a year-on-year increase of 110.61%. After deduction, the net profit attributable to shareholders of listed companies was 2.92 billion yuan, a year-on-year increase of 100.14%. The net cash flow from operating activities was 8.437 billion yuan, a year-on-year increase of 222.79%. The basic earnings per share was 1.2632 yuan, a year-on-year increase of 108.93%. The weighted average roe was 17.09% (a year-on-year increase of 7.92 PCT).
In the fourth quarter of 2021, the company achieved an operating revenue of 10.126 billion yuan, an increase of 46.28% month on month and 82.16% year on year; The net profit attributable to listed shareholders was 236.4 billion yuan, an increase of 1.54% over the same period last year; The net profit after non deduction was 1.17 billion yuan, an increase of 65.5% month on month and 170.27% year-on-year.
The clean coal strategy continued to advance, and the production and sales of clean coal continued to rise. The company continued to promote the clean coal strategy. Due to safety supervision and other factors, the total production and sales decreased slightly, while the proportion of self-produced coal sales and the production and sales of clean coal continued to increase. In 2021, the company achieved 28.85 million tons of raw coal, a year-on-year decrease of 6.39% (or -1968300 tons); The sales volume of commercial coal was 306507 million tons, with a year-on-year decrease of 2.74% (or -865100 tons), of which the sales volume of self owned commercial coal was 265925 million tons, with a year-on-year decrease of 4.54% (or -1266000 tons), accounting for 92.17%, with a year-on-year increase of 2.22 PCT, realizing the output of refined smelting coal of 11.88 million tons, with a year-on-year increase of 3.2%, and the sales volume of 11.99 million tons, with a year-on-year increase of 2.5%; The sales revenue of coal reached 28.076 billion yuan, a year-on-year increase of 33.14%; The sales cost was 19.515 billion yuan, a year-on-year increase of 29.8%; The gross profit of coal sales was 8.561 billion yuan, with a year-on-year increase of 41.45%. Clean coal is the main source of income and profit, contributing 68% of sales revenue and 85% of gross profit, accounting for a continuous increase. In the fourth quarter, the company achieved a raw coal output of 7.14 million tons, a year-on-year decrease of 10.13% and a month on month increase of 4.19%; The sales volume of commercial coal was 7.7 million tons, a year-on-year decrease of 24.9% and a month on month increase of 6.25%, of which the sales volume of self owned commercial coal was 6.6537 million tons, a year-on-year decrease of 25.51% and a month on month increase of 8.02%; The sales revenue reached 9.509 billion yuan, a year-on-year increase of 81.0%; The sales cost was 6.398 billion yuan, a year-on-year increase of 91.28%; The gross profit of coal sales was 3.111 billion yuan, a year-on-year increase of 62.97%.
Clean coal prices remain high and the performance in the first quarter is expected. According to the announcement of the company, the average selling price in 2021 was 916 yuan / ton (year-on-year + 36.9%), the average selling price in the fourth quarter alone was 1235 yuan / ton, an increase of 322 yuan / ton (or + 35.32%) compared with the third quarter, the average price in the first three quarters was 809 yuan / ton, and the price in the fourth quarter alone increased by 426 yuan / ton (or + 50.66%) compared with the first three quarters. Among them, the average selling price of refined coal in 2021 was 1596 yuan / ton, a year-on-year increase of 36%, and the unit cost was 1032 yuan / ton, a year-on-year increase of 40%. After the price of the company’s main coking coal long-term association was raised to 2960 yuan / ton in the fourth quarter, so far, the annual average price in 2021 was 1945 yuan / ton, while as of March 28 this year, the price was stable at 2960 yuan / ton, a sharp increase of 52% compared with the average price last year, and the performance in the first quarter of 2022 is expected. In terms of cost, the average sales cost in 2021 was 637 yuan / ton (+ 33.47%), and the average cost in the fourth quarter alone was 831 yuan / ton, an increase of 198 yuan / ton (or + 31.3%) compared with the third quarter. The annual cost increase was mainly due to the increase of mine mining depth, complex mining conditions, the company’s increase in safety investment, and the company’s increase in employee compensation. From the perspective of gross profit, the gross profit in the fourth quarter reached 3.111 billion yuan (5.451 billion yuan in the first three quarters), and the average gross profit per ton of coal in the fourth quarter reached 404 yuan / ton, up 124 yuan / ton (or + 44.4%) month on month. After the price increase, the gross profit margin in the fourth quarter further increased to 33%.
