pingmei coal(601666) Guotai Junan Securities·2024-10-26 14:23Investment Rating - The report maintains a rating of "Buy" for Pingmei Shenma Energy Company (601666) [4] Core Views - The company's Q3 performance remained stable, with production expected to recover significantly in Q4. The profitability in Q4 is anticipated to exceed market expectations as the cycle reaches its bottom [2][10] Summary of Financials - For Q3, the company achieved revenue of 70.08 billion yuan, a year-on-year decrease of 1.90%, and a net profit attributable to shareholders of 6.52 billion yuan, down 27.89% year-on-year, aligning with market expectations [10] - The total revenue for the first three quarters was 233.19 billion yuan, reflecting a year-on-year growth of 0.78%, while the net profit attributable to shareholders was 20.45 billion yuan, a decrease of 34.91% [10] - The company’s coal production in Q3 was 6.85 million tons, a year-on-year decline of 11%, with sales of commercial coal at 6.59 million tons, down 13% year-on-year [10] - The average selling price of coal in Q3 was 918 yuan per ton, an increase of 49 yuan per ton year-on-year, but a decrease of 100 yuan per ton compared to the previous quarter [10] Target Price Adjustment - The target price has been adjusted down to 12.23 yuan from the previous 13.22 yuan, based on a comparable company PE of 10.73x for 2024 [4][10] Production Outlook - Q4 production is expected to recover to over 7.5 million tons per quarter as the factors affecting production in Q3 have been eliminated [10] Profitability Insights - The report indicates that the profitability in Q4 is likely to remain stable, with a gross profit margin of around 300 yuan per ton, despite a potential decline in average prices [10]