Yankuang energy ( Yanzhou Coal Mining Company Limited(600188) )
Event: on March 30, 2022, the company released its annual report for 2021. The company achieved an operating revenue of 151991 billion yuan in 2021, a year-on-year decrease of 29.30%; The net profit attributable to shareholders of listed companies was 16.259 billion yuan, a year-on-year increase of 128.30%.
Impairment affects the release of 21q4 performance. In the fourth quarter of 2021, the company realized a net profit attributable to the shareholders of the parent company of RMB 4.727 billion, with a year-on-year increase of 321585% and a month on month decrease of 13.89%. The decrease in performance was mainly due to the provision of asset impairment loss of RMB 1.18 billion and credit impairment loss of RMB 514 million in the fourth quarter, which affected the release of the company’s performance in the fourth quarter.
Special dividend with a dividend yield of 5.27%. According to the announcement, the company plans to distribute a cash dividend of 1.60 yuan / share (including tax) and a special cash dividend of 0.40 yuan / share (including tax) to all shareholders in 2021, with a total cash dividend of 2.00 yuan / share (including tax). It is expected to distribute a total of about 9.897 billion yuan (including tax), accounting for 60.87% of the company’s net profit attributable to the parent company in 2021. Calculated by the closing price on March 30, 2022, the dividend rate is 5.27%.
Coal prices rose sharply and the gross profit margin of coal business rose. In 2021, the company produced 105025 million tons of commercial coal, a year-on-year decrease of 12.68%; 105645 million tons of coal were sold, a year-on-year decrease of 28.43%. In terms of price, the comprehensive selling price of commercial coal was 793.19 yuan / ton, a year-on-year increase of 68.6%. According to the annual report, in 2021, the cost of self-produced coal per ton was 332.37 yuan / ton, a year-on-year increase of 50%, the average cost of trade coal was 133935 yuan / ton, a year-on-year increase of 125.83%, and the comprehensive cost of commercial coal was 445.13 yuan / ton, a year-on-year increase of 43.88%. In 2021, the coal business achieved a comprehensive gross profit margin of 20.66%, an increase of 8.9 percentage points year-on-year. In 2022, the company will speed up the handling of mine procedures such as yingpanhao and Jinjitan, and release the advantageous advanced production capacity. We expect the output to rise.
The price of chemical products rose, and the profitability improved significantly. In terms of coal chemical business, the company’s total output of chemical products was 5.794 million tons, a year-on-year increase of 26.59%. Among them, the output of methanol was 2.503 million tons, a year-on-year increase of 37.3%, the average selling price of methanol was 1819.8 yuan / ton, a year-on-year increase of 39.4%, and the average cost was 143148 yuan / ton, a year-on-year increase of 30.9%. The sales volume of acetic acid was 757000 tons, a year-on-year decrease of 0.26%, the average selling price was 564729 yuan / ton, a year-on-year increase of 152.76%, and the sales cost was 255482 yuan / ton, a year-on-year increase of 42.48%; The sales volume of ethyl acetate was 402000 tons, with a year-on-year increase of 7.54%, and the average selling price was 767662 yuan / ton, with a year-on-year increase of 52.28%; The sales cost was 577114 yuan / ton, with a year-on-year increase of 22.48%; In 2021, the sales volume of the company’s liquid crude wax was 445000 tons, with a year-on-year increase of 7.56%, the average selling price was 489213 yuan / ton, with a year-on-year increase of 46%, and the average selling cost was 3564 yuan / ton, with a year-on-year increase of 14.81%. The sales volume of ethylene glycol of the company is 295000 tons, the sales price is 417288 yuan / ton, and the sales cost is 274915 yuan / ton. In 2021, the company’s chemical business achieved a gross profit margin of 32.01%, an increase of 20.34 percentage points year-on-year.
Overseas coal prices continued to rise, and the Australian division is expected to contribute to the performance increment. Since 2022, affected by the recovery of overseas demand, the conflict between Russia and Ukraine and other factors, overseas energy prices have continued to grow. According to wind data, as of March 29, 2022, the average price of power coal in Newcastle and the average price of coking coal in Fengjing mine in Australia have increased by 168.18% and 252.22% respectively year-on-year. The continuous rise in Australian coal prices is expected to drive the performance release of Yanmei Australia and Yanmei Australia. In addition, also affected by the energy shortage, the crude oil price remained high, which helped to increase the price of the company’s chemicals and improve the profitability of the company’s chemical business.
The performance in the first quarter slightly exceeded our expectations: the company released the performance forecast for the first quarter of 2022. It is expected that the net profit attributable to the parent company will be about 6.6 billion yuan in the first quarter of 2022, with a year-on-year increase of 4.349 billion yuan or 193.20%.
Investment suggestion: according to the annual report and the current trend of coal price, the profit forecast is raised. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 25.992 billion yuan, 26.971 billion yuan and 27.584 billion yuan, with corresponding EPS of 5.25/5.45/5.57 yuan / share respectively. The PE corresponding to the share price on March 30, 2022 is 7 times, maintaining the “recommended” rating.
Risk tips: 1) macroeconomic growth slows down and coal prices fall sharply; 2) The price of chemicals fell sharply; 3) The transformation and development is slower than expected.
