\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 088 China Shenhua Energy Company Limited(601088) )
Event: on April 27, 2022, the company released the first quarter report that the net profit attributable to the parent company in the first quarter was 18.957 billion yuan, a year-on-year increase of 63.3%; The operating income was 83.09 billion yuan, a year-on-year increase of 83.09%.
Under the international accounting standards, the net profit attributable to the parent company in 22q1 is 19.776 billion yuan. According to the announcement, under the international financial reporting standards, the company’s net profit attributable to the parent company in the first quarter of 2022 was 19.796 billion yuan, 839 million yuan higher than the net profit attributable to the parent company according to the Chinese accounting standards for business enterprises. In the same period last year, the net profit attributable to the parent company under the international financial reporting standards was 253 million yuan higher than the net profit attributable to the parent company under the Chinese accounting standards for business enterprises. The difference of caliber lies in the difference caused by the recognition time point and recognition method of maintenance fee, safety production fee and other similar expenses. We believe that under the background of little change in output, the expansion of the difference in net profit attributable to the parent under the two accounting standards may reflect that the company has improved the unit accrual standard of relevant expenses.
The volume and price of coal business increased simultaneously, and the gross profit increased significantly. In the first quarter of 2022, the company produced 80.8 million tons of commercial coal, a year-on-year increase of 3.6%. 105.7 million tons of commercial coal were sold, a year-on-year decrease of 8.4%. Among them, the annual long-term Association reached 54.4 million tons, a year-on-year increase of 28.4%, and the proportion in the total sales increased by 9 percentage points to 51.5%. The comprehensive selling price of commercial coal in the first quarter was 624 yuan / ton, a year-on-year increase of 31.4%. Among them, the annual long-term association price is 516 yuan / ton, with a year-on-year increase of 28.4%, the monthly long-term association price is 787 yuan / ton, with a year-on-year increase of 36.9%, and the spot price is 773 yuan / ton, with a year-on-year increase of 59.7%. The production cost of self-produced coal increased slightly from 128.4 yuan / ton to 150 yuan / ton, an increase of 16.8%. The gross profit of coal business was 24080 million yuan, a year-on-year increase of 79.2%, and the gross profit margin was 35.3%, a year-on-year increase of 11.6 percentage points.
The equity production capacity increased by 4.1 million tons / year, and the output is expected to increase. According to the announcement, the three mines under the company received a reply from the comprehensive Department of the State Administration of mine safety and agreed to increase the production capacity. Specifically, the production capacity of Shenshan open pit coal mine (100% equity) increased from Shanghai Pudong Development Bank Co.Ltd(600000) tons / year to 1.2 million tons / year; The production capacity of huangyuchuan coal mine (100% equity) increased from 10 million tons / year to 13 million tons / year; The production capacity of qinglongsi coal mine (50% equity) increased from 3 million tons / year to 4 million tons / year. The cumulative nuclear capacity of the three mines increased by 4.6 million tons / year, and the total equity capacity increased by 4.1 million tons / year. With the approval of the company’s capacity increase, the company’s self-produced coal output is expected to increase.
The cost control was good, and the gross profit margin of power business decreased slightly. The slight increase in costs depresses the gross profit margin, and the potential for power capacity expansion is still sufficient: according to the announcement, the company’s total power generation in the first quarter was 46.75 billion kwh, a year-on-year increase of 25.7%; The electricity sales in the first quarter was 43.99 billion kwh, a year-on-year increase of 26.1%. The selling price of electricity in the first quarter was 411 yuan / MWh, a year-on-year increase of 21.6%. The average power selling cost of power generation business was 371.9 yuan / MWh, with a year-on-year increase of 21.7%. The gross profit of power business was 3274 million yuan, a year-on-year increase of 37.3%, and the gross profit margin was 16%, a year-on-year decrease of 1.7 percentage points. Since 2020, the company has entered the centralized operation period of the power plant. By the end of 2021, 8800mw power units under construction (including approved but not yet under construction) of the company, of which Luoyuanwan 2 1000MW units have been fully put into operation. In the future, the company will still have 6800mw units put into operation (2000MW of Beihai power plant, 2000MW of Qingyuan Power Plant, 2000MW of Hunan Yueyang project and 800MW of Huizhou phase II gas-fired cogeneration unit). The installed scale of power is expected to continue to expand.
The profit of transportation business was stable, and the gross profit of shipping increased significantly. In the first quarter of 2022, the company’s own railway turnover was 72.7 billion ton kilometers, a year-on-year decrease of 1.5%; The loading volume of Huanghua Port was 51.9 million tons, a year-on-year decrease of 5.8%; The loading capacity of Tianjin Coal Wharf was 9.7 million tons, a year-on-year decrease of 11%; The shipping freight volume was 30.7 million tons, a year-on-year increase of 1.7%. The gross profit of transportation business in the first quarter was 6207 million yuan, a year-on-year decrease of 0.89%, of which the railway decreased by 0.5%, the port decreased by 3.8%, and the shipping increased by 38.7%. The year-on-year increase of gross profit of shipping division was mainly due to the year-on-year increase of shipping price.
The cost of olefin products is higher and the gross profit is reduced. In the first quarter of 2022, the company sold 908000 tons of polyethylene, a year-on-year increase of 4.2%, and 867000 tons of polypropylene, a year-on-year decrease of 3.3%. The gross profit of coal chemical business was 315 million yuan, a year-on-year decrease of 21.8% and a gross profit margin of 19.1%, a decrease of 6.2 percentage points over the same period last year. The year-on-year decline in gross profit of coal chemical business is mainly due to the rise in coal purchase price.
Investment suggestion: we estimate that the net profit attributable to the parent company from 2022 to 2024 will be 69.7 billion yuan, 73.344 billion yuan and 75.012 billion yuan, corresponding to EPS of 3.51/3.69/3.78 yuan / share and PE of 8 times, 8 times and 8 times respectively on April 27, 2022. The valuation in the industry is low. At the same time, the company continues to have high dividends and the dividend rate is also high in the industry. The cash value of the company is expected to be revalued, the valuation is expected to be improved and the “recommended” rating is maintained.
Risk tip: coal prices have fallen sharply, the demand for thermal power is lower than expected, and the construction of projects under construction is slower than expected.
