\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 699 Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) )
The performance of the whole year increased sharply in 2021, reached a new high in 2022q1, and maintained the “buy” rating
The company released an annual report. In 2021, it achieved a revenue of 45.15 billion yuan, a year-on-year increase of 73.3%, a net profit attributable to the parent company of 6.71 billion yuan, a year-on-year increase of 244.8%, and a deduction of non net profit of 7.78 billion yuan, a year-on-year increase of 310.2%. At the same time, the quarterly profit of the non parent company was + 2.445 billion yuan, with a year-on-year net profit of + 2.455 billion yuan and a year-on-year net profit of + 2.445 billion yuan, with a year-on-year net profit of + 2.455 billion yuan and a year-on-year net profit of + 2.445 billion yuan. Benefiting from the upward movement of coal price center, the company’s performance increased. We maintain the profit forecast and add the forecast for 2024. It is estimated that the net profit attributable to the parent company from 2022 to 2024 will be 9.79/10.37/10.5 billion yuan, with a year-on-year increase of 45.9% / 5.9% / 1.3%; EPS is 3.27/3.47/3.51 yuan, corresponding to 5.5/5.2/5.1 times the current share price PE. Coal prices at home and abroad remain high, coke demand continues to improve, the company’s profitability is expected to continue to improve, and maintain the “buy” rating.
Stable production and sales of coal coke, high performance driven by rising prices, and a new high in Q1
Coal: in 2021, the company’s coal output / sales volume was 54.36 million tons / 50.35 million tons, with a year-on-year increase of + 5.3% / + 3.9%. The coal production and sales volume increased slightly, with the selling price of 794 yuan / ton, a year-on-year increase of + 70.7%, the gross profit of 420 yuan / ton, a year-on-year increase of 152% (absolute value + 253 yuan / ton), of which the sales volume of mixed coal / injection coal was + 0.9% / 13.2%, and the gross profit per ton was + 127.5% / 161.0%. Coke: in 2021, the company’s coke sales volume was 1.9 million tons, a year-on-year increase of – 2.9%, the selling price was 2551 yuan / ton, a year-on-year increase of + 55.6%, and the gross profit was 364 yuan / ton, a year-on-year increase of + 24.5%. In 2021, the production and sales of coal and coke of the company were relatively stable, and the sharp rise in prices promoted the high growth of performance. In 2022, Q1 company’s total coal sales volume was 12.93 million tons, with a year-on-year increase of + 12.5%, the selling price was 975 yuan / ton, with a year-on-year increase of + 72.2%, and the gross profit was 444 yuan / ton, with a year-on-year increase of + 68.9%.
Coal supply is tight, coke demand is improved, and profitability is expected to continue
Tight coal supply: Australia’s main coking coal is in short supply for a long time, the EU prohibits the import of Russian coal, further boosting the rise of overseas coal prices, and the widening coal price difference outside China inhibits the import demand. China’s coal import in the first quarter decreased by 24% year-on-year. With the easing of the epidemic and the demand growth brought by the peak summer, there is still room for coal prices to rise, and the high profit of coal is expected to continue. Coke demand is improving: affected by the epidemic, the current real estate infrastructure has not improved, and the steel sales link is blocked. With the mitigation of the epidemic, the operating rate of coke downstream is expected to increase. Under the expectation of “stable growth”, the improvement of coke demand will promote the further rise of price, and the profitability of coke is expected to be further improved.
Eliminate backward production capacity and move towards a new journey of high-quality development
Replacement coke capacity: 1.56 million tons / year for Lu’an coking and Shanghai Pudong Development Bank Co.Ltd(600000) tons / year for Hongfeng coking, both of which are 4.3m low-end coke oven capacity. In 2021, the company eliminated the 1.56 million T / a capacity of Lu’an coking, and vigorously arranged the 5 million T / a coking park to replace the backward capacity in batches, of which the 1.4 million T / a new green coking project has begun trial production. Optimize coal mines: the company scrapped some shaft and roadway assets, eliminated some backward production capacity, and accrued asset impairment for resource exhausted mines. In 2021, the profit and loss from disposal of non current assets of the company was -1.56 billion yuan, the asset structure was further optimized, and the company was moving towards a new journey of high-quality development. Conversion Development Fund: it is planned to resume the withdrawal of coal mine conversion development fund of 5 yuan / ton from April 1, 2022, which is expected to affect the current profit of 180 million yuan.
Risk warning: the economic recovery is not as expected; Coal prices fell more than expected; The production capacity of coal coke industry is too large
