DTCIC(SH:601001) Haitong Securities·2024-08-20 06:40Investment Rating - The report assigns an "Outperform" rating to the company [2]. Core Views - The company is a leading player in Shanxi's thermal coal sector, backed by the Jin Energy Holding Group, with significant production capacity and market advantages [6][16]. - The company has a strong operational efficiency and profitability, primarily driven by its main mine, the Tashan Coal Mine, which has a high production capacity and low production costs [6][7]. - The company has a solid financial structure with improving cash flow and a rising dividend payout ratio, indicating strong shareholder returns [7][8]. Summary by Sections 1. Company Overview - The company is primarily engaged in coal production and sales, with a focus on thermal coal, and has a significant market presence due to its backing from Jin Energy Holding Group [16][19]. - The company has two main operating mines: Tashan and Selian, with a total approved production capacity of 34.5 million tons per year [29][30]. 2. Coal Business - The company has seen steady growth in coal production and sales since 2018, with a significant portion of revenue derived from coal operations, which accounted for over 99% of total revenue in 2023 [19][39]. - The Tashan Coal Mine is the primary contributor to the company's profitability, accounting for approximately 90% of net profit in 2023 [34][36]. 3. Financial Analysis - The company's revenue for 2023 was 15.34 billion yuan, with a net profit of 3.30 billion yuan, reflecting an 8.3% year-on-year increase in profitability [8][17]. - The company has improved its capital structure, with a debt-to-asset ratio of 35.3% in 2023, down from 57.6% in 2017, indicating enhanced financial stability [7][8]. 4. Profit Forecast and Valuation - The company is expected to maintain stable profitability, with projected net profits of 2.81 billion yuan in 2024, corresponding to an EPS of 1.68 yuan [7][8]. - The report suggests a reasonable valuation range of 18.46 to 20.14 yuan per share based on a PE ratio of 11 to 12 times for 2024 [7].