SLSVC(SH:600123) Minsheng Securities·2024-10-29 02:14Investment Rating - The report has downgraded the investment rating to "Cautious Recommendation" [1][3]. Core Views - The company's performance in the first three quarters of 2024 was below expectations, with a revenue of 8.419 billion yuan, a year-on-year decrease of 12.34%, and a net profit attributable to shareholders of 707 million yuan, down 60.70% year-on-year [1]. - In Q3 2024, the company reported a revenue of 2.942 billion yuan, a year-on-year decline of 6.16% and a quarter-on-quarter decline of 8.49%, with a net profit of 155 million yuan, down 64.46% year-on-year and 62.77% quarter-on-quarter [1]. - The coal production and sales in Q3 2024 decreased both year-on-year and quarter-on-quarter, with a coal price drop and rising costs impacting profitability [1]. - The report anticipates a recovery in production and sales, but the profitability of various business segments has been adversely affected [1]. Summary by Sections Financial Performance - For the first three quarters of 2024, coal production was 10.498 million tons, a year-on-year increase of 4.9%, while sales were 8.8718 million tons, a decrease of 1.2% year-on-year [1]. - The average selling price of coal was 633.5 yuan per ton, down 15.5% year-on-year, while the cost of sales per ton increased by 17.0% year-on-year to 357.7 yuan [1]. - The gross margin for coal business was 43.5%, a decrease of 15.7 percentage points year-on-year [1]. Urea Business - Urea production and sales for the first three quarters of 2024 were 734,700 tons and 709,100 tons, respectively, with a comprehensive selling price of 1,963.3 yuan per ton, down 12.7% year-on-year [1]. - The gross margin for urea was 18.7%, an increase of 3.4 percentage points year-on-year [1]. - In Q3 2024, urea production was 256,600 tons, with a gross margin of 12.6%, down 9.4 percentage points quarter-on-quarter [1]. Profit Forecast - The report forecasts net profits attributable to shareholders for 2024-2026 to be 993 million yuan, 1.497 billion yuan, and 1.748 billion yuan, respectively, with corresponding EPS of 0.67 yuan, 1.01 yuan, and 1.18 yuan [1][4]. - The PE ratios for the same periods are projected to be 14, 9, and 8 times, respectively, based on the closing price on October 28, 2024 [1][4]. Adjustments and Future Outlook - The company has adjusted its safety fee extraction standards for coal mines, which is expected to increase the total annual profit by approximately 87 million yuan [1]. - The report indicates that the company’s chemical division will undergo a 90-day shutdown from October 15, 2024, which is expected to reduce urea production by about 45,500 tons and sales revenue by approximately 78 million yuan in Q4 2024 [1].