Shaanxi Coal Industry Co., Ltd. (601225) Company Research: Earnings Historical High Estimates Need to be Repaired

Shaanxi Coal Industry Co., Ltd. (601225) Company Research: Earnings Historical High Estimates Need to be Repaired
Event: The company releases its 2019 annual results.In 2019, the company achieved operating income of 73.4 billion yuan, an increase of 28 year-on-year.3%; net profit attributable to mothers was RMB 1.16 million, a year-on-year increase of 5.5%.  The net profit attributable to mothers in 2019 reached a record high, exceeding market expectations.In 2019, the company focused on long-term development and steadily improved its overall operating quality, achieving a net profit of $ 11.6 billion attributable to mothers, surpassing growth5.5%, a record high.Looking at the quarter, the company Q1?Q4 achieved operating revenues of 14.4 billion, 18.2 billion, 18.2 billion, and 226, respectively.4.8 billion, realized 2.8 billion (-2.4%), 310,000 yuan (-0.2%), 3.2 billion (+ 10%), 2.5 billion (+ 18%).  In Q4, coal production and sales in a single season reached a record high. In terms of grain, the company actively adopted a variety of breakthrough measures to overcome the impact of the mine disaster in early 19th to ensure stable and orderly growth of grain.In 2019, the company achieved a total of 1 coal output.1.5 billion tons, an annual increase of 6.4%, a new high since 15 years.Looking at the quarter, the company Q1?Q4 realized the output of 2396 choices (-5.1%), 2974 expected (+8.3%), budget 2981 (+ 9%), budget 3149 (+12.3%), in which Q4 single season output reached a record high; in terms of sales volume, the company has steadily 北京夜网 expanded its coal trading business and has continued to expand its market influence in the central regions such as “two lakes and one river”.The company’s annual coal sales in 20191.7.7 billion tons, an increase of 23 in ten years.8%, a record high.Looking at the quarter, the company Q1?Q4 achieved sales of 3383 (+ 9%) and 4347 (+26).5%), 4611 growth rate (+ 26%), 5359 interest rate (+ 31%), of which Q4 single-quarter sales hit a record high.  Phoenix Nirvana, Xiaobao when the Nuggets show strength.Since the supporting coal washing plant of Xiaobaodang has not been put into production, the Air Force can only sell it in the form of raw coal (calorific value 4800?5000 kcal), reducing the low side, only about 280?320 yuan / ton.At present, all Xiaobaodang supporting coal washing plants have been put into operation. After the raw coal 无锡夜网 is washed and processed, the coal quality and a small amount of coal are improved.It is reported that the West Coal Trading Center reported that in the auction results on February 10, the Xiaobaodang “blended coal” had a calorific value of 5600 kcal, with a quantity of 413 yuan / ton, and a “washed block” calorific value of 6,000 kcal, up to 497Yuan / ton.Taking into account the annual production capacity of Xiaobaodang in 1500, it is conservatively estimated that the company will increase its net profit by nearly 10 billion in 2020.  The epidemic situation has a small impact on the company’s operations.Affected by the epidemic after the holiday, although the resumption date of upstream coal mines is generally extended, it mainly affects private coal mines. Because domestic coal mines are responsible for guaranteeing supply tasks and supporting railway transportation, production and sales are basically not affected.According to the Yulin Coal Trading Center, the company’s mines have all resumed production.Considering that there were also mining disasters in early 19th, we expect the company’s coal production in Q1 20 to be flat last year.In addition, this round of epidemic caused the contraction of upstream coal supply to be greater than the demand, and the impact of import substitution, after the holiday thermal coal increased by about 12 yuan / ton.  Earnings forecasts and investment advice.What do we expect the company to do in 2019?In 2021, the net profit attributable to mothers will be 116 trillion, 111 trillion, and 114 trillion, respectively, and the EPS will be 1.16.1.11, 1.14 yuan, corresponding to PE is 6.7, 7.1, 6.9.At present, the company estimates and institutional positions are at an historically low level, with a very high margin of safety. Against the background of a continued friendly fiscal and monetary policy environment, they are optimistic about its valuation repair and maintain an “overweight” rating.  Risk reminder: The coal price has fallen sharply, the company has suffered a mining disaster, and Xiaobaodang’s commissioning progress has fallen short of expectations.