\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 088 China Shenhua Energy Company Limited(601088) )
Event: on April 27, 2022, China Shenhua Energy Company Limited(601088) released the first quarter report. During the reporting period, the company achieved an operating revenue of 83.902 billion yuan, a year-on-year increase of 24.1%; The net profit attributable to the parent company was 18.957 billion yuan, a year-on-year increase of 63.3%; After deducting non recurring profits and losses, the profit was 18.617 billion yuan, a year-on-year increase of 60.7%; The net cash flow from operating activities was 28.436 billion yuan, a year-on-year increase of 45%; The basic earnings per share was 0.954 yuan / share, a year-on-year increase of 63.3%.
Comments:
Coal sector: in the first quarter, the company’s coal sales price increased by 31.4%, driving the operating revenue of coal business to increase by 20.5%. In the first quarter, the company produced 80 million tons of commercial coal, a year-on-year increase of 3.6%; The coal sales volume was 105 million tons, with a year-on-year decrease of 8.4%, of which the annual long-term cooperation accounted for 51.47%, the monthly long-term cooperation accounted for 35% and the spot accounted for 8.6%. The average sales price of coal in the first quarter was 624 yuan / ton, up 31.4% year-on-year. Due to the company’s plan to reduce the sales volume of trade coal this year, the output increased year-on-year, but the sales volume decreased year-on-year. The decrease in the sales volume of purchased coal had little impact on the company’s performance. Driven by the sales price, the operating revenue of the coal sector in the first quarter was 67.854 billion yuan, an increase of 20.5% year-on-year. The cost per ton of coal produced by the company was 150 yuan / ton, with a year-on-year increase of 16.8%, mainly due to the increase in the amount of social security payment due to the increase in the number of employees, as well as the increase in outsourcing stripping fees and other costs. In the first quarter, the gross profit of the coal sector was 24.08 billion yuan, an increase of 79.2% year-on-year; The gross profit margin was 35.5%, with a year-on-year increase of 11.6 PCT. It is expected that under the background of tight supply and demand in the coal market this year, the price is expected to remain at a medium high level. The increase of the average selling price of coal will increase the revenue, reduce the proportion of purchased coal and improve the overall gross profit margin of the sector. The company’s performance is expected to continue the growth momentum in 2021.
Power sector: in the first quarter, the company’s electricity sales and electricity price increased significantly year-on-year, driving the revenue of power business to increase by 51.9% China Shenhua Energy Company Limited(601088) in the first quarter, the power generation was 46.75 billion kwh, an increase of 25.7% year-on-year; The electricity sales reached 43.99 billion kwh, a year-on-year increase of 26.1%; The average utilization hours were 1234 hours, with a year-on-year increase of 4.8%; The weighted average selling price was 411 yuan / MWh, a year-on-year increase of 73 yuan / MWh, an increase of 21.6%. During the reporting period, the total installed capacity of the group was 37899 MW, and there was no new or reduced installed capacity. The simultaneous increase in volume and price of power business brought revenue growth, with revenue of 20.443 billion yuan in the first quarter, a year-on-year increase of 51.9%; Affected by the rising purchase price of coal, the operating cost increased by 55.1%, and the average power selling cost was 371.9 yuan / MWh. The gross profit was 3.274 billion yuan, a year-on-year increase of 37.3%; The total profit was 2.561 billion yuan, a year-on-year increase of 46.7%. It is expected that in the future, with the continuous increase of coal-fired power generation and the implementation of the policy of floating the market transaction price by 20%, the company’s power sales price is expected to rise, stabilizing the cost pressure caused by high coal prices to a certain extent.
Transportation and coal chemical industry: the profit of the shipping division increased by 50.6% year-on-year due to the rise of shipping prices. During the reporting period, the company’s railway, port and shipping revenue reached 10.342 billion yuan, 1.636 billion yuan and 1.433 billion yuan respectively, with a year-on-year increase of 4.8%, 0.3% and 15.2%. The operating cost growth of railway and port business was higher than that of revenue, which dragged down the performance. In the first quarter, the gross profit was 5.033 billion yuan and 794 million yuan respectively, a year-on-year decrease of 0.5% and 3.8%. The shipping sector benefited from the rise in shipping prices, with a year-on-year increase in revenue of 15.2%, a gross profit of 380 million yuan, a year-on-year increase of 38.7%, and a gross profit margin of 26.5, a year-on-year increase of 4.5 PCT. Due to the rise of coal purchase price, the operating cost of coal chemical business increased year-on-year. In the first quarter, the gross profit was 315 million yuan, down 21.8% year-on-year, and the gross profit margin was 19.1%, down 6.2 PCT year-on-year.
The easing of the epidemic situation is expected to bring about the recovery of coal consumption, the peak season of coal consumption is approaching, and the company’s profit is expected to maintain steady growth. The current epidemic restricts the consumption of power coal in coastal provinces, and the inventory of power coal has accumulated slightly, but it is still low. It is expected that with the gradual easing of the epidemic, coal consumption is expected to rebound. Throughout the year, the increment of coal is limited, the supply elasticity is small, the import of thermal coal is shrinking, and the railway transportation capacity is limited. It is expected that the coal market will maintain a tight supply and demand situation and support the operation of medium and high coal prices China Shenhua Energy Company Limited(601088) as a leading power coal company, it is expected to continue to give full play to the integration advantages of coal, electricity, land, port and shipping and maintain the continuous growth of profits.
Profit forecast and investment rating: raise the company’s profit forecast and maintain the buy rating. According to the data disclosed in the quarterly report and the annual report of the parent company, the net profit of the parent company is expected to be RMB 701.93 billion and RMB 682917 billion in 2021, and the net profit of the parent company is expected to be RMB 789.8 billion-2023.7 billion in 2021; EPS is 3.44/3.93/4.41 (the original predicted value of 20222024 is 3.07/3.54/4.01). We believe that in the context of global energy inflation, the coal price center is expected to continue to rise in the next few years, and the price of the long-term association is expected to rise year by year. The franchise attribute of China Shenhua Energy Company Limited(601088) makes the operating performance highly deterministic. In addition, the integrated operation enables all sectors to release enough upward performance flexibility and maintain the “buy” rating.
Risk factors: the macroeconomic situation is uncertain due to the impact of the epidemic; Geopolitical factors affect the global economy; Uncertainty of policies in coal and power related industries; Safety production accidents in coal mines, etc.