Maintain a high proportion of dividends, reduce staff and increase efficiency. At the same time, the company issued a dividend plan to distribute cash dividends of 7.6 yuan (including tax) to all shareholders for every 10 shares, with a total dividend of 1.76 billion yuan, accounting for 60.21% of the net profit available for distribution. Based on the closing price on March 28, 2022, the dividend rate is as high as 5.1%. In addition, the company continued to reduce staff and increase efficiency. By the end of 2021, the number of on-the-job employees of the company had totaled 65281, a decrease of 8985 compared with 2020, and a significant reduction of more than 20000 for two consecutive years. In recent years, the company has vigorously promoted the “diversion of human resources to less than 80000 posts” and vigorously promoted the “intelligent management system” of coal mines in recent years, so as to greatly promote the transfer of human resources per capita to less than 50000 posts, so as to actively promote the “intelligent management system” of coal mines.
Establish a coke company through joint venture to realize the integration of industrial chain. The company announced the establishment of Henan Pingmei Shenma Rufeng carbon material Co., Ltd. jointly invested with Rufeng coking. The company invested 700 million yuan and held 70% of the shares. The new company used the Shanghai Pudong Development Bank Co.Ltd(600000) tons of coke production capacity index shut down by the original Henan Pingmei Shenma Chaochuan Chemical Technology Co., Ltd. and the 700000 tons of coke production capacity index shut down by Rufeng coking Institute to reduce energy and replace the construction of 1.2 million tons of coking projects with supporting construction of related chemical products and deep processing projects. The coking capacity index refers to the market transaction price and is determined by both parties through negotiation. The new company will purchase it at the price of 200 yuan / ton. After the project is completed and put into operation, the annual coke production capacity is 1.2 million tons, and the annual operating income is 269647 million yuan. It is estimated that the total annual profit is 2446615 million yuan, the total return on investment is 13.69%, the total investment payback period (before tax) is 7.1 years, and the sales profit rate is 9.17%, which is higher than the benchmark return rate of coking industry by 7%. After the completion of the new company, the company will realize the integration of coking coal coke industrial chain and further improve the added value of products.
The supply and demand of the industry continued to be tight, and the price rose strongly. At present, there is a serious shortage of coal outside China, and the price of coking coal has risen sharply. As of March 28, 2022, the price of Jingtang Port’s main coking coal depot has increased by 3350 yuan / ton, up 33.18% from the average price in 2021 (251544 yuan / ton); Overseas coal prices continued to set new record highs. As of March 25, 2022, Fengjing hard coking coal was $565 / ton, up 128% from the average price of 2021 (248 yuan / ton). At the beginning of March, it was close to $700 / ton, constantly setting new record highs. The overall supply and demand pattern of the industry is tight, and the downstream demand margin shows signs of improvement. The industry is expected to maintain a high outlook. As the largest main coking coal supplier of a shares, the company will significantly benefit from the high prosperity of the industry.
Profit forecast and Valuation: the price of coking coal rebounded to a relatively high level after a sharp correction in the fourth quarter of last year. Based on the adjustment of industry supply and demand and price expectation, we predict that the net profit attributable to the parent company in 20222024 will be 6.49/68.7/7.27 billion yuan respectively (8.0/8.31 billion yuan in the previous 20222023), with a year-on-year increase of + 122%, + 6% and + 6%, equivalent to EPS of 2.76/2.92/3.09 yuan / share respectively, The current share price is 14.92 yuan, corresponding to 5.4 / 5.1 / 4.8 times of PE respectively, maintaining the “buy” rating of the company.
Risk tip: the downward risk of coal price. According to the calculation, if other factors remain unchanged, if the price of clean coal decreases by 50 yuan / ton in 2022, the net profit attributable to the parent company will decrease by 365 / 3.87/411 million yuan in 2022 / 23 / 24 respectively; Safety production risk.
