\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 088 China Shenhua Energy Company Limited(601088) )
Matters:
On March 25, 2022, the company released its annual report for 2021, which realized an operating revenue of 335216 billion yuan in 2021, a year-on-year increase of 43.7%; The net profit attributable to the shareholders of the company was 50.269 billion yuan, a year-on-year increase of 28.3%; The basic earnings per share is 2.53 yuan. It plans to distribute the final dividend of 2021 to all shareholders of RMB 25.4 per 10 shares (including tax).
Ping An View:
The quantity and price of coal rose simultaneously, and the amount of retained resources increased: in 2021, the company made every effort to stabilize the production and price, stabilize the expectation, and ensure the increase of coal production and supply. The coal output was 310 million tons, an increase of 5.3%, and the coal sales volume was 480 million tons, an increase of 8.0%; In terms of coal price, the average sales price is 588 yuan / ton (excluding tax), an increase of 178 yuan / ton over 2020. The operating income of coal business was 292.66 billion yuan, a year-on-year increase of 54.0%, and the operating income was 57.38 billion yuan, a significant year-on-year increase of 73.6%. In terms of resources, seize the opportunity to achieve a major breakthrough in resource continuity, obtain the exploration certificate of Taigemiao south area of Xinjie, and realize the company’s right to high-quality resources in Xinjie mining area; The company has 33.21 billion tons of coal resources, an increase of 3.53 billion tons over the end of 2020, mainly because the south area of Taigemiao, Xinjie street has obtained the permit for detailed investigation and exploration of coal resources.
Power supply was fully guaranteed, and the operating income decreased: in 2021, the company ensured the safety and stability of power supply. Accelerate the construction and operation of new units with large capacity, high parameters and ultra-low emissions, and further optimize the layout of power business. The operating income of power business was 64.12 billion yuan, an increase of 29.6% year-on-year. Due to the high coal price, the operating income was 3.01 billion yuan, a sharp decrease of 62.3% year-on-year. Beijing Guoneng new energy industry investment fund and Beijing Guoneng green and low-carbon development investment fund, which the company participated in the establishment, have successively invested in wind power and photovoltaic projects in Shanxi, Jiangsu and Zhejiang, two lakes and other places.
The transportation sector of the company achieved growth: the annual self owned railway transportation turnover was 303.4 billion ton kilometers, with a year-on-year increase of 6.2%. Huang Da railway has a transportation capacity of more than 15 million tons, and the annual coal transportation volume is 11.1 million tons. Throughout the year, the cumulative coal loading volume of Huanghua port and Shenhua Tianjin Coal Terminal was 261 million tons, a year-on-year increase of 4.9%. The annual shipping freight volume was 121 million tons, a year-on-year increase of 7.3%; The shipping turnover was 112.1 billion tons nautical miles, a year-on-year increase of 20.5%.
The performance of coal chemical industry is improved by the international oil price: the company’s coal chemical business is the coal to olefin phase I project of Baotou coal chemical industry. In 2021, the continuous rise of international oil price has driven the price of polyolefin products in China to fluctuate upward, and the operating income of coal chemical industry division reached 720 million yuan, a year-on-year increase of 176.6%. The environmental impact report of Baotou coal to olefin upgrading demonstration project has been approved by the Ministry of ecology and environment, and other preliminary work is being carried out in an orderly manner.
100% of the company’s dividend is returned to shareholders: the company plans to distribute 25.4 yuan (including tax) for every 10 shares, with a dividend ratio of 100.4%; The dividend yield calculated according to the market value on March 28 was 8.7%. The company’s coal circuit, port and shipping integration will bring stable income, and the company’s future dividend is expected to maintain a high level.
Profit forecast and Valuation: Based on the high energy prices outside China in 2022 and the company’s recent operation, we raised our performance forecast. It is estimated that the company’s revenue in 202224 will be 359.42 billion yuan, 383.48 billion yuan and 406.65 billion yuan respectively (the original value in 202223 will be 266.65 billion yuan and 269.03 billion yuan), and the net profit will be 54.33 billion yuan, 55.67 billion yuan and 56.72 billion yuan respectively (the original value in 202223 will be 48.12 billion yuan and 48.94 billion yuan), PE corresponding to the current share price is 10.7 times, 10.4 times and 10.2 times respectively, maintaining the “recommended” rating.
Risk tips: 1. The new production capacity has increased significantly, coal supply exceeds demand, and the decline of coal price affects the company’s performance; 2. Carbon neutralization constraints and rapid development of new energy affect coal demand; 3. Covid-19 epidemic control was less than expected, affecting China’s coal and power demand; 4. If a coal mine safety accident occurs, it may affect the relevant business of the company.
