\u3000\u3000 Shanxi Coal International Energy Group Co.Ltd(600546) (600546)
Event: on January 20, 2022, the company announced the announcement on the advance increase of annual performance in 2021. The company expects to realize the net profit attributable to the shareholders of the listed company in 2021 to be 4.5 billion yuan, an increase of 3.673 billion yuan to 4.173 billion yuan compared with the same period of the previous year (after retroactive adjustment), an increase of 444.14% to 504.59% year-on-year (after retroactive adjustment).
The company’s performance greatly exceeded market expectations. According to the announcement, the company realized a profit of 4.5-5 billion yuan attributable to the shareholders of the listed company in 2021, far exceeding the consensus expectation of 2.767 billion yuan by wind. According to the calculation of the announcement, the company realized a net profit attributable to the shareholders of the parent company of RMB 2.746 ~ 3.246 billion in the fourth quarter of 2021, with a month on month increase of 202.42% ~ 257.49%. The main reasons for the sharp rise in the company’s performance are as follows: 1) the prosperity of the coal industry continues to improve and the coal market price continues to rise. According to wind data, the average price of Datong q6000 thermal coal in 2021 was 876 yuan / ton, a year-on-year increase of 98%, and the average price in the fourth quarter of 2021 was 1171 yuan / ton, an increase of 21% over the third quarter. 2) The company comprehensively implemented lean management, scientifically controlled costs, moderately released advanced production capacity, ensured energy supply, and greatly optimized asset quality.
The sales model fully releases the performance elasticity. Although part of the company’s output will be guaranteed in the fourth quarter of 2021, the company’s price elasticity is still fully released. According to the company’s exchange on the SSE e interactive platform, “the company’s sales department has formulated a price mechanism for self-produced coal products under the overall consideration of coal quality characteristics, index changes, peer price adjustment, customer demand and other variables of different products, calculates the price base according to the latest research data in the late part of each month, and determines the final price according to different types of customers”. The company’s pricing mechanism is flexible and closely tracks the market, so it fully shares the dividends from the rise of coal prices.
Strictly control trade risks and the gross profit margin is expected to increase. According to the announcement, the company achieved 52.4228 million tons of commercial coal sales in the first three quarters of 2021, a year-on-year decrease of 36.27%; 29.3785 million tons of commercial coal were produced, with a year-on-year decrease of 1.39%. Therefore, it is expected that the decline of the company’s coal sales is mainly due to the decline of trade coal volume. Due to the low gross profit margin of trade coal, the decline of the company’s trade volume is conducive to the decline of trade risk on the one hand and the increase of the company’s gross profit margin of coal business on the other hand.
Investment suggestion: it is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 4.802 billion yuan, 6.052 billion yuan and 6.443 billion yuan, equivalent to EPS of 2.42/3.05/3.25 yuan / share respectively, and the PE corresponding to the closing price on January 20, 2022 will be 4 times, 3 times and 3 times respectively, with low valuation in the industry. For the first coverage, give a “recommended” rating.
Risk tip: coal prices have fallen sharply, and the construction progress of new energy projects is less than expected.
