Investment Rating - The investment rating for the company is "Buy - A / Buy - H" [1] Core Views - In Q1, the company's net profit attributable to shareholders decreased by 14.7% year-on-year, but its performance stability is better than peers. The company reported a net profit of 15.88 billion yuan, with a year-on-year decline of 14.7% and a quarter-on-quarter increase of 39.0%. The net profit excluding non-recurring items was 16.46 billion yuan, down 11.2% year-on-year but up 9.3% quarter-on-quarter [2] - The coal segment's profit declined, while the transportation and power generation segments saw profits increase by over 10% year-on-year. In Q1, the company produced 81.3 million tons of commodity coal, a year-on-year increase of 1.5%, and sold 80.3 million tons, up 1.1% year-on-year. The revenue per ton of self-produced coal was 533 yuan, down 6.8% year-on-year, while the cost per ton was 297 yuan, up 2.5% year-on-year [2] - The company's operational model is robust, with expected growth in coal and electricity businesses through internal projects and acquisitions. The dividend payout ratio has significantly increased since 2017, with a planned cash dividend ratio of no less than 60% for 2022-2024, and a proposed dividend ratio of 75.2% for 2023 [2] Financial Summary - The company’s revenue for 2024 is projected to be 332.99 billion yuan, a decrease of 2.9% from 2023. The net profit attributable to shareholders is expected to be 61.41 billion yuan, reflecting a growth of 2.9% from 2023. The EPS for 2024 is estimated at 3.09 yuan per share [3] - The company’s EBITDA for 2024 is forecasted to be 114.66 billion yuan, with a P/E ratio of 12.80. The ROE is expected to be 14.2% [3]

Summary of the Conference Call for China Shenhua Energy Co., Ltd. Company Overview - The conference call involved **China Shenhua Energy Co., Ltd.**, a leading company in the coal industry, discussing its performance and market outlook for 2024 [2][3]. Key Points and Arguments 1. **Market Valuation and Growth**: - The analyst expressed confidence in China Shenhua's long-term market value, initially estimating it at over **500 billion** in 2020, which was quickly achieved. The target was later raised to **1 trillion**, with the current market value around **800 billion**, reflecting a **60% increase** [3][4]. - There is an expectation of at least **40%** more growth potential in the company's market value [4]. 2. **First Quarter Performance**: - In Q1 2024, China Shenhua reported a **1.5%** increase in coal production to **81.3 million tons** and an **8.8%** increase in coal sales to **117 million tons**. Total power generation rose by **7%** to **55.35 billion kWh** [7][8]. - The company achieved a net profit of **15.884 billion** yuan, a **14.7%** decrease year-on-year, primarily due to falling coal prices [8]. 3. **Profitability Challenges**: - The decline in coal prices impacted average sales prices and distribution profits. The average price for coal dropped by approximately **18 yuan** per ton compared to the previous year [8][9]. - Increased production costs and additional expenditures related to ecological contributions in Inner Mongolia also affected profitability [9]. 4. **Integrated Business Model**: - China Shenhua operates an integrated business model encompassing coal, electricity, transportation, and coal chemical industries, which helps mitigate cyclical risks and stabilize earnings [9]. 5. **Government Relations and Market Management**: - The company is closely monitoring government policies regarding state-owned enterprise management and market value assessments, with ongoing discussions about specific performance indicators [13][14]. - The management emphasized the importance of maintaining a competitive edge against industry and composite indices [15]. 6. **Future Outlook**: - The company anticipates continued demand for coal as a primary energy source in China, despite potential shifts towards renewable energy [20]. - There is a focus on enhancing operational efficiency and maintaining high dividend payouts, with a commitment to return at least **60%** of profits to shareholders [26][30]. 7. **Investment and Capital Expenditure**: - Future capital expenditures are expected to remain between **30 billion** to **50 billion** yuan, with significant investments in power generation and infrastructure [25][32]. - The company is exploring opportunities for asset acquisitions and new mining projects to sustain growth [29]. 8. **Environmental and Social Responsibility**: - China Shenhua is actively involved in ecological initiatives, contributing to environmental governance in Inner Mongolia, which is seen as a long-term investment in community relations [39][43]. Additional Important Content - The management highlighted the importance of balancing short-term financial performance with long-term sustainability and community engagement [41][46]. - The company is committed to transparency in its financial practices and aims to foster investor confidence through consistent communication and performance [36][37]. This summary encapsulates the key insights and discussions from the conference call, providing a comprehensive overview of China Shenhua's current status and future direction in the coal industry.

Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2][6]. Core Views - The report highlights that the coal business remains stable while the power sector shows significant profit growth. The company achieved a revenue of 87.65 billion yuan in Q1 2024, with a year-on-year increase of 0.7%. The net profit attributable to the parent company was 15.88 billion yuan, reflecting a year-on-year decrease of 14.7% but a quarter-on-quarter increase of 39% [6][7]. Summary by Sections Financial Performance - In Q1 2024, the company reported a net profit of 15.88 billion yuan, down 14.7% year-on-year but up 39% quarter-on-quarter. The non-recurring net profit was 16.46 billion yuan, down 11.2% year-on-year but up 9.3% quarter-on-quarter [6][7]. - The coal segment's self-produced coal sales volume was 8.03 million tons, with a year-on-year increase of 1.1% and a quarter-on-quarter decrease of 2.9%. The average selling price for coal was 573 yuan per ton, down 7.7% year-on-year [6][7]. - The power segment achieved a sales volume of 55.35 billion kWh, up 7% year-on-year, with a gross profit margin of 16.9%, reflecting an increase from the previous quarter [6][7]. Revenue and Profit Forecast - The company is expected to achieve net profits of 60.13 billion yuan, 60.28 billion yuan, and 61.27 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding EPS of 3.03, 3.03, and 3.08 yuan [6][7][9]. - The report anticipates stable profitability in the coal business due to a high proportion of long-term contracts, while the new power generation capacity is expected to contribute to revenue growth [6][7]. Valuation - The company is projected to have a reasonable valuation range of 42.37 to 45.40 yuan based on a PE ratio of 14 to 15 times for 2024 [6][7].

Investment Rating - Strong Buy (Maintained) with a target price of 46.8 RMB, current price at 39.00 RMB [1] Core Views - The company demonstrated resilience in coal production and sales despite a challenging environment, driven by high long-term contract coverage [1] - Coal production and sales increased by 1.5% and 8.8% YoY respectively in Q1 2024, while power generation and sales both grew by 7.0% YoY [2] - The company's diversified business model, including coal, power, transportation, and coal chemical sectors, contributed to stable performance [2] - Long-term contract sales ratio slightly declined to 81.3% in Q1 2024, down 5.3 ppts YoY, mainly due to reduced coverage of downstream power plant demand [2] - The company's high dividend payout ratio, averaging over 75% in recent years, and a current dividend yield of 5.9% enhance its investment appeal [2] Financial Performance - Q1 2024 revenue reached 87.647 billion RMB, up 0.7% YoY but down 3.3% QoQ [2] - Net profit attributable to shareholders was 15.884 billion RMB, down 14.7% YoY but up 39.0% QoQ [2] - Non-GAAP net profit stood at 16.46 billion RMB, down 11.2% YoY but up 9.3% QoQ [2] - Gross margins for coal, power, railway, port, shipping, and coal chemical sectors were 28.9%, 16.9%, 38.1%, 48.6%, 11.2%, and 6.3% respectively in Q1 2024 [2] Business Segments - Coal segment: Production and sales volumes were 81.3 million tons and 117.1 million tons respectively in Q1 2024 [2] - Power segment: Electricity generation and sales reached 55.35 billion kWh and 52.16 billion kWh respectively in Q1 2024 [2] - Transportation segment: Railway transportation volume increased by 10.1% YoY to 82 billion ton-kilometers in Q1 2024 [2] - Coal chemical segment: Polyethylene and polypropylene sales volumes were 89,500 tons and 82,700 tons respectively, down 1.8% and 3.9% YoY [2] Growth and Expansion - The company is actively expanding its coal production capacity through acquisitions, with two ongoing projects expected to add 20.7 million tons/year of production capacity and 1.33 billion tons of remaining recoverable reserves [2] - In the power