HYMD(SH:600971) Haitong Securities·2024-07-18 09:31Investment Rating - The report assigns an investment rating of "Outperform the Market" for the company [72]. Core Viewpoints - The company, established in 1994 and listed in 2004, primarily engages in coal mining, washing, transportation, sales, and production services, with over 90% of its revenue derived from coal [5][8]. - The company has a stable financial position with cash flow being relatively abundant, and it has no significant capital expenditure plans aside from ongoing projects [12]. - The coal production capacity is 10.95 million tons per year, with recoverable reserves of 560 million tons as of 2023 [13][43]. - The company has seen a stable coal output in Anhui province, maintaining around 11 million tons since 2018, with a slight increase to 11.2 million tons in 2023 [15]. - The average selling price of coal in 2023 was 958 RMB/ton, reflecting a decrease from previous years [48]. - The company is expanding its renewable energy initiatives, including wind and solar projects, to enhance its green energy portfolio [30][58]. Financial Analysis - The company's coal business generated a gross profit of 3.526 billion RMB in 2023, with a gross margin of 46.67%, showing a year-on-year increase of 4.15 percentage points [53]. - The electricity segment reported a revenue of 46.83 million RMB in 2023, with a net profit of 6.22 million RMB from its investment in the Suzhou Thermal Power Company [56]. - The company has a total debt to EBITDA ratio that indicates a manageable level of debt [64]. Revenue and Profitability - The coal segment is projected to generate revenues of 8.14 billion RMB in 2024, with a slight decline expected in the following years [66]. - The electricity segment is expected to maintain stable revenues, contributing to the overall profitability of the company [66]. Market Position - The company holds a strong market position in Anhui province, benefiting from its proximity to economically developed regions, which enhances its transportation efficiency [46]. - The company has established long-term strategic partnerships with major customers in the power, steel, and chemical industries [46].