CSEC,China Shenhua(601088) 长江证券·2024-11-18 07:24Investment Rating - The investment rating for the company is "Buy" and is maintained [5][8]. Core Views - The company's Q3 performance exceeded expectations due to a significant drop in coal costs and a substantial increase in electricity generation. The net profit for Q3 2024 reached 16.57 billion yuan, a year-on-year increase of 1.58 billion yuan (10.54%) and a quarter-on-quarter increase of 2.95 billion yuan (21.66%) [6][8]. Summary by Sections Financial Performance - For the first three quarters of 2024, the company achieved a net profit attributable to shareholders of 46.074 billion yuan, a decrease of 2.2 billion yuan (-4.55%) year-on-year. In Q3 2024, the net profit was 16.57 billion yuan, an increase of 1.58 billion yuan (10.54%) year-on-year and an increase of 2.95 billion yuan (21.66%) quarter-on-quarter [2][5][6]. Coal Segment - In Q3 2024, coal production remained stable with a 3% increase in sales. The cost of self-produced coal decreased significantly, leading to improved coal gross margins. The average selling price of self-produced coal was 528 yuan/ton, a year-on-year increase of 7 yuan/ton (1%) but a quarter-on-quarter decrease of 4 yuan/ton (-1%). The sales cost was 283 yuan/ton, a year-on-year decrease of 34 yuan/ton (-11%) [6][7]. Electricity Segment - The electricity segment saw a significant increase in generation during the peak season, with power generation and sales volumes in Q3 2024 reaching 641 billion kWh and 604 billion kWh, respectively, both up 14% and 15% year-on-year. Despite a slight decrease in electricity prices, the gross margin improved due to lower costs [7][8]. Transportation Segment - In Q3 2024, railway turnover and port cargo volumes saw a decline, but the impact on performance was minimal due to a larger decrease in costs compared to revenue. The gross margins for railway and shipping segments improved [7][8]. Chemical Segment - The chemical segment experienced a significant increase in olefin sales in Q3 2024, but costs also rose, resulting in little change in performance. Year-to-date, the chemical business gross margin declined due to maintenance affecting production and sales [8]. Investment Outlook - The company has several projects underway, including new coal and power projects expected to be operational by 2027-2028, and expansion projects for railways. The long-term growth outlook remains positive, with projected net profits for 2024-2026 at 58.6 billion, 59 billion, and 59.7 billion yuan, respectively [6][8].