China Shenhua (601088): The first-quarter report surpasses expectations and highlights the advantages of coal-electricity integration

China Shenhua (601088): The first-quarter report surpasses expectations and highlights the advantages of coal-electricity integration

Event: On April 26, 2019, the company released its first quarter performance report, stating that the report consolidated and the net profit attributable to the parent company owner was 125.

8.7 billion, a year-on-year increase of 8.

20%; operating income is 570.

110,000 yuan, a decrease of 9.


Opinions in the first quarter report exceeded expectations: in the first quarter of 2019, the company created a net profit attributable to owners of the parent company of 125.

8.7 billion, a year-on-year increase of 8.

20%, an increase of 46 from the previous quarter.


Gross profit margin was 42%, an increase of 1 over the same period last year.

9 units.

Increase by 1 from the previous quarter.

91 digits.

The cost of purchased coal dropped, and the gross profit margin of the coal business increased slightly: in the first quarter of 2019, the company produced 7,150 commercial coal each year, a decrease of 0.


The sales of commercial coal 10,510 was the highest, falling 3% every six months, and the comprehensive bid was 411 yuan / ton, down 6 per year.


Among them, the annual long-term association was 5,100 in ten years, with an increase of 5 in ten years.

2%, accounting for 48 of total sales.

5%, accounting for 70% of self-produced coal production.

The annual long-term association coefficient is 361 yuan / ton, exceeding the decline by 3.


Monthly long-term association sales are 4,290, an annual increase of 10.

3%, accounting for 40 of total sales.

8%, with a purity of 471 yuan / ton, a drop of 11 over.


Spot coal sales are 1120 per year, a decline of 46 over.

7%, accounting for 10 of total sales.

7%, priced at 369 yuan / ton, exceeding the decline of 8.


Calculate the total cost of sales per ton of coal 302.

03 yuan / ton, down 6 before.

87%, while it was announced that the cost of production from self-produced coal was 114.

3 yuan / ton increased to 117.

0 yuan / ton, an increase of 2.

4%, so the decline in cost is mainly due to the reduction in the cost of purchased coal.

Coal achieved business gross margin of 28.
6%, increasing by 0 every year.
7 units.

In the second quarter, it is expected that the price of thermal coal will increase, and the increase in the tax rate will help the company’s tax allowance increase. The coal mines in Shaanxi will resume production, benefiting from the increase in volume and price.

Completed the completion of power 深圳桑拿网 assets with Guodian, and the profitability of the power business increased significantly: in the first quarter of 2019, the company achieved 46.4 billion kilowatt-hours of power generation, a decline of 30.

2%, sales of 436.

100 million kWh, a decline of 30 per year.


Initially, the largest decline in the amount of electricity sold is the completion of the company’s transaction with Guodian Power to form a joint venture. The company’s investment in assets related to the assembly of generators will no longer be included in the statistics.

According to comparable calibers, the company’s power generation and electricity sales increased by 1.

71% vs. 1.


The electricity price is 323 yuan / MWh, which is increased by 1 every year.

89%, the average cost of electricity sales was 261.

5 yuan / MWh, a drop of 0 a year.


Power business achieved gross profit margin23.

8%, an increase of 2.

9 units.

After the completion of asset delivery, the profit of the joint venture company is included in the investment income according to the company’s shareholding ratio, and the company recognizes the relevant investment income on the delivery date.

21 ppm; investment income from February to March is recognized in the first quarter1.

2.8 billion.

The transportation sector has made steady progress and the gross profit margin has increased: in the first quarter of 2019, the company’s railway, port and three consecutive operating indicators increased.

Of which, its own railway transportation volume is 67.

8 billion ton kilometers, down by 0 every year.

4%; the amount of coal in the port is 62.

1 million tons, an increase of 5 per year.

4%; expected freight volume 26.

4 million tons, an increase of 6% per year.

In terms of business revenue, railway revenue was 96.

500 million, the previous appreciation of 4.

5%; port revenue 13.

69 ppm, a reduction of 6 per year.

1%; long-term income 7.

5.2 billion, a decrease of 31.


Total transportation business realized revenue of 117.

710,000 yuan, a year increase and decrease of 0.


In terms of profitability, the company’s gross profit margin for railway business in the first quarter reached 64.
3%, rising by 0 every year.

1 unit; the company’s port business gross margin reached 57.
0%, a decrease of 1 year over the previous year; the company’s internal continuous business gross profit margin reached 11.

3%, a decrease of 17 from the previous year.

4 units.

The profitability of the coal chemical business improved slightly: in the first quarter of 2019, the company sold polyethylene9.

54, and polypropylene 9.

16 nominal, a total of 18.

7 Initially, increase by 7 every year.


Coal chemical business income 16.

4 ‰, an increase of 5 per year.


The cost is 12.

37 ppm, an increase of 3 per year.

9%, and finally achieved a gross profit margin of 24.

6%, an increase of 1 over the same period last year.

2 units.

Steady performance and prominent coal-electricity integration advantages: Overall, the company ‘s coal business scale and sales volume continued to decline in the first quarter of 2019, and its profit broke through.The advantages stand out.

Super High Dividend (2018 Dividend 39.

9%), high index rate (the index rate is calculated based on the market value on April 25 of 4).

5%), the company estimates that it is expected to pick up.

Investment suggestion: Maintain Buy-A investment rating. We estimate the company’s net profit for 2019-2021 to be 462.

5.6 billion, 471.

2.2 billion, 480.

95 trillion, corresponding to 2 EPS.

33 yuan, 2.

37 yuan, 2.

42 yuan.

The 6-month target price is 25.

58 yuan, equivalent to an 11 times price-earnings ratio . Risk warning: coal prices have fallen sharply, and thermal power demand has fallen short of expectations