Huaibei Mining (600985) Annual Report 2018 Review: Consumer Coking Coal Leads to Outperform by Performance
Matters: The company released its 2018 annual report. Operating data showed that the company realized a net profit of 35.
49 ppm, an increase of 23 in ten years.
In terms of different businesses, the company achieved a gross profit of US $ 11.1 billion after completing the internal deduction, an increase of 4 years.
36%; of which coal contributed 57 trillion, an increase of 17.
74%; coal chemical industry contributed 4.5 billion yuan, a year-on-year increase of 58.
59%; other (mainly trade business) contributes $ 1 billion, growing by 2 per year.
Comment: Coal business: prices have risen steadily, production growth has dragged down gross profit, and high profits are expected.
Leading to the geographical advantage of the consumption hinterland, the company’s ton coal revenue increased by 20 yuan / ton in 2018; but at the same time, due to the impact of production, the conversion of Q3 ton coal cost has dragged on the increased ton coal cost, resulting in gross profit per ton of coalIt fell by 21 yuan / ton, and the gross profit margin and gross profit accumulation including coal business have improved.
However, from the analysis of the annual time scale, there will be a significant reduction in the coking coal supply end in 2019, while the demand side blast furnace production is protected by electric furnaces, and the demand for double coke is stable. Coking coal will become the most profitable alternative in the coal coke steel industry chain.The coking coal faucet in the consumer area is expected to fully benefit, and the ROE is expected to remain near 20%.
Coking business: In 2018, both volume and price went up and contributed huge profits.
The company held 88% of its 220 initial coke production capacity in 2018, contributing 100-inch production growth.
Fundamentally speaking, benefiting 南京桑拿网 from Jiangsu’s de-capacity and environmental supervision by the Fenwei Plain, the average annual coke has been temporarily extended to 273 yuan / ton, so coking has contributed to the best profit from supply reform.
In the environment where the coking coal’s strong steel profits are shrinking in the future, coking profits will return to the normal level in 2017.
Because of its location in the hinterland of consumption, if the coking industry carries out in the future4.
Withdrawing from the 3m coke oven and upgrading the industry, the company is expected to fully benefit.
The company’s leaders have a positive attitude, and their dividends and operating targets for 2019 have exceeded expectations.
The market’s dividends for the company have been in the range of 10% -30%. The company’s top dividends this time, the 佛山桑拿网 return rate reached 4.
28%, slightly more than expected.
Specifically, the company’s business goals for 2019 clearly stated how to stabilize local production indicators and set the profit scale to 44.
80 ppm, basically unchanged from 2018.
In the period of cyclical downturn, the company is good at taking advantage of its resource endowment and location advantage, and still focuses on clear confidence and positive attitude towards 2019 operations.
The disturbance of imported coking coal is normal, and the company is expected to become a direct beneficiary.
Since the coal import market involves many other factors, since 2019, the Australian coal import clearance, which has been a structural supplement for coking coal supply, has been slow. Although the number of customs declarations for Mongolian coal has recovered, it is still not ideal, and the disturbance of imported coal is undergoing normalization.
The company is located in the hinterland. East China and South China are all in the coverage area. It is the lowest cost alternative to Australian coal and helps directly benefit from the disturbance of imported coking coal.
Investment suggestion: According to our prediction of the coal price hub, the company’s performance for 2019-2021 will be slightly adjusted, and the EPS will be 1 from the original forecast value.
67 and 1.
84 yuan adjusted to the current 1.
56 and 1.
63 yuan, still maintained at 15.
The target price of 80 yuan, maintain the “strong push” level.
Risk warning: scrap prices have fallen sharply; the broader market has fallen more than expected.