pingmei coal(SH:601666) Changjiang Securities·2024-09-05 03:09Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company's net profit for the first half of 2024 was 1.393 billion yuan, a year-on-year decrease of 37.66%. In the second quarter, the net profit was 652 million yuan, down 11.9% quarter-on-quarter and 40.1% year-on-year [5]. - The decline in production and sales was significantly impacted by safety incidents, while costs increased, leading to a substantial drop in overall profitability [5]. - The company’s raw coal production in the first half of 2024 was 14.21 million tons, a decrease of 1.16 million tons (8%) year-on-year, and the sales volume of commercial coal was 13.49 million tons, down 2.05 million tons (13%) year-on-year [5]. - The average selling price of coal increased by 93 yuan per ton (9%) year-on-year to 1,088 yuan per ton in the first half of 2024, but saw a quarter-on-quarter decline in the second quarter due to weak demand [5]. - Management and R&D expenses increased significantly, with management expenses reaching 696 million yuan in the first half of 2024, up 69% year-on-year [5][6]. - The company’s gross profit from commercial coal sales was 4.27 billion yuan, down 13% year-on-year, with a gross profit per ton of 317 yuan, a slight increase of 1% year-on-year [6]. - Despite short-term pessimism in the market, the long-term value of the company’s high-quality coking coal resources is emphasized, as they are expected to maintain high prices due to scarcity [6]. - The projected net profits for 2024, 2025, and 2026 are 2.57 billion yuan, 2.83 billion yuan, and 2.97 billion yuan respectively, with corresponding price-to-earnings ratios of 9.0x, 8.1x, and 7.7x [6]. Summary by Sections Production and Sales - The company experienced a significant decline in production and sales due to safety incidents, with raw coal production and commercial coal sales both decreasing year-on-year [5]. Pricing - The average selling price of coal increased year-on-year but faced a decline in the second quarter due to seasonal demand factors [5]. Costs and Expenses - Management and R&D expenses saw a notable increase, impacting overall profitability [5][6]. Profitability - The company’s gross profit margins remained under pressure, with a year-on-year decline in gross profit from commercial coal sales [6]. Long-term Outlook - The scarcity of high-quality coking coal resources is expected to support long-term pricing stability, despite current market challenges [6].