\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 001 Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) )
Event: on April 8, 2022, the company issued an announcement on the pre increase of performance in the first quarter of 2022. The company expects the net profit attributable to the shareholders of the listed company to be about 900 million yuan in the first quarter of 2022, an increase of 395 million yuan compared with the same period of last year, an increase of about 78.22% year-on-year.
The performance increased by 78% year-on-year, but slightly lower than our expectation. According to the announcement, the company’s performance growth is mainly due to the increase of China’s coal market price in the first quarter of 2022 and the year-on-year increase of the company’s coal business income. However, from a month on month perspective, wind data shows that the average price of Qinhuangdao thermal coal in January and February 2022 is lower than that in the fourth quarter of 2021. Therefore, the company’s 22q1 profit has declined compared with 21q4 profit.
The adjustment of sales structure is conducive to the release of price elasticity. In 2022, the benchmark price of power coal long-term association was increased from 535 yuan / ton to 675 yuan / ton, with a year-on-year increase of 26%. With the improvement of the center of long-term association, the price of long-term association coal of the company is also expected to rise. In addition, on the basis of ensuring the contract fulfillment rate of power long-term association users, the company further tilts the market structure of power coal to building materials users, and tries to sell high calorific value coal to the market or cement and trade users with long-term association plans. The price transmission of cement and trading users is relatively smooth, and they are less disturbed by the policy side. The price elasticity is higher than that of the electricity and coal long-term association. In the cycle of rising coal prices, the company’s price elasticity may be expected to release, which will drive the release of the company’s performance.
Jinneng coal group, the controlling shareholder of the company, has strong overall resource reserves and the possibility of asset injection.
In February 2021, Shanxi Guoyun held a signing meeting for the assessment of “one enterprise and one policy” of provincial enterprises, It is proposed that the asset securitization rate of provincial enterprises reaches more than 80%. Jinneng holding group gathers the high-quality coal resources of the original three major coal enterprises in Shanxi. At present, it involves a total coal production capacity of about 404 million tons / year. It is the first coal enterprise in the province and the second largest coal enterprise in China with strong strength. As its only coal listing platform, the company has a clear positioning for coal resource integration. The coal production capacity of listed companies is only 48.1 million tons / year (including Tongxin mine) , by the end of the third quarter of 2021, the asset securitization rate of controlling shareholders was only about 24%. Under the background of major shareholders improving their asset securitization rate, the company has broad space for asset injection.
Investment suggestion: the company is the leader of power coal in Shanxi Province, with rich coal resources and excellent resource endowment.
The company is located at the starting point of Daqin line with convenient transportation. Meanwhile, the reform of state-owned enterprises in Shanxi province continues to advance, the controlling shareholders have the demand to improve the asset securitization rate, and the asset injection is expected to start. Adjust the profit forecast according to the performance forecast. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 4.658 billion yuan, 5.998 billion yuan and 6.274 billion yuan, corresponding to EPS of 2.78/3.58/3.75 yuan / share and PE of 6 times, 4 times and 4 times respectively (based on the stock price on April 8, 2022). The valuation in the industry is low. Maintain a “recommended” rating.
Risk tip: coal prices fell sharply, the reform of state-owned enterprises in Shanxi was less than expected, and the group’s asset injection was less than expected.
