Yankuang energy ( Yanzhou Coal Mining Company Limited(600188) )
The company disclosed the annual report of 2021, and the table of operation is as follows:
In 2021, the company achieved an operating revenue of 151991 billion yuan, a year-on-year decrease of 29.3%, and the net profit attributable to shareholders of listed companies was 16.259 billion yuan, a year-on-year increase of 128.3%. After deduction, the net profit attributable to shareholders of listed companies was 16.212 billion yuan, a year-on-year increase of 148.09%. The net cash flow from operating activities was 36.182 billion yuan, an increase of 62.74% year-on-year. The basic earnings per share was 3.34 yuan, a year-on-year increase of 128.93%. The weighted average roe was 27.7% (a year-on-year increase of 18.32 PCT);
In the fourth quarter of 2021, the company achieved an operating revenue of 46.955 billion yuan, an increase of 18.41% month on month and a year-on-year decrease of 6.65%; The net profit attributable to shareholders of listed companies was 4.727 billion yuan, a decrease of 13.9% month on month and a year-on-year increase of 321585%; The net profit after non deduction was 4.453 billion yuan, a month on month decrease of 21.7% and a year-on-year increase of 52.57%. The decline in performance month on month is related to the habitual withdrawal of costs and expenses of coal enterprises in the fourth quarter.
The performance growth in 2021 is mainly due to the high price of coal and chemicals.
Coal business: in 2021, the company’s commercial coal output was 105025 million tons (- 12.68%), and the sales volume of commercial coal was 105645 million tons (- 27.76%). The sales volume of self-produced coal and trade coal decreased year-on-year, mainly due to the company’s stripping of trade coal business to improve asset quality, the sales volume of trade coal decreased by 23.03 million tons year-on-year, and the output of self-produced coal decreased year-on-year due to geological conditions and policy shutdown factors in the first half of the year, The annual sales volume of self-produced coal decreased by 18.944 million tons year-on-year. In the fourth quarter alone, the company’s commercial coal output was 27.254 million tons (- 8.42%), with a month on month increase of 1.69%, and the sales volume was 28.453 million tons (- 16.92%), with a month on month increase of + 17.79%. In terms of price, the sales price of commercial coal in 2021 was 793.2 yuan / ton, a year-on-year increase of 68.6%, of which the sales price of self-produced coal was 716.81 yuan / ton, a year-on-year increase of 70.9%. The rise of coal price has brought more profit income to the company. In 2021, the company’s coal business achieved sales revenue of 83.797 billion yuan (+ 20.66%) and gross profit of 36.771 billion yuan (+ 51.36%).
Coal chemical business: in 2021, the company’s output of chemical products was 5.794 million tons (+ 26.59%); The sales volume of chemical products is 5.246 million tons (+ 22.69%), the average price is 4080 yuan / ton (+ 65.9%), and the unit gross profit is 1306 yuan / ton (+ 355.1%). The increase in chemical products is mainly due to the completion and operation of Inner Mongolia Eerduosi Resources Co.Ltd(600295) energy and chemical phase II project in early 2021, and the increase in the output of methanol and ethylene glycol by 920000 tons in that year.
The company’s performance in the first quarter of 2022 is expected to rise sharply, and the profit growth is expected to continue
The company issued a pre increase announcement in March 2022: in the first quarter of 2022, the company expects to realize a net profit attributable to the parent company of about 6.6 billion yuan, a year-on-year increase of 4.349 billion yuan, an increase of 193.2%; It is expected to realize a net profit of 6.561 billion yuan, an increase of 4.343 billion yuan year-on-year, an increase of 195.81%. The company’s performance in the first quarter of 2022 was much better than that in the same period of last year, mainly due to the high overseas coal price caused by the international energy shortage. According to wind data, the average spot price of power coal in Newcastle port was 243.1 US dollars / ton from January 4 to March 25, 2022, 75% higher than the average price of 139 US dollars / ton in 2021. The high coal price has greatly improved the profitability of the company’s overseas coal mining business.
Recently, the average price of power coal in Newcastle port has peaked and dropped, but for China’s coal price, the upside down of import price still exists. According to wind data, as of March 25, 2022, we calculated the spot import price of coal in Newcastle port, and its import price is still higher than that of Qinhuangdao Power Coal, with a price difference of about 150 yuan / ton. Considering that the upside down situation of high calorie coal import price still exists, it is expected to support China’s price. The capacity utilization rate of the company’s 8 million ton yingpanhao mine and 8 million ton shilaosu mine in Inner Mongolia has a certain room for improvement. It is expected to further improve the company’s output in 2022. We expect the company to continue to maintain year-on-year profit growth.
In 2021, the company plans to pay a cash dividend of 2 yuan / share (including tax), far exceeding the commitment ratio of 0.5 yuan / share
According to the annual report of 2021, the company plans to distribute cash dividend of 1.6 yuan / share (including tax) and another 0.4 yuan / share (including tax), with a total of 2 yuan / share (including tax), which will be distributed after the deliberation of the general meeting of shareholders. On December 9, 2020, the company announced that the proportion of cash dividend in 20202024 will not be less than 0.5 yuan / share. The company’s cash dividend in 2021 is expected to far exceed the promised proportion. As of March 30, 2022, the total share capital of the company is about 4.949 billion shares, with a share price of 37.96 yuan. Based on this calculation, the dividend rate is 5.27%, and the amount of cash dividend is about 9.898 billion yuan, about 60.88% of the net profit attributable to the parent in 2021.
Profit forecast and Valuation: the company’s performance in the first quarter is good, and the coal industry continues to be in a high boom state. The company benefits from the rise of overseas and Chinese coal prices, and the company’s performance is expected to continue to rise in 2022. We raise the company’s profit forecast, and it is expected that the company’s net profit attributable to the parent company in 20222024 will be 25.57/267.3/28.12 billion yuan respectively (186.8/19.51 billion yuan in the previous 20222023), equivalent to EPS of 5.25/5.48/5.77 yuan / share respectively, The current share price of 38.34 yuan, corresponding to PE, is 7.2 / 6.9 / 6.6 times respectively, maintaining the company’s “buy” rating.
Risk tips: 1) risk of coal price falling more than expected; (2) Safety production risk; (3) Exchange gains and losses change risk.
