\u3000\u30 China Baoan Group Co.Ltd(000009) 83 Shanxi Coking Coal Energy Group Co.Ltd(000983) )
Event: on April 14, 2022, the company released the performance express of 2021 and the performance forecast of the first quarter of 2022. In 2021, the company achieved a total operating revenue of 45.285 billion yuan, a year-on-year increase of 34.15%. The net profit attributable to shareholders of listed companies was 4.166 billion yuan, a year-on-year increase of 112.94%. In the first quarter of 2022, the company expects a net profit of 2.32 billion yuan to 2.593 billion yuan in the first quarter, with a year-on-year increase of 155% – 185%.
The volume and price increased steadily, and the performance increased significantly in 21 years. According to the performance express, the net profit attributable to the parent company of 2021q4 was 992 million yuan, a year-on-year increase of 179.4% and a month on month decrease of 19.3%. According to the announcement, in 2021, the company’s raw coal output was 35.69 million tons, a year-on-year increase of 0.71%, and the sales volume of commercial coal was 28.71 million tons, a year-on-year increase of 1.16%. The production and sales were stable as a whole. The improvement of performance is mainly affected by the rise of commodity coal price. According to wind data, in terms of coking coal, the price of Changxie coal has increased steadily, and the price elasticity of spot coal is strong. The spot price increased by 41.9% year-on-year in 2021 (both Changxie and spot refer to the weighted average price of Shaqu coking clean coal, the same below). The rise in prices led to a substantial increase in the company’s profits. In addition, the cost of fuel coal and raw material coal in power sector and coking sector increased, and the loss increased, which slightly dragged down the release of performance.
22q1’s profit hit a record high. In the first quarter of 2022, the coal price of the company rose in an all-round way. In the first quarter, the price of the long-term association increased by 45.28% year-on-year, and the spot increased by 64.19% year-on-year. Benefiting from the price rise, the net profit attributable to the parent company in the first quarter of 2022 reached the highest profit in a single quarter since the listing.
Continue to acquire the assets of controlling shareholders, and the growth of capacity extension can be expected. In 2020, the company completed the acquisition of Shuiyu Coal Industry and Tenghui coal industry. On January 16, 2022, the company announced that it planned to purchase 51% equity of Huajin coking coal held by coking coal group and 49% equity of Mingzhu coal held by Li Jinyu and Gao Jianping by issuing shares and paying cash. According to the announcement, the total production capacity of Huajin coking coal is 11.1 million tons / year, and the main assets are Shaqu No. 1 mine (4.5 million tons / year), Shaqu No. 2 mine (2.7 million tons / year), Mingzhu coal industry (production capacity of 900000 tons / year, Huajin coking coal holding 51%), Jining coal industry (production capacity of 3 million tons / year, Huajin coking coal holding 51%). After the equity acquisition, the company’s equity production capacity will increase by 5.13 million tons / year. As of the first half of 2021, the company’s equity production capacity was 32.57 million tons / year. After the acquisition, the scale of the company’s equity production capacity increased by 15.7%. According to the prospectus of the group’s bonds, by the end of 2020, the group had a total coal production capacity of 207 million tons, including 131 million tons of main mine production capacity. After excluding the production capacity of listed companies and the production capacity of Shan Coal Group (the main assets are Shanxi Coal International Energy Group Co.Ltd(600546) ), there are still about 44.8 million tons of production capacity, which has the possibility of asset securitization, and the space for asset injection is still broad.
Investment suggestion: according to the upward forecast of the performance forecast, the net profit attributable to the parent company from 2021 to 2023 is expected to be 4.166 billion yuan, 8.794 billion yuan and 8.964 billion yuan (excluding asset acquisition), the corresponding EPS is 1.02/2.15/2.19 yuan / share and the corresponding PE is 13 times, 6 times and 6 times respectively (based on the stock price on April 14, 2022). Maintain a “recommended” rating.
Risk warning: coal prices have fallen sharply; The group’s asset injection is less than expected; The ongoing asset acquisition is still uncertain, and the asset acquisition still needs to be funded, so EPS has the risk of further dilution.
