lu'an EED(SH:601699) Xinda Securities·2024-08-23 08:46Investment Rating - The investment rating for Lu'an Environmental Energy (601699.SH) is "Buy," consistent with the previous rating [1]. Core Views - The report highlights that the company's performance in the first half of 2024 was impacted by a decline in both volume and price, with a significant drop in revenue and net profit compared to the previous year [1][2]. - Despite the challenges, the company maintains a high gross margin in its coal business, indicating resilience in its operational efficiency [1]. - The company is strategically expanding its resources and enhancing its operational capabilities, which is expected to support future growth [1][2]. Financial Performance Summary - In the first half of 2024, the company achieved operating revenue of 17.654 billion yuan, a year-on-year decrease of 19.33%, and a net profit attributable to shareholders of 2.227 billion yuan, down 57.96% [1]. - The operating cash flow for the same period was 2.854 billion yuan, reflecting a decline of 7.52% year-on-year [1]. - The gross margin for the coal business was 45.63%, down from 56.58% in the previous year, indicating a decrease of 10.95 percentage points [1]. Production and Sales Summary - The company's raw coal production in the first half of 2024 was 27.67 million tons, a decrease of 6.33% year-on-year, while the sales volume of commercial coal was 24.55 million tons, down 10.04% [1]. - The average selling price of coal was 683.09 yuan per ton, a decline of 11.59% from 773 yuan per ton in the same period last year [1]. Strategic Initiatives - The company is focused on resource expansion and project development to address the short lifespan of existing mines, with plans for new mining projects and acquisitions [1][2]. - As of mid-2024, the company has four under-construction mines with a total capacity of 3 million tons per year and has secured coal exploration rights with a resource volume of 819.575 million tons [1][2]. Dividend and Cash Position - The company has a strong cash position with monetary funds amounting to 23.354 billion yuan and a debt coverage ratio of 494%, reflecting solid asset quality [2]. - The cash dividend payout ratio is 60%, with a total cash dividend amount of 4.753 billion yuan, demonstrating the company's commitment to returning value to shareholders [2]. Earnings Forecast - The forecasted net profit for the company from 2024 to 2026 is projected to be 5.151 billion, 5.809 billion, and 6.227 billion yuan, respectively, with corresponding EPS of 1.72, 1.94, and 2.08 yuan per share [2]. - The report maintains a positive outlook on the company's growth potential, supported by its strong market position and financial health [2].