\u3000\u3000 Jinneng Holding Shanxi Coal Industry Co.Ltd(601001) (601001)
Event: on January 14, 2022, the company released the annual performance forecast for 2021. The company expects the net profit attributable to the shareholders of the listed company to be about 4.868 billion yuan in 2021, an increase of about 3.992 billion yuan compared with the same period of last year, a year-on-year increase of about 455.84%. The net profit after deducting the above non recurring profits and losses is about 4.676 billion yuan, which will increase by about 3.802 billion yuan compared with the same period of last year, with a year-on-year increase of about 434.83%.
The performance increased significantly in the fourth quarter. According to the announcement, in the fourth quarter, the company realized a net profit attributable to the shareholders of the parent company of RMB 2.272 billion, a year-on-year increase of 1910% and a month on month increase of 84%. According to the announcement, the main reasons for the pre increase of the company’s performance are: 1) the rise of coal price and the increase of the company’s commercial coal sales. 2) The joint-stock company Tongxin coal mine has good benefits, resulting in a significant increase in the company’s investment income. 3) The company fully implements fine management, which has brought great growth to the overall profitability of the company.
The benchmark price of the long-term association has increased, and the company’s performance is expected to continue to release in 2022. The company is a leading power coal enterprise in Shanxi Province, with a high proportion of long-term association contracts. The fluctuation of long-term association is weaker than that of port price most of the time, and the company has strong profit stability. In 2022, the benchmark price of the long-term association is expected to increase from 535 yuan / ton to 700 yuan / ton. The center of the long-term association is expected to move up, and the proportion of the company’s long-term association is relatively high. In 2022, the company’s profit center is also expected to move up, and the performance is expected to be released continuously. In the long run, the capacity bottleneck of the coal industry may continue, and the supply may continue to be tight. The price center is expected to remain high, and the company’s high and long-term association is expected to ensure a sustained high profitability.
Jinneng coal group, the controlling shareholder of the company, has strong overall resource reserve strength and has the possibility of asset injection. In February 2021, Shanxi Guoyun held a signing meeting for the assessment of “one enterprise and one policy” of provincial enterprises, Proposed provincial enterprises “The asset securitization rate has reached more than 80%. Jinneng holding group has gathered the high-quality coal resources of the original three major coal enterprises in Shanxi. At present, it involves a total coal production capacity of about 404 million tons / year. It is the first coal enterprise in the province and the second largest coal enterprise in China with strong strength. As its only coal listing platform, the company has a clear positioning for coal resource integration. The coal production capacity of listed companies is only 48.1 million tons / year (including Tongxin mine), by the end of the third quarter of 2021, the asset securitization rate of controlling shareholders was only about 24%. Under the background of major shareholders improving their asset securitization rate, the company has broad space for asset injection.
Investment suggestion: the company is the leader of power coal in Shanxi Province, with rich coal resources and excellent resource endowment. The company is located at the starting point of Daqin line with convenient transportation. Meanwhile, the reform of state-owned enterprises in Shanxi province continues to advance, the controlling shareholders have the demand to improve the asset securitization rate, and the asset injection is expected to start. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be RMB 4.868 billion, RMB 6.029 billion and RMB 6.185 billion, equivalent to EPS of 2.91/3.60/3.70 yuan / share respectively, and the corresponding PE is three times (based on the share price on January 14, 2022). The valuation in the industry is low. For the first coverage, give a “recommended” rating.
Risk tip: coal prices fell sharply, the progress of state-owned enterprise reform in Shanxi was less than expected, and the group’s asset injection was less than expected.
