\u3000\u30 China Baoan Group Co.Ltd(000009) 83 Shanxi Coking Coal Energy Group Co.Ltd(000983) )
Event: the company issued 2021 annual performance Express & 2022 Q1 performance forecast. In 2021, the company achieved an operating revenue of 45.29 billion yuan, a year-on-year increase of 34.2%; The net profit attributable to the parent company was 4.17 billion yuan, a year-on-year increase of 112.9%; The net profit deducted from non parent company was RMB 4.061 billion, with a year-on-year increase of 143.5%. The company expects to realize a net profit attributable to the parent company of RMB 2.32 billion ~ 2.59 billion in Q1, with a year-on-year increase of 155% ~ 185%.
Q1 performance in 22 years increased significantly month on month, reaching a record high. In the fourth quarter of 2021, the operating revenue reached 15.59 billion yuan, an increase of 30% year-on-year and 49% month on month; In the fourth quarter, the net profit attributable to the parent company was 990 million yuan, a year-on-year increase of 179.6% and a month on month decrease of 19.4%; The main reason is that the company’s coal sales increased slightly (in 2021, the output of raw coal was 35.69 million tons, with a year-on-year increase of 0.7%; the sales of commercial coal was 28.71 million tons, with a year-on-year increase of 1.2%). The rise of coal sales price promoted the rapid growth of revenue; However, the cost of fuel coal and raw coal in the power and coking sectors increased, the loss increased, and the growth rate of net profit attributable to the parent slowed down month on month. The company expects to realize a net profit attributable to the parent company of RMB 2.32 billion ~ 2.59 billion in Q1 in 2022, with a year-on-year increase of 155% ~ 185% and a month-on-month increase of 133.9% ~ 161.4%, a record single quarter high.
The supply and demand of coking coal increases, and the price still has room to rise. Since this year, there has been no fundamental change in the supply of coking coal. The supply and demand of skeleton coal such as main coking coal and fat coal is relatively tight, and the overall inventory is at the lowest level in history and continues to go to the warehouse. With the gradual return of all links in Hebei and Shandong to normal, the steel mills have actively resumed work and production, the utilization rate of blast furnace has maintained an upward trend, and the macro stimulus and real estate expectations have improved, with full potential for future demand increment; Superimposing the current inventory at the historical absolute low in the same period, there is a strong demand for active replenishment. Under the background of limited space for China’s coking coal production, limited customs clearance of imported Mongolian coal and high coking coal prices in the international market, China’s coking coal prices want to rebound strongly. The company is the leader of coking coal. Hedong Coalfield, Xishan coalfield and Huoxi coalfield are the main distribution areas of high-quality coking coal resources in the province. They have excellent resource endowment and bargaining power, and are expected to benefit from the rising price of coking coal.
The acquisition of 51% equity of Huajin coking coal has full potential for production and sales growth. The company plans to purchase 51% equity of Huajin coking coal and 49% equity of Mingzhu coal industry by issuing shares and paying cash (the remaining 51% shares are held by Huajin coking coal). Huajin coking coal holds two high-quality coking coal mining areas of Liliu and Xiangning, with recoverable reserves of 4.54 billion tons and approved production capacity of 11.1 million tons / year. With excellent resource endowment, strong profitability and outstanding market competitiveness, Huajin coking coal is known as “China’s treasure”. In 2020, Huajin coking coal company had an operating revenue of 5.94 billion yuan and a net profit of 710 million yuan. After being incorporated into Huajin coking coal, the Shanxi Coking Coal Energy Group Co.Ltd(000983) production capacity may grow to 48.9 million tons / year, an increase of 29.4% compared with that before the acquisition, and the performance is expected to be further thickened. Meanwhile, Huajin coking coal is one of the five major coal subsidiaries of the former Shanxi Coking Coal Energy Group Co.Ltd(000983) group. Compared with Shuiyu and Tenghui coal industries acquired last year, Huajin coking coal has higher asset level and larger asset scale, and the asset securitization of coking coal group has been accelerated.
The asset securitization of coking coal group was accelerated, and the overall listing of the group was accelerated. In February 2021, Shanxi Guoyun held a signing meeting for the assessment of “one enterprise and one policy” of provincial enterprises, which proposed that the “asset securitization rate of provincial enterprises reached more than 80%. The coking coal group affiliated to the company is the second “double billion” coal enterprise with coal output of more than 100 billion yuan and sales revenue of more than 100 billion yuan in China, and its production capacity ranks first in China. The company is the main listing platform of coking coal group’s coal assets. The group has always attached great importance to it. The group pursues the path of “making good use of the group’s listed companies and platforms, relying on the strength of the capital market to promote professional reorganization and resource integration”, and determines the main direction of “making good use of the platform of listed companies to promote coal resource integration and professional reorganization”. With the acceleration of asset securitization of the group, the space for asset injection is worth looking forward to.
Investment advice. The company changed its name to ” Shanxi Coking Coal Energy Group Co.Ltd(000983) “, shouldering the important task of listing the group’s coal assets and clarifying the status of the leading listed company in the coking coal sector. The company wants to acquire 51% equity of Huajin coking coal, the group’s high-quality asset, and inject the assets into the next city. The future growth space is worth looking forward to. Considering that coking coal prices continue to rise and the performance is expected to continue to grow, it is expected that the net profit attributable to the parent company from 2021 to 2023 will be 4.17 billion yuan, 11.73 billion yuan and 12.21 billion yuan respectively, and EPS will be 102 million yuan, 286 yuan and 2.98 yuan respectively, corresponding to PE of 13.5, 4.8 and 4.6, maintaining the “buy” rating.
Risk tip: coal prices have fallen sharply, the control of imported coal has been relaxed, the progress of national reform in Shanxi is less than expected, and there is uncertainty in asset injection
