The market in the first quarter ended a few days ago, and the three major indexes all closed at the negative line. The Shanghai index fell by 10.65%, the Shenzhen composite index fell by 18.44% and the gem index fell by 19.96%. In the continuous decline, the coal sector stands out. In the Shenwan industry index, the coal industry is far ahead of other industries with an increase of 22.63%. Why is the coal sector still so strong when the national development and Reform Commission has repeatedly issued documents to ensure supply and stabilize the price of the coal market and dealt with the chaos of the coal market?
looks bad, but it’s good
Previously, the national development and Reform Commission informed that it was required to further improve the coal market price formation mechanism, making it clear that the medium and long-term transaction price of underground coal (5500 kcal) in Qinhuangdao port is 570770 yuan per ton (including tax), which is reasonable. Taking into account reasonable circulation expenses, production costs and other factors, it should clarify the reasonable range of medium and long-term transaction price in the mining link of key coal transfer out areas (Shanxi, Shaanxi and Inner Mongolia).
When the news was just released, the main force of Zheng coal futures fell 9.17% on the same day. Most market participants only focused on the maximum price of 770 yuan / ton of coal, believing that coal lost its price elasticity and the opportunity to soar and get rich. But then more and more investors focused on the minimum price of 570 yuan / ton: under the background of “double carbon”, the main energy in the future will be clean energy, and the track situation of wind power and photovoltaic will be very good. On the contrary, coal will be phased out and ignored, and the coal resources of coal enterprises have been greatly underestimated. At this time, the document of the national development and Reform Commission undoubtedly defined the lower limit of valuation for the coal mines of coal enterprises, and gave a dose of reassurance to the coal stocks. In response to the market, the trend of coal stocks began to be significantly stronger than that of power coal futures.
steady growth scenario, the coal bull may continue
This year’s government work report gives the expected target of China’s economic development in 2022, in which the GDP growth target is set at about 5.5%. Economic development is inseparable from the growth of energy consumption. Once the steady growth policy is launched, it will form a strong demand support for upstream bulk commodities, especially energy bulk commodities and some cyclical products, which will benefit coal enterprises in the short term.
Changjiang Securities Company Limited(000783) analysts believe that due to the rampant inflation, the high price of downstream products has become an important reason to support the central increase of current coal price: according to the calculation, the upper limit of coal price (tax included) corresponding to the current price of thermal power, urea, electrolytic aluminum and cement is about 9001700 yuan / ton (tax included), while the upper limit of coking coal price acceptable for crude steel is about 3500 yuan / ton (tax included). When China focuses on steady growth, the traditional industries represented by the secondary industry may still become the main focus, which is expected to drive the synchronous positive growth of coal consumption.
some star fund managers increase their positions in coal
Since the fourth quarter of last year, some star fund managers began to transfer their positions to coal. Ruiheng of e-fonda Xiao Nan flexibly configured a large-scale increase in positions China Shenhua Energy Company Limited(601088) , becoming its top ten new heavy positions. He believes that a possible and reasonable accident caused by this round of new energy revolution is that traditional energy is becoming more and more valuable – with the promotion of new energy, the supply of traditional energy is becoming more and more tense. In recent years, the capital expenditure of some traditional industries has gradually decreased and the supply tends to shrink. Under this background, the continuous growth of demand in these industries in the end is expected to bring better investment opportunities.
In addition, Qiu Dongrong of Zhonggeng fund is also optimistic about the opportunities of the coal industry, and Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) is the number one heavy position stock of Geng small cap value stocks. He wrote in the fund’s annual report: there is a good investment value of high-quality assets in the stock of energy and resources. The logic mainly lies in: (1) the policy will continue to correct the deviation, and realize that in the process of pursuing the steady growth of the economy as a whole, that is, pursuing the growth of energy and resources and the slow decline of the economy, Demand is still long-term and growing. (2) From serious surplus to supply side reform, the market clearing situation is good, but the long-term capital expenditure of many commodities outside China is insufficient, the supply contraction is serious, the supply elasticity is insufficient, and the supply recovery is not overnight. The real and effective supply growth is often reflected in the upward price center caused by shortage. (3) In the medium and long term, under the influence of environmental protection and carbon neutralization factors, the medium-term supply constraints and marginal costs will rise, the commodity price center will inevitably rise, and new applications will continue to expand, resulting in a significant increase in the value of stock assets. From the perspective of market pricing and valuation, such companies are regarded as cyclical assets with extremely low valuation, good cash flow, less capital expenditure, high dividend yield and high expected return corresponding to current price.
