兖煤澳大利亚：Higher coal price assumptions after the fire incident at Grosvenor coal mine

Investment Rating - The report maintains a BUY rating for Yancoal Australia with a revised target price (TP) of HK$45, up from HK$40, indicating a potential upside of 17.3% from the current price of HK$38.35 [2][12]. Core Insights - The suspension of the Grosvenor metallurgical coal mine due to a fire incident is expected to last several months, leading to a reduction in global metallurgical coal export volume by approximately 0.8$152 per tonne in Q1 2024, but is expected to stabilize following the Grosvenor incident [2]. - Yancoal's total marketable coal production for 2024E is estimated at 49.5 million tonnes, with a sales volume of 37.3 million tonnes, including 32.1 million tonnes of thermal coal and 5.2 million tonnes of metallurgical coal [5][6]. - The average selling price for thermal coal is projected to be AUD 170 per tonne, while metallurgical coal is expected to average AUD 270 per tonne in FY24E [5]. Valuation and Assumptions - The valuation is based on net present value (NPV) calculated from future cash flows of reserves, with long-term price assumptions for thermal and metallurgical coal set at AUD 130/t and AUD 200/t respectively starting in 2027E [12]. - The report assumes a weighted average cost of capital (WACC) of 6.9% and an AUD/HKD exchange rate of HK$5.27 [12]. Share Performance - Yancoal's share price has shown significant performance, with a 1-month increase of 18.0$50,638.9 million, with an average turnover of HK$69.9 million over the past three months [3]. Peer Comparison - Yancoal's P/E ratio of 6.5x for FY24E is competitive compared to peers, with Whitehaven Coal at 9.0x and New Hope Corporation at 8.0x [14]. - The dividend yield for Yancoal is projected at 7.7%, which is attractive compared to the average yield of 5.0% for its peers [14].