Power investment energy ( Huolinhe Opencut Coal Industry Corporation Limited Of Inner Mongolia(002128) )
Event: the company issued the annual report of 2021. In 2021, the company achieved an operating revenue of 24.65 billion yuan, a year-on-year increase of 22.8%; The net profit attributable to the parent company was 3.56 billion yuan, a year-on-year increase of 71.9%; The net profit after deduction of non return to parent was 3.52 billion yuan, a year-on-year increase of 77.9%. The basic earnings per share was 1.85 yuan / share, a year-on-year increase of 71.3%.
The cost rises and the growth rate of Q4 performance slows down. In 2021, Q4 achieved an operating revenue of 6.65 billion yuan in a single quarter, an increase of 22.8% year-on-year and 3.5% month on month; The net profit attributable to the parent company was 690 million yuan, a year-on-year increase of 5791.5% and a month on month decrease of 34.3%. Mainly due to the rise in the unit price of electrolytic aluminum raw materials and the year-on-year increase in labor costs, the company accrued 100 million yuan of asset impairment loss in a single quarter, eroding profits and reducing the month on month growth rate; In addition, Q4 company made provision for large impairment in 20 years (asset impairment loss of 260 million yuan and credit impairment loss of 330 million yuan), which led to the low net profit base of Q4 in 20 years, so the year-on-year growth rate increased significantly. Previously, the company released the announcement of main business data from January to February 2022. It is expected that from January to February 2022, the company will realize a net profit attributable to the parent company of about 1.03 billion yuan, with a year-on-year increase of about 80.2%. The performance is far higher than the market expectation and is optimistic about the annual performance growth.
Coal: the cost per ton of coal is superior to others. The company is the leader of lignite in eastern Mongolia and Northeast China. It has two ten million ton high-efficiency open-pit mines, and the cost per ton of coal is superior to others. Because the mining cost of the coal industry is mainly limited by resource endowment and cannot be copied by competitors, the company has the advantage of building a natural moat with extremely low mining cost. The company’s main customers are highly dependent on the company’s products, and the company has the advantage of transportation distance and regional barriers. Under the background of the intensification of the contradiction between supply and demand in Jilin and Liaoning, the company has benefited significantly.
Production and marketing: the output of raw coal will reach 45.98 million tons in 2021, a year-on-year decrease of 0.02%; The coal sales volume was 46.04 million tons, a year-on-year increase of 0.4%; Among them, the production and sales in the second half of the year were 22.67 million tons (year-on-year + 1.4%, month on month – 2.8%) and 22.65 million tons (year-on-year + 1%, month on month – 3.1%).
Selling price: the comprehensive selling price of commercial coal in 2021 is 162 yuan / ton (year-on-year + 13%); Among them, the selling price in the second half of the year was 167 yuan / ton (year-on-year + 23.5%, month on month + 5.2%).
Cost: in 2021, the cost per ton of coal was 85 yuan / ton, a year-on-year increase of 14.8%; The cost in the second half of the year was 92 yuan / ton (year-on-year + 16.1%, month on month + 17.6%).
Gross profit: in 2021, the gross profit per ton of coal was 77 yuan / ton, an increase of 11.1% year-on-year; Among them, the gross profit in the second half of the year was 74 yuan / ton (year-on-year + 34.1%, month on month – 6.9%).
Electrolytic aluminum: the price of aluminum is high, and the synergy promotes the release of performance. Huo meihongjun of the company has an electrolytic aluminum production line with an annual capacity of 860000 tons. At the same time, it has its own power plant, equipped with self provided thermal power units with an installed capacity of 1.8 million KW and 400000 kW wind power units, which can basically meet the power demand; Among them, the coal for thermal power is sold internally by the company, and the synergy benefit is remarkable. In the future, due to the tight global supply and demand pattern, the marginal improvement of China’s real estate and infrastructure, the demand for electrolytic aluminum is expected to improve, and the price is expected to remain high, which is conducive to the release of sector performance.
Production and marketing: in 2021, the company achieved an electrolytic aluminum output of 879000 tons, a year-on-year decrease of 3.8%; The sales volume of electrolytic aluminum reached 880000 tons, a year-on-year decrease of 3.5%; Among them, the production and sales in the second half of the year were 430000 tons (year-on-year – 4.4%, month on month – 2.5%) and 450000 tons (year-on-year – 2.1%, month on month + 0.7%).
Selling price: in 2021, the company’s comprehensive selling price of electrolytic aluminum was 16400 yuan / ton, up 33.5% year-on-year; Among them, the selling price in the second half of the year was 17300 yuan / ton (year-on-year + 31.9%, month on month + 15.0%).
Cost: in 2021, the company’s cost per ton of electrolytic aluminum was 12125 yuan / ton, a year-on-year increase of 22.8%; Among them, the cost per ton in the second half of the year was 13211 yuan / ton (year-on-year + 28.2%, month on month + 23.5%).
Gross profit: in 2021, the company’s gross profit per ton of electrolytic aluminum was 4275 yuan / ton, a year-on-year increase of 77.4%; Among them, the gross profit in the second half of the year was 4089 yuan / ton (year-on-year + 45.4%, month on month – 5.9%).
Electric power: the new of wind power and solar power has been continuously promoted, and the production and sales have increased rapidly. As of April 2022, the company has 1.6gw of green power in operation. In addition, the company still has 1675.3mw photovoltaic, 3065.5mw wind power and 626mw scenery projects under construction and planning, with a total installed capacity of 5366.8mw, an increase of 335.4%, and great growth potential. The company plans that by the end of the 14th five year plan, the installed capacity of new energy will reach more than 7000MW. It is expected that the proportion of new energy installed capacity of the company will continue to increase and the transformation and upgrading will continue to advance.
Production and marketing: in 2021, the company achieved power generation of 765623 million kwh, a year-on-year increase of 10.6%; The electricity sold was 688932 million kwh, a year-on-year increase of 10.6%; Among them, the power generation / sales in the second half of the year were 418641 (year-on-year + 1.6%, month on month + 20.7%) and 376827 million kWh (year-on-year + 1.4%, month on month + 20.7%).
Selling price: in 2021, the company’s on grid electricity price was 0.33 yuan / kWh, with a year-on-year increase of 5.5%; Among them, the on grid price in the second half of the year was 0.33 yuan / ton (year-on-year + 13.3%, month on month – 1.5%).
Cost: in 2021, the company’s electricity cost per kilowatt hour was 0.23 yuan / kWh, a year-on-year increase of 6.1%, of which the electricity cost in the second half of the year was 0.24 yuan / kWh (year-on-year + 11.9%, month on month + 12.9%).
Gross profit: in 2021, the company’s gross profit per kilowatt hour of electricity was 0.1 yuan / kWh, up 4.4% year-on-year, of which the gross profit of electricity in the second half of the year was 0.09 yuan / kWh (year-on-year + 17.2%, month on month – 27%).
Investment advice. The company is the leader of Mengdong lignite, with coal as the core, aluminum, electricity and new energy as the focus, and capital operation as the platform to build a comprehensive energy enterprise with core competitiveness. The company has made great efforts to develop new wind power, green power in operation of 1.6gw, construction in progress + planning of 5gw+, and new energy transformation is ready. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 5.81 billion yuan, 6.65 billion yuan and 6.98 billion yuan respectively, and the EPS will be 3.02 yuan, 3.46 yuan and 3.63 yuan respectively, with the corresponding PE of 6.22, 5.44 and 5.18, maintaining the “buy” rating.
Risk tip: the production of projects under construction is less than expected, the growth rate of electrolytic aluminum consumption is less than expected, and the coal price has fallen sharply.
