GUANGHUI ENERGY(600256) Huachuang Securities·2024-10-31 12:21Investment Rating - The report maintains a "Strong Buy" rating for the company, expecting it to outperform the benchmark index by over 20% in the next six months [1][12][13]. Core Views - The company's revenue for the first three quarters of 2024 was CNY 26.39 billion, a year-on-year decrease of 46.76%, with a net profit attributable to shareholders of CNY 2.00 billion, down 58.72% year-on-year. In Q3 alone, revenue was CNY 9.14 billion, down 36.87% year-on-year but up 26.85% quarter-on-quarter [1]. - The decline in performance is attributed to maintenance activities in the coal chemical sector, which affected production and sales. However, the company is expected to benefit from the gradual release of capacity in its three major mining areas [1][2]. - The company plans to invest CNY 16.5 billion in a new coal chemical project, which is expected to generate an average annual net profit of CNY 1.64 billion [1]. Financial Summary - For 2023A, the main revenue is projected at CNY 61.48 billion, with a year-on-year growth rate of 3.5%. The net profit attributable to shareholders is expected to be CNY 5.17 billion, down 54.4% year-on-year [3]. - The earnings per share (EPS) for 2024E is projected at CNY 0.55, with a price-to-earnings (P/E) ratio of 14 times [3]. - The company’s total assets are estimated to be CNY 58.56 billion in 2023A, with a debt-to-asset ratio of 53.14% [3]. Production Capacity and Projects - The company has increased the production capacity of its Baishihu open-pit coal mine from 18 million tons per year to 35 million tons per year as of June 2024, which is expected to contribute to production in the second half of 2024 [1]. - The Marang coal mine has received approval for a construction scale of 10 million tons per year, with a total resource of 1.8 billion tons, which will accelerate the release of high-quality capacity [1]. - The company has initiated a second coal chemical project, which will enhance the conversion of coal resources and increase the added value of its products [1].