sector, the company added 167 MW of new generating capacity in Q1 2024, representing 0.3% of its total installed capacity [2] Market Outlook - Thermal coal prices rebounded in mid-April 2024, with two consecutive increases totaling 15 RMB/ton, stabilizing at 840 RMB/ton [2] - The report anticipates potential price increases in Q3 2024, driven by seasonal demand from the coal chemical sector during the "Golden September and Silver October" period [2] Valuation and Forecast - The report adjusts the company's net profit forecast for 2024-2026 to 62.076 billion RMB, 64.001 billion RMB, and 64.813 billion RMB respectively [2] - The target price of 46.8 RMB is based on a 15x PE multiple for 2024, reflecting the company's historical valuation and dividend yield levels [2]

Financial Performance - In 2023, China Shenhua achieved a net profit attributable to shareholders of CNY 59.7 billion, with basic earnings per share of CNY 3.004 [1] - The company reported a coal sales volume of 450 million tons, a year-on-year increase of 3.5% [1] - The total power generation reached 212.3 billion kWh, reflecting an 11% year-on-year growth [2] Operational Highlights - The coal division's profit totaled CNY 58.53 billion, while the power generation division's profit increased by 34.1% to CNY 10.64 billion [2] - The average selling price of coal was CNY 584 per ton [2] - The company maintained a low production cost of CNY 179 per ton for self-produced coal, with a year-on-year increase of 1.5% [2] Strategic Initiatives - The company is focusing on enhancing energy security and integrated operations, with a production capacity increase of 3 million tons approved for Baode coal mine [2] - Investments in technology and digital development led to 763 patents granted and 51 awards received in 2023 [2] - The company is actively pursuing clean development initiatives and has established a low-carbon development group [3] ESG and Governance - China Shenhua has been proactive in ESG management since 2007, with ongoing improvements in governance and information disclosure [3] - The company aims to align its market value with intrinsic value through effective market management strategies [7] Capital Expenditure and Cash Management - The capital expenditure for 2024 is planned at approximately CNY 36.8 billion, consistent with previous levels [5] - As of the end of last year, the company had cash reserves of about CNY 150 billion and a debt-to-asset ratio of 24.1% [5] Shareholder Returns - The cash dividend payout ratio for 2023 is proposed at 75.2%, exceeding the minimum commitment of 60% [6] - The company is committed to sustainable and high-level returns for shareholders, with plans for a new three-year shareholder return strategy [6]

Investment Rating - The report maintains a "Buy" rating for the company [5][8][18] Core Views - The company reported a revenue of 87.65 billion yuan for Q1 2024, a year-on-year increase of 0.7%, but a quarter-on-quarter decrease of 3.3% from Q4 2023. The net profit attributable to shareholders was 15.88 billion yuan, a decrease of 14.7% year-on-year, but an increase of 39% quarter-on-quarter [5][8][14] - The coal production volume increased by 1.5% year-on-year to 81.3 million tons, while the sales volume rose by 8.8% to 117.1 million tons. However, the average selling price of coal decreased by 6.8% year-on-year to 533 yuan per ton, leading to a decline in gross margin [5][10][12] - The power generation segment saw significant growth, with power generation increasing by 7.0% year-on-year to 55.35 billion kWh and sales revenue rising by 5.26% to 24.075 billion yuan [5][14][15] - The company has a strong cash position, with total cash and financial assets amounting to 177.24 billion yuan as of the end of Q1 2024, reflecting a 10.95% increase from the end of 2023 [16][17] Summary by Sections Market Data - Closing price: 