Report summary
Review of 2021: coal shortage is common, and coal prices have experienced unprecedented market in history. 2021 is an extraordinary year for the coal industry. The shortage of supply drives the coal price to rise continuously, reaching an unprecedented height in October, and then quickly callback under the strong regulation of policies; Most stocks in the coal industry have also experienced rapid rise and fall. The rise of the whole sector is in the leading position in the whole market. Companies with a high proportion of coal in the market have large performance flexibility and more obvious stock price fluctuations. There are three main reasons for the tight supply and demand of power coal: 1) China’s epidemic control is good, the resumption of work is fast, the growth of power demand is fast, and the lack of hydropower has led to a significant increase in the demand for coal; 2) China’s coal production is growing slowly under multiple constraints such as safety, environmental protection and anti-corruption; 3) Due to the impact of epidemic situation, weather and policies, China’s import increment is small. There are two main reasons for the tight supply and demand of coking coal: 1) significant restrictions on imports; 2) The demand for power coal has increased significantly, occupying part of the production of coking coal. There are two main reasons for the sharp rise of coke price: 1) policies such as capacity removal and environmental protection affect production; 2) Driven by the rising price of coking coal.
Outlook for 2022: supply and demand remain in tight balance, and the price center is expected to move down. Under the background of carbon neutrality, the transformation of the energy industry is the main line in the long term in the future. The coal industry will face a pattern of tightening supply, changing demand and stabilizing price. Supply side: there is a lack of investment planning in the early stage, and China’s future capacity growth is limited. China’s capacity growth needs to pay attention to the completion of capacity replacement commitments and the progress of land acquisition of open-pit coal mines. However, the capital expenditure of international coal enterprises continues to be low, and it is difficult to have a significant increase in import volume; The policy side tends to improve mine scale and efficiency and control coal production. Demand side: in the process of energy structure transformation, the dependence on thermal power is still high, and the demand growth rate is optimistic. The growth rate from 2022 to 2023 is expected to be maintained at about 3%, while the investment in real estate infrastructure is low, the demand for cement and steel is weak, and the demand for coal is expected to decline slightly (- 2%). In comparison, the coal chemical industry encouraged by the policy may have growth potential. Price: through the analysis and prediction of the supply and demand balance table, we expect that the coal supply and demand will remain in tight balance from 2022 to 2023, and the supply and demand gap will still be, but will gradually narrow. At the same time, considering policy regulation and other factors, it is expected that the coal price center will move down in 2022, the power coal market price center will be 700-900 yuan / ton, and the coking coal price center will also move down. Overall, the volatility of coal price is weakened. The price in 2022 may be lower than that in 2021, but higher than the average value of each year during the 13th Five Year Plan period (2016-2020).
Investment strategy: the transformation of coal enterprises will become a hot topic, focusing on three directions to dig gold in 2022. The investment logic of the coal industry in 2022 will be different from that in 2021. We propose three investment keywords for the coal industry in 2022, namely, high proportion of long-term association, elasticity of capacity growth and transformation of coal enterprises. The overall upward movement of the price center of the long-term association will benefit more companies with a high proportion. Its performance is expected to be released steadily in the future and has the ability to stabilize and high dividends. It is recommended to pay attention to: China Shenhua Energy Company Limited(601088) , China Coal Energy Company Limited(601898) , Shaanxi Coal Industry Company Limited(601225) , Pingdingshan Tianan Coal Mining Co.Ltd(601666) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Huaibei Mining Holdings Co.Ltd(600985) . The future capacity increment of the coal industry is limited, and the whole industry has entered the period of stock capacity. When the profitability of coal enterprises is good, the capacity means profit, and the capacity growth elasticity is the performance elasticity. It is suggested to pay attention to the targets with large capacity growth space in the future: China Coal Energy Company Limited(601898) , Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) , Shanxi Coking Coal Energy Group Co.Ltd(000983) , Beijing Haohua Energy Resource Co.Ltd(601101) , Shanxi Lanhua Sci-Tech Venture Co.Ltd(600123) . The dual carbon goal will be the long-term main line of future investment in the energy industry. As the current main energy supplier, the future development direction of coal enterprises will be an unavoidable topic. Coal enterprises have resources, funds and willingness in transformation. Some enterprises have transformed and distributed energy storage (such as sodium ion battery, flywheel energy storage, etc.) relying on the advantages of main business resources or by-products For wind power photovoltaic operation, hydrogen energy, etc., it is suggested to pay attention to the leading targets of new energy transformation: Shanxi Meijin Energy Co.Ltd(000723) , power investment energy, Yankuang energy, Jinneng Science&Technology Co.Ltd(603113) , China Xuyang group, etc.
Risk tips: (1) economic growth is lower than expected risk. (2) Policy regulation risk. (3) Risk of continued substitution of renewable energy. (4) Measurement error risk.
