Haitong Securities·2024-09-06 07:10Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [2][9]. Core Views - The report highlights that the coal business remains stable while the power sector has significantly increased profitability. The company is expected to benefit from its high proportion of long-term coal contracts, which provide stable profitability. Additionally, new operational thermal power installations are anticipated to contribute to incremental growth [9][11]. Financial Performance Summary - In H1 2024, the company achieved a revenue of 168.1 billion yuan and a net profit attributable to shareholders of 29.5 billion yuan, reflecting a year-on-year decrease of 0.8% and 11.3% respectively. The adjusted net profit was 29.48 billion yuan, down 10.6% year-on-year [6][9]. - The coal segment reported a production and sales volume of 163.2 million tons and 162.8 million tons respectively, with a year-on-year increase of 1.6% and 2.2%. The average selling price decreased by 5.8% year-on-year to 566 yuan per ton [6][9]. - The power segment saw a total power generation and sales volume of 104.04 billion kWh and 97.89 billion kWh respectively, with a year-on-year increase of 3.8% and 3.9%. The average selling price for electricity was 0.404 yuan per kWh, down 3.3% year-on-year [7][9]. Segment Analysis Coal Segment - The coal production cost per ton increased by 2% year-on-year to 191.7 yuan, primarily due to an 18.3% rise in labor costs [6][9]. - The coal segment's revenue and total profit for H1 were 134.33 billion yuan and 26.04 billion yuan respectively, with a gross margin of 28.3%, down 3.5 percentage points year-on-year [6][9]. Power Segment - The power segment's revenue and total profit for H1 were 44.35 billion yuan and 5.25 billion yuan respectively, with a gross margin of 16%, down 0.8 percentage points year-on-year [7][9]. - The company has over 10 GW of power generation units under construction or planned, representing a 23% increase over the current capacity [7][9]. Railway Segment - The railway segment's turnover volume increased by 7% year-on-year to 161.4 billion ton-kilometers, with revenue of 22.44 billion yuan and total profit of 6.92 billion yuan, reflecting a year-on-year increase of 1.4% and 1.9% respectively [9][11]. Earnings Forecast - The company is expected to achieve net profits of 58.3 billion yuan, 59.6 billion yuan, and 60.1 billion yuan for the years 2024 to 2026, with corresponding EPS of 2.93, 3.00, and 3.02 yuan [9][11]. - The report suggests a reasonable valuation range of 43.99 to 46.92 yuan based on a PE ratio of 15 to 16 times for 2024 [9][11].