39.55 yuan - One-year high/low: 42.57/27 yuan - Price-to-book ratio: 1.8 - Dividend yield: 6.52% [2][3] Financial Performance - Q1 2024 revenue: 87.65 billion yuan, up 0.7% year-on-year - Q1 2024 net profit: 15.88 billion yuan, down 14.7% year-on-year - Basic earnings per share: 0.8 yuan [5][8][18] Coal Business - Q1 2024 coal production: 81.3 million tons, up 1.5% year-on-year - Q1 2024 coal sales: 117.1 million tons, up 8.8% year-on-year - Average selling price: 533 yuan/ton, down 6.8% year-on-year - Coal gross margin: 28.9%, down 4.82 percentage points year-on-year [5][10][12] Power Generation - Q1 2024 power generation: 55.35 billion kWh, up 7.04% year-on-year - Q1 2024 sales revenue from power: 24.075 billion yuan, up 5.26% year-on-year - Gross profit from power generation: 4.073 billion yuan, up 10.38% year-on-year [5][14][15] Cash Position - Total cash and financial assets: 177.24 billion yuan, up 10.95% from the end of 2023 [16][17]

Investment Rating - The report maintains an "Accumulate" rating for China Shenhua (601088.SH) [1][3] Core Views - The company's revenue showed a slight increase due to growth in power generation and transportation, while coal price decline negatively impacted performance [1][4] - China Shenhua is recognized as a leading integrated energy enterprise based on coal, with strong business synergy across seven segments, stable performance, and attractive dividend returns [1][12] Summary by Sections Financial Performance - In Q1 2024, the company achieved revenue of 87.65 billion yuan, a year-on-year increase of 0.7%, while net profit attributable to shareholders was 15.88 billion yuan, down 14.7% year-on-year [1][4] - The decline in profit was primarily due to falling coal prices, despite an increase in business volume in power generation and railway transportation [1][4] Coal Segment - The company produced 81.3 million tons of coal in Q1 2024, up 1.5% year-on-year, and sold 117.1 million tons, an increase of 8.8% year-on-year [1][7] - The average selling price for self-produced coal was 533.3 yuan/ton, down 39.1 yuan/ton year-on-year, while the production cost increased to 190.6 yuan/ton, up 21.2 yuan/ton year-on-year [1][7] Power Segment - Total power generation reached 55.35 billion kWh in Q1 2024, a 7.0% increase year-on-year, with total sales also increasing by 7.0% to 52.16 billion kWh [1][10] - The average selling price for electricity was 409 yuan/MWh, down 2.6% year-on-year, while the unit cost of electricity sales decreased to 364.8 yuan/MWh, down 3.0% year-on-year [1][10] Transportation Segment - Revenue from the railway, port, and shipping segments grew by 5.9%, 5.6%, and 7.4% year-on-year, respectively, with improvements in gross margins [1][10] - The company made significant progress in various projects, including the successful launch of heavy-load trains and the decision to invest in new coal loading facilities at Huanghua Port [1][10] Investment Forecast - The report maintains profit forecasts, expecting net profits attributable to shareholders to be 60.2 billion yuan, 61.1 billion yuan, and 61.5 billion yuan for 2024, 2025, and 2026, respectively [1][12]

Investment Rating - The investment rating for the company is "Buy" (maintained) with a market price of 39.55 CNY [1]. Core Views - The report highlights that the company achieved a revenue of 87.65 billion CNY in Q1 2024, representing a year-on-year growth of 0.70% and a quarter-on-quarter decrease of 3.27%. The net profit attributable to shareholders was 15.88 billion CNY, a year-on-year decrease of 14.66% but a quarter-on-quarter increase of 39.03% [5][6]. - The company forecasts revenues of 344.08 billion CNY, 353.30 billion CNY, and 358.87 billion CNY for 2024, 2025, and 2026 respectively, with net profits of 63.52 billion CNY, 65.09 billion CNY, and 67.03 billion CNY for the same years [7]. Financial