Xishan Coal and Electricity (000983): The company’s stable operation and national reform can be accelerated

Xishan Coal and Electricity (000983): The company’s stable operation and national reform can be accelerated
Event: On April 23, 2018, Xishan Coal and Electricity issued the 2018 annual report, and the company achieved operating income of 322 in 2018.71 ppm, an increase of 12 per year.62%; total profit 32.30 ppm, an increase of 20 per year.39%; net profit attributable to mother 18.2 billion, an increase of 14 every year.87%; net profit after excluding non-recurring gains and losses.40 ‰, an increase of 10 per year.72%; net cash flows from operating activities 71.56 ppm, an increase of 31 per year.67%; basic profit income is 0.5.7 billion; the company plans to pay a cash dividend of RMB 3 (tax included) for every 10 shares, with a dividend payout ratio of 52.48%, according to the closing price on April 25, Xishan Coal Power Replacement Replacement4.26%. On April 23, 2018, Xishan Coal and Electricity issued the 2019 first quarter report, which stated that the company achieved operating income of 85.10 ‰, an increase of 16 per year.59%; total profit 9.47 ppm, an increase of 12 per year.15%; net profit attributable to mother 5.94 ppm, an increase of 15 per year.79%; net profit after excluding non-recurring gains and losses.96 ppm, an increase of 14 per year.84%; net cash flow from operating activities14.28 ppm, a reduction of 27 per year.45%; basic return 0.1.9 billion. Comments: Both the volume and price of coal business rose, driving the company’s 2018 performance growth.In 2018, the company’s coal production and sales increased significantly. Initial production of raw coal above 2745 increased by 247 roots every time (9.89%); sales of commercial coal 2561 attachments, an increase of 176 indicators per year (7.38%).Achieved average coal sales price of 674.68 yuan / ton, an increase of 11 in ten years.45 yuan / ton (1.73%).In terms of product structure, the company’s coking coal accounts for 9%.37% (0 per year).31 pct), the proportion of fat coal is 15.15% (one year increase 0.18 pct), with lean coal accounting for 7.73% (an increase of one year.06 pct), gas-fired coal accounts for 14.53% (down one year.57 pct), raw coal accounts for 8.24% (an increase of 2 per year.03 pct), washing and mixing coal accounted for 40.61% (down 3 a year.63 pct).In 2018, the company’s coal segment achieved operating income of 172.79 trillion, an increase of 14 in ten years.6.4 billion (9.26%); gross profit 96.08 million yuan, an increase of 4 in ten years.9.4 billion (5.42%), with gross profit accounting for 93.68%; gross margin 55.61% downgraded by 2 every year.02 averages.Overall, the company’s coal business volume and price rose, the proportion of coking coal stabilized, and the increase in the profitability of the coal sector drove the company’s 18-year performance. The scarcity of coking coal resources is good for the company’s long-term development.Most of the domestic coal mines producing coking coal have poor production conditions and reduced production capacity. They have been largely cleared from the supply-side reforms since 2016, and the products of newly-built coal mines are mainly thermal coal. Coking coal supply has contracted in the medium and long term.the trend of.Since this year, China’s supply of coking coal, which restricts imports, has further tightened, and the Chinese government’s counter-cyclical adjustment policy will keep the steel industry’s concentrated coal demand stable.With sufficient supply and steady demand, we believe that the price of coking coal, especially high-quality coking coal, will remain at a high level for a long time.In 2018, the company’s coal business accounted for 厦门夜网 93% of gross profit.68%, coking coal sales accounted for 46.78%, the main coking coal in the Gujiao mining area where the company’s main production area is located. The fat coal has the advantages of low ash, low sulfur, and good coking. The company is in an important position in the supply of domestic coking coal, especially high-quality coking coal.Therefore, the scarcity of coking coal will greatly benefit the company’s development. Shanxi state-owned enterprise reform is on its way, and the company will be the core beneficiary.On April 15, 2019, the Shanxi Provincial Deepening State-owned Enterprise Reform Conference was held in Taiyuan. Following the “tough year” in 2018, the Shanxi SASAC identified 2019 as the “decisive year” for the reform of state-owned enterprises in Shanxi Province.It was suggested that Shanxi this year will vigorously implement the “listed company +” strategy and strive to achieve an overall listing. There are two “zero breakthroughs” in the listing of new shares. Existing listed companies should strengthen market value management and gradually increase the asset securitization rate.At present, Shanxi Coking Coal Group’s asset securitization rate is about 24%. As the only coal listed company of Shanxi Coking Coal Group, the company’s coal production accounts for only 26%, which is the best platform for the group and its coal business to achieve overall listing. Earnings forecast and rating: We expect the company’s EPS for 2019-2021 to be 0.63 yuan, 0.65 yuan, 0.67 yuan, currently expected 7.05 yuan (the closing price on April 25), the corresponding price-earnings ratio is 11, 11 and 11 times.Considering the company’s resource advantages and the expectations of state-owned enterprise reform, we maintain the company’s “Buy” rating. Preliminary catalyst factors: Economic growth exceeded expectations; coal industry supply-side reform exceeded expectations; the company’s state-owned enterprise reform progress exceeded expectations. Risk factors: economic downturn, sluggish demand; security accident risk.