Pingmei Coal Co., Ltd. (601666): Low valuation of sustained and stable performance
The company is a leading coking coal company in South Central China.
The company’s main coking coal resources are low ash, low sulfur, low phosphorus, and incorporation, which is scarce.
The company owns a total of 14 coal mines and 1 Niuzhuang mine field to be delineated. The existing company mines have a total of 3410 ownership of approved production capacity and 3289 equity capacity replacement.
The company is the largest coking coal production enterprise in Central and South China. It is located in southern Henan, and is adjacent to Central and South China. It is a leading coking coal enterprise in Central and South China.
In recent years, through the scarcity of coking coal supply, the company actively adjusted the company’s product structure to increase coking coal output. The coking coal washing rate increased from 20% in 2015 to 36% at the end of the third quarter of 2019, which is close to the industry’s advanced level.
60% of the company’s coking coal products are mainly coking coal, and the quality is comparable to that of Australia’s Fengjing Mine. It ranks 成都桑拿网 among the world’s highest quality and has excellent resource endowments.
The stable sales volume and price of coal promoted the company’s stable profitability.
The supply of coking coal in central China is insufficient, the company’s coking coal resources are scarce, and the long and continuous company’s coking coal debris is easy to rise and fall, maintaining a high level.
As the company’s coking coal sales ratio exceeds 70% and the rest is used by the group’s internal coking plant, the company’s coking coal sales price has remained stable.
In terms of thermal coal sales, the remaining coal is mainly sold locally because about 40% of the coal passes through the two power plants in the Changxie supply area.
Benefiting from the “coal power and electricity mutual protection” policy of Henan Province, the company ‘s 上海夜网论坛 thermal coal has basically remained stable, making the company ‘s gross coal profit margin relatively stable.
The company’s market competition in East China and Central China is low, and its monopoly advantage is obvious. The stability of the coal sales volume and price promotes the company’s relatively stable profit.
Benefiting from the reform of state-owned enterprises, the listing of the Group’s coal coke assets is expected.
The company’s strategic positioning has changed to focus on strengthening its main business and deepening the company’s coal coke industry chain.
Since 2016, the company’s merger will have new energy projects or transfer or cease unrelated to the main industry’s coal coke industry. The reorganized company will continue to acquire and integrate the Group’s high-quality industrial chain assets, reduce related-party transactions with the parent company, and continue to deepen the industrial chain operation and improve the companyCompetitiveness and risk resistance.
But because the net profit of the acquired company is not high, the company’s industrial chain integration is far from enough.
With the continuous advancement of the reform of state-owned enterprises, the reorganization of the group needs to gradually resolve the commitment of the group and listed companies to compete in the same industry, and it is necessary to further deepen the company’s coal coke industry chain strategy.
Therefore, it is expected that the Group’s 715 budget / year coal production assets and 1520 possible / year coke production capacity will be injected into listed companies.
The company repurchases shares and is optimistic about its long-term value.
The company started stock repurchase in April 2019. As of December 31, 2019, the company has repurchased 5976.
50,000 shares, accounting for 2.
531%, gradually using funds2.
This part of the repurchase shares follows the purpose of the initial announcement. The analysis is expected to be replaced internally in 2020.
The scaled share repurchase of listed companies fully shows that the controlling shareholders are optimistic about the long-term value of the company.
At the same time, the share repurchase is expected to reduce the company’s share capital, which is conducive to the company’s increase in thickness and earnings, and is beneficial to the company’s gradual realization.
Investment suggestion: Given the company’s obvious location advantage and the lowest relatively stable schedule, the analysis shows that the company’s performance is relatively stable. We maintain our profit forecast unchanged. It is expected that the company’s EPS for 2019-2021 will be 0.
50 yuan, 0.
53 yuan and 0.
49 yuan; corresponding PE is 8.
4 times, 7.
9 times and 8.
6 times. From the perspective of estimation, the company and other comparable coking coal companies conducted valuation comparison analysis, and the company’s valuation was undervalued.
Taking the five major coking coal companies of A shares as the benchmark, the average PE from 2019 to 2021 is 10.
5 times, 10.
4 times, 10.
3 times, and the company’s PE discount range in 19-21 years is as high as 25%, 31% and 20%; static PB estimation angle, the average PB of coking coal company is 0.
85 times, while the company PB is only 0.71 times, a discount of 20%, which has great investment value. We once again highlight the company’s “Buy” rating.
Risk warning: the decline in the macro economy has led to a decrease in coal demand and the company’s coal product prices have fallen.