pingmei coal(601666) Zhongyuan Securities·2024-09-04 10:03Investment Rating - The report upgrades the investment rating of the company to "Buy" with an expectation of a relative increase of over 15% compared to the CSI 300 index within the next six months [2][14]. Core Viewpoints - The company is expected to see a recovery in performance starting from the third quarter, despite a decline in coal production in the first half of 2024 due to the suspension of operations at twelve mines [2][3]. - The company has a strong focus on its premium coal strategy, which is anticipated to enhance profitability as the production of premium coal increases [3][5]. - The company has initiated a share buyback program and has a high dividend payout ratio, with a dynamic dividend yield of 10.70% as of September 3, 2024 [3][5]. Summary by Relevant Sections Financial Performance - In the first half of 2024, the company achieved operating revenue of 16.254 billion yuan, a year-on-year increase of 1.78%, while net profit attributable to shareholders was 1.393 billion yuan, a decrease of 37.66% [2][5]. - The company’s coal production for the first half of 2024 was 14.21 million tons, a decrease of 7.56% year-on-year, with premium coal production reaching 6.59 million tons [2][3]. Shareholder Returns - The company has committed to a cash dividend payout ratio of no less than 60% from 2023 to 2025, with a cash distribution of 0.99 yuan per share for the 2023 fiscal year [3][5]. - The total amount spent on the share buyback program reached approximately 300 million yuan, representing 1.15% of the total share capital [3][4]. Market Position and Strategy - The company is located in the Pingdingshan mining area, which is rich in high-quality coal resources, and is the largest coking coal production base in Central and Southern China [2][3]. - The controlling shareholder has been actively increasing its stake in the company, indicating confidence in its future development, with plans for asset injection expected to enhance production capacity [4][5]. Profitability Forecast - The projected net profits for the company from 2024 to 2026 are 3.055 billion yuan, 3.317 billion yuan, and 3.658 billion yuan, respectively, with corresponding earnings per share of 1.23 yuan, 1.34 yuan, and 1.48 yuan [5][11].