2024-09-12 12:11Investment Rating - The report maintains a "Buy" rating for China Shenhua (601088) due to its relatively stable performance and integrated operations [6][10][17]. Core Views - The report highlights that the decline in coal prices has pressured profits, but the company's integrated operations are expected to provide stable performance [6][10]. - The company reported a revenue of 168.08 billion yuan for the first half of 2024, a slight decrease of 0.81% year-on-year, and a net profit of 29.50 billion yuan, down 11.34% year-on-year [6][10]. - The coal production increased by 1.6% to 163.2 million tons, while sales volume rose by 5.4% to 229.7 million tons, despite a drop in selling prices [6][10][12]. Summary by Sections Financial Performance - For the first half of 2024, the company achieved a revenue of 1680.78 billion yuan, with a net profit of 295.04 billion yuan, and basic earnings per share of 1.485 yuan [6][10]. - The second quarter of 2024 saw a revenue of 804.31 billion yuan, a decrease of 8.23% from the first quarter, and a net profit of 136.20 billion yuan, down 14.25% quarter-on-quarter [6][10]. Coal Business - The coal segment reported a revenue of 1343.28 billion yuan in the first half of 2024, a decrease of 0.7% year-on-year, with a profit of 260.39 billion yuan [6][10]. - The average selling price of self-produced coal was 533 yuan per ton, down 4.8% year-on-year, while the cost increased by 3.3% to 309 yuan per ton [6][10][12]. Power Generation - The company generated 104.04 billion kWh of electricity in the first half of 2024, a growth of 3.8% year-on-year, with a sales volume of 97.89 billion kWh, up 3.9% [7][16]. - The revenue from power generation was 443.54 billion yuan, a slight increase of 0.4% year-on-year, but the profit decreased by 9.5% to 52.51 billion yuan [7][16]. Cost and Expenses - The company's operating expenses increased by 11.4% year-on-year to 59.62 billion yuan, with management expenses rising by 3.28% [7][10]. - Research and development expenses grew significantly by 36.16% to 9.79 billion yuan, reflecting increased investment in R&D [7][10]. Future Outlook - The transportation segment is expected to become a new growth point, with successful operations of heavy-load trains and significant infrastructure projects underway [7][10]. - The company holds a substantial cash reserve of 1959.09 billion yuan as of June 2024, indicating strong liquidity [17].