\u3000\u3000 Shanxi Coking Coal Energy Group Co.Ltd(000983) (000983)
Event: on January 16, 2022, the company announced that it planned to purchase 51% equity of Huajin coking coal held by coking coal group and 49% equity of Mingzhu coal held by Li Jinyu and Gao Jianping by issuing shares and paying cash. The transaction price of 51% equity of Huajin coking coal is 6.599 billion yuan, and the transaction price of 49% equity of Mingzhu coal is 443 million yuan. The proportion of cash payment is 15% of the transaction price, and the proportion of share payment is 85% of the transaction price. The total transaction price is 7.042 billion yuan, and the total amount of supporting funds to be raised is no more than 4.4 billion yuan.
The corresponding valuations of Huajin coking coal and Mingzhu coal are 10 times and 5 times respectively. According to the announcement, the performance commitments of Huajin coking coal in 2021-2024 are RMB 1.357 billion, RMB 1.218 billion, RMB 1.229 billion and RMB 1.862 billion respectively. Considering the purchase price of 51% equity of RMB 6.599 billion, the purchase price corresponds to 10 / 11 / 11 / 7 times of PE in 2021-2024; The net profit of Mingzhu coal industry from January to July 2021 was 113 million yuan, and the annualized net profit was 194 million yuan. Considering the transaction price of 49% equity of 443 million yuan, the purchase price corresponding to PE was 5 times. Considering that the coal price continues to rise in the second half of 2021 and the profitability in the second half of 2021 is stronger than that in the first half of 2021, the actual valuation should be lower than the estimated value.
After the acquisition, the equity production capacity increased by about 16%. According to the announcement, the total production capacity of Huajin coking coal is 11.1 million tons / year, and the main assets are Shaqu No. 1 mine (4.5 million tons / year), Shaqu No. 2 mine (2.7 million tons / year), Mingzhu coal industry (production capacity of 900000 tons / year, Huajin coking coal holds 51%), Jining coal industry (production capacity of 3 million tons / year, Huajin coking coal holds 51%). After the equity acquisition, the company’s equity production capacity will increase by 5.13 million tons / year. As of the first half of 2021, the company’s equity production capacity was 32.57 million tons / year. After the acquisition, the scale of the company’s equity production capacity increased by 15.7%. According to the announcement, after the acquisition, the net profit attributable to the parent company from January to July increased from 2.269 billion yuan to 2.765 billion yuan (for reference), an increase of 21.83%. However, due to the company’s need to issue 983 million shares to raise funds (including 903 million shares to the controlling shareholders, and the impact of supporting fund-raising of 4.4 billion on the share capital has not been considered), the diluted EPS is still 0.55 yuan / share, and there is no growth.
Asset injection kicked off. This acquisition is another acquisition of the assets of major shareholders after the acquisition of Shuiyu Coal Industry and Tenghui coal industry in 2020. In February 2021, Shanxi Guoyun held an assessment and signing meeting of “one enterprise and one policy” for provincial enterprises, and put forward the goal of “asset securitization rate of more than 80% for provincial enterprises”. According to the group’s bond prospectus, by the end of 2020, the group had a total coal production capacity of 207 million tons, including 131 million tons of main mine production capacity. After excluding the production capacity of listed companies and the production capacity of Shan Coal Group (the main assets are Shanxi Coal International Energy Group Co.Ltd(600546) ), there are still about 44.8 million tons of production capacity, which is possible for asset securitization, and the space for asset injection is still broad.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 5.521 billion yuan, 6.543 billion yuan and 6.911 billion yuan (excluding this asset acquisition), equivalent to EPS of 1.35/1.60/1.69 yuan / share, corresponding to PE of 6 times, 5 times and 5 times respectively (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 have fallen sharply; The group’s asset injection is less than expected; There is still uncertainty in this asset acquisition; The acquisition still needs to raise no more than 4.4 billion yuan, so EPS may be further diluted.
