Power investment energy ( Huolinhe Opencut Coal Industry Corporation Limited Of Inner Mongolia(002128) )
Event: on April 14, 2022, the company disclosed its annual report for 2021. In 2021, the company achieved an operating revenue of 24.649 billion yuan, a year-on-year increase of 22.79%. The net profit attributable to shareholders of listed companies was 3.56 billion yuan, a year-on-year increase of 71.92%.
The production and sales of coal are stable and the price rises. The price center is expected to move up in 2022. In 2021, the company produced 982200 tons of raw coal, a year-on-year decrease of 0.02%, and sold 460368 million tons of commercial coal, a year-on-year increase of 0.41%. The production and sales were basically stable. The company’s coal sales are dominated by the long-term association, and the price fluctuation is relatively weak. In 2021, the company’s comprehensive coal price increased by 13% year-on-year to 162.31 yuan / ton, and the cost per ton of coal was 85.89 yuan / ton, a year-on-year increase of 14.1%. The comprehensive gross profit margin of coal business was 48.98%, down 0.6 percentage points year-on-year. In 2022, the benchmark price of the long-term association will be raised from 535 yuan / ton to 675 yuan / ton, an increase of 26%. The proportion of the company’s long-term association is high, and the price center is expected to move up.
The installed capacity of new energy continues to expand, which is expected to become a new profit growth point. The power generation increased steadily and the gross profit margin decreased slightly: in 2021, the company achieved 7.656 billion kwh of power generation, a year-on-year increase of 10.6%, 6.889 billion kwh of power sales, a year-on-year increase of 10.62%, and the kWh revenue was 0.33 yuan, a year-on-year increase of 5.5%. The power generation cost was 0.23 yuan / kWh, with a year-on-year increase of 6.2%. The gross profit margin of final power products was 31.23%, down 0.46 percentage points from the same period last year. In recent years, the company has continuously expanded its new energy power generation business. According to the announcement in the annual report, the company has been put into operation. The installed capacity of new energy power generation is 1.56 million KW. During the “14th five year plan” period, the company will still vigorously develop green power projects. By the end of the “14th five year plan”, the company plans that the installed capacity of new energy will reach more than 7 million KW, which has become another supporting point for the growth of enterprise profits.
The price of electrolytic aluminum rose and the gross profit margin increased. In 2021, the company produced 878700 tons of electrolytic aluminum, a year-on-year decrease of 3.82%, and sold 880300 tons of electrolytic aluminum, a year-on-year decrease of 3.47%. It is estimated that the income per ton of electrolytic aluminum is 1639984 yuan / ton, with a year-on-year increase of 33.5%, and the cost of electrolytic aluminum is 12190 yuan / ton, with a year-on-year increase of 23.3%. The comprehensive gross profit margin of electrolytic aluminum products was 26.53%, up 6.59 percentage points year-on-year. In 2021, Huo meihongjun’s net profit was 2.44 billion yuan, a year-on-year increase of 143.27%. Subject to the capacity “ceiling” of the electrolytic aluminum industry, it is expected that the electrolytic aluminum industry will maintain a high boom in 2022. The company has formed a coal, electricity and aluminum industry chain in Huolinhe area, has its own power plant close to the coal origin, has the advantage of power cost, and the profit of electrolytic aluminum business is expected to continue to grow.
Investment suggestion: we predict that the net profit attributable to the shareholders of the parent company is expected to be 5.613 billion yuan / 6.031 billion yuan / 6.158 billion yuan from 2022 to 2024, and the corresponding PE multiples are 6 times, 6 times and 6 times respectively (based on the stock price on April 14, 2022). Considering the company’s active transformation to new energy in recent years, it is expected to obtain a valuation higher than that of pure thermal coal business. Therefore, we believe that the company’s valuation is expected to rebound and maintain the “recommended” rating.
Risk tips: 1) the change of regional market demand may lead to the decline of coal price; 2) The profit of thermal power may decline due to the liberalization of the power market and the risk of increased cost; 3) There are many new energy projects under construction, with the risk of policy change; 4) Electrolytic aluminum prices fell sharply.
