\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 666 Pingdingshan Tianan Coal Mining Co.Ltd(601666) )
Coking coal prices remained high, and Q1 performance increased significantly year-on-year. Maintain “buy” rating
The company issued the announcement of pre increase of performance in the first quarter of 2022. In Q1 of 2022, the net profit attributable to the parent company was about 1.63 billion yuan, an increase of 1.09 billion yuan year-on-year, an increase of 199.4%; The net profit deducted from non parent company was about 1.65 billion yuan, with a year-on-year increase of 1.11 billion yuan or 206.2%. The year-on-year increase in Q1 performance in 2022 is mainly due to the high price of coking coal and the continuous release of economies of scale under the clean coal strategy. We maintain the forecast for 20222024. It is estimated that the net profit attributable to the parent company in 20222024 will be RMB 7.32/81.5/8.52 billion, with a year-on-year increase of 150.5% / 11.3% / 4.5% and EPS of RMB 3.16/3.52/3.68; The current share price corresponds to 4.7 / 4.2 / 4.1 times of PE. Driven by the “steady growth” policy, the supply and demand fundamentals will remain tight in the future. The company benefits from the continuous high operation of coking coal long-term association price, and the company’s performance is expected to continue to improve. Maintain the “buy” rating.
Coking coal prices rose sharply year-on-year, driving steady and high growth in performance
Q1 coking coal prices rose sharply year-on-year, driving steady and high growth in performance. The company’s coking coal sales are dominated by long-term association. The price of Q1 long-term association in 2022 continues to be 2900 yuan / ton in Q4 in 2021, with a year-on-year increase of 133.9%. In terms of the market, with the resumption of the steel plant after, coke steel enterprises are actively replenishing the warehouse, Q1 coking coal prices continue to rise, and the demand continues to be strong. The company implements the clean coal strategy. The coal quality in the mining area under its jurisdiction is good, the washing rate is high, and the economies of scale can be continuously released.
Coking coal supply is expected to remain tight, and the annual performance is expected to continue to improve
In 2022, coking coal fundamentals may still be dominated by tight balance. In terms of supply, with the approach of the 20th National Congress and the continuous increase of security inspection and environmental protection, it is difficult to increase the amount of coking coal in China. At the same time, it is difficult to release the ban on Australian coal, and the supply of high-quality main coking coal in the market is relatively scarce; In terms of demand, with the central government’s GDP growth rate of 5.5% and the “steady growth” strategy, the demand for downstream real estate infrastructure increases. With the gradual weakening of the impact of the epidemic, the national real estate infrastructure operation rate will increase significantly, and the demand for coking coal is expected to rise throughout the year. Coking coal is not controlled by the policy price limit, and the price is expected to continue to operate at a high level, which is optimistic about the annual performance growth of the company.
The integrated coal and coke industry has been extended, and the cost reduction and efficiency increase have been continuously promoted
The company actively lays out the coking coal integration strategy and plans to invest 700 million yuan to establish a joint venture with Rufeng coking to build a coking project with an annual output of 1.2 million tons. In the future, coking enterprises subordinate to the group are planned to inject gradually. The company will actively promote the strategy of staff reduction and efficiency increase and the stripping of auxiliary industries. By stripping the backward non main businesses such as production assistance and living services, the company will optimize the allocation of main coal industry, further promote staff reduction and efficiency increase, and plan to reduce staff to less than 40000 in the future. In terms of dividends, the company still carries out the high dividend commitment. In 2021, the company plans to pay a dividend of 1.76 billion yuan, accounting for 60.2% of the company’s net profit attributable to the parent, with a dividend rate corresponding to the latest closing price of 4.5%. Gaogaohong’s high dividend rate is still attractive, and the current undervalued value is expected to be repaired.
Risk tip: demand growth is less than expected; The epidemic situation affects the operating rate; Increased security inspection led to production suspension and reduction