Performance Summary - **Revenue and Profit Forecasts**: - 2022A: Revenue of 344.53 billion CNY, Net Profit of 69.63 billion CNY - 2023A: Revenue of 343.07 billion CNY, Net Profit of 59.69 billion CNY - 2024E: Revenue of 344.08 billion CNY, Net Profit of 63.52 billion CNY - 2025E: Revenue of 353.30 billion CNY, Net Profit of 65.09 billion CNY - 2026E: Revenue of 358.87 billion CNY, Net Profit of 67.03 billion CNY [2][3]. - **Earnings Per Share (EPS)**: - 2024E: 3.20 CNY - 2025E: 3.28 CNY - 2026E: 3.37 CNY [7]. - **Price-to-Earnings (P/E) Ratio**: - 2024E: 11.9X - 2025E: 11.6X - 2026E: 11.2X [7]. Operational Highlights - **Coal Production and Sales**: - Q1 2024 coal production reached 81 million tons, a year-on-year increase of 1.50%, while sales reached 117 million tons, a year-on-year increase of 8.83% [6]. - The average selling price for coal in Q1 2024 was 573 CNY/ton, a year-on-year decrease of 7.73% [6]. - **Electricity Generation**: - Total electricity generation in Q1 2024 was 55.35 billion kWh, a year-on-year increase of 7.04% [7]. - The selling price for electricity was 409 CNY/MWh, with a selling cost of 365 CNY/MWh, resulting in a gross profit of 44 CNY/MWh [7]. Market Capitalization - The company's market capitalization is approximately 785.80 billion CNY, with a circulating market value of about 652.22 billion CNY [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights stable coal production and sales, with increased profitability in electricity and railway sectors [1][3] - The company reported a total revenue of 87.65 billion yuan in Q1 2024, a decrease of 3.3% quarter-on-quarter but an increase of 0.7% year-on-year [2] - The net profit attributable to shareholders was 15.88 billion yuan, up 39.0% quarter-on-quarter but down 14.7% year-on-year [2] Summary by Sections Electricity Sector - Total electricity generation reached 55.35 billion kWh in Q1 2024, a year-on-year increase of 7% [3] - Total electricity sales were 52.16 billion kWh, also up 7% year-on-year [3] - Average selling price for electricity was 409 yuan/MWh, down 2.6% year-on-year [3] - The electricity segment's revenue and costs increased by 5.3% and 4.3% year-on-year, respectively, with a total profit of 3.188 billion yuan, up 11.1% year-on-year [3] Railway and Other Businesses - Railway transportation turnover increased by 10.1% year-on-year to 82 billion ton-km [3] - Port loading volume was 6.5 million tons, up 8.2% year-on-year [3] - Shipping volume decreased by 1.2% year-on-year, while shipping turnover increased by 3.1% year-on-year [3] Coal Sector - Coal production was 81.3 million tons, a slight decrease of 1.5% quarter-on-quarter but an increase of 1.5% year-on-year [5] - Coal sales reached 117 million tons, a decrease of 0.3% quarter-on-quarter but an increase of 8.8% year-on-year [5] - The average selling price of coal was 573 yuan/ton, down 7.7% year-on-year [5] - The coal segment's total profit was 13.41 billion yuan, down 23.0% year-on-year [5] Financial Projections - Revenue projections for 2024-2026 are 363.5 billion, 376.5 billion, and 390.8 billion yuan, respectively, with net profits of 60.84 billion, 63.26 billion, and 65.28 billion yuan [6][8] - The estimated EPS for 2024-2026 is 3.06, 3.18, and 3.29 yuan, respectively [8] - The current P/E ratio is projected to be 12.92 for 2024, decreasing to 12.04 by 2026 [8]

证券研究报告 非煤业务盈利提升，一体化优势稳健经营 公司研究 [Table_ReportDate] 2024年 4月 28日 公司点评报告 事件：2024年4月26日，中国神华发布2024年一季报。2024年第一季度公 中国神华(601088) 司实现营业收入876.47亿元，同比增长0.7%，实现归母净利润158.84亿元， 投资评级 买入 同比下降14.7%；扣非后净利润164.60亿元，同比下降11.2%。经营活动现金 流量净额285.53亿元，同比下降2.2%；基本每股收益0.799元/股，同比下降 上次评级 买入 14.7%。资产负债率为23.57%，环比下降0.52pct。 点评：  煤炭板块：销量微增价格下降，成本端有所增长，导致盈利回落 2024年第一季度公司实现煤炭产量0.813亿吨，同比增长1.5%，煤炭销 左前明 能源行业首席分析师 量1.17亿吨，同比提升8.8%。从销售结构来看，2024年Q1年度长协、 月度长协、现货销售占比为50.0%、31.3%、13.8%，其中，年度长协占比 执业编号：S1500518070001 同比下降 7.5 个 pct。从销售价格来看，公司年度长协价 ...