KAIYUAN SECURITIES·2024-10-26 08:38Investment Rating - The investment rating for China Shenhua (601088.SH) is maintained at "Buy" [1]. Core Views - The Q3 performance exceeded expectations, with stable high dividends highlighting the investment value. The company reported a revenue of 253.9 billion yuan for Q1-Q3 2024, a year-on-year increase of 0.57%. The net profit attributable to shareholders was 46.07 billion yuan, a decrease of 4.55% year-on-year. For Q3 alone, revenue was 85.82 billion yuan, a quarter-on-quarter increase of 6.7%, and net profit was 16.57 billion yuan, a quarter-on-quarter increase of 21.66% [2][3]. Summary by Sections Financial Performance - For Q1-Q3 2024, the company achieved a revenue of 253.9 billion yuan, up 0.57% year-on-year, and a net profit of 46.07 billion yuan, down 4.55% year-on-year. The adjusted net profit was 46.03 billion yuan, down 3.7% year-on-year. In Q3 alone, revenue was 85.82 billion yuan, up 6.7% quarter-on-quarter, and net profit was 16.57 billion yuan, up 21.66% quarter-on-quarter [2][3]. Coal Business Performance - The coal business saw significant cost reductions in Q3. For Q1-Q3 2024, the company produced 244.4 million tons of coal, a year-on-year increase of 1.0%, and sold 345.5 million tons, a year-on-year increase of 3.8%. The average selling price was 564 yuan/ton, down 3.3% year-on-year. The production cost per ton was 186.3 yuan, down 2.5% year-on-year, and the sales cost per ton was 300.1 yuan, down 1.7% year-on-year [2][3]. Power Business Performance - The power business experienced an increase in volume but a decrease in price. For Q1-Q3 2024, the installed capacity increased by 305 MW to 44,939 MW, with power generation and sales increasing by 7.6% and 7.8% year-on-year, respectively. The gross profit for the power segment was 11.18 billion yuan, down 8.1% year-on-year due to a decline in average selling prices [2][3]. Future Outlook - The company is expected to expand its coal production capacity, with plans to acquire additional coal mine capacities and ongoing projects receiving approvals. The high proportion of long-term contracts in the coal business is anticipated to maintain stable profitability. The dividend payout ratio for 2023 was 75.2%, with an expected dividend yield of 5.5% for 2024, indicating significant investment value [2][3].