CHINA COAL ENERGY(601898) 光大证券·2024-12-12 13:34Investment Rating - The report assigns an "Accumulate" rating for China Coal Energy (601898.SH) with a current price of 12.91 CNY [5][10][123]. Core Views - China Coal Energy is a leading state-owned enterprise in the coal sector with abundant resources and a low valuation. The company has a total reserve of 26.65 billion tons and a recoverable reserve of 13.87 billion tons, ranking third and first among listed companies, respectively [1][3]. - The company's revenue is primarily derived from coal, accounting for 84% of total revenue in 2023, with stable profitability supported by a high proportion of long-term contracts [2][3][8]. - The coal market is expected to maintain a balance between supply and demand, with prices supported above 800 CNY per ton due to various factors [2][8]. Summary by Sections Company Overview - China Coal Energy is controlled by the State-owned Assets Supervision and Administration Commission, with a 57.41% stake held by China Coal Group as of Q3 2024 [1]. - The company focuses on coal production, coal chemical, mining equipment, and financial services, with respective revenue contributions of 84%, 11%, 6%, and 1% in 2023 [1][60]. Long-term Contracts and Price Stability - The company signs long-term contracts for at least 80% of its own resource volume, achieving a fulfillment rate of over 90% [2]. - The impact of spot prices on long-term contract prices is limited, with a 100 CNY decrease in spot prices resulting in only a 5-14 CNY decrease in contract prices [2][75]. Profitability and Dividends - The company has maintained a dividend payout ratio of around 30% from 2019 to 2023, with expectations for an increase in 2024 due to a special dividend plan [2][65]. - The forecasted net profit for 2024-2026 is 186.8 billion, 195.4 billion, and 204.9 billion CNY, with corresponding EPS of 1.41, 1.47, and 1.55 CNY [3][113]. Market Outlook - The coal supply is expected to remain tight, with new capacity additions slowing down due to past industry losses and regulatory pressures [80][83]. - The demand for coal is projected to peak in 2028, with a plateau period expected until 2037, indicating stable future demand for the company’s products [83][86]. Valuation - The current P/E ratio for the company is 9, which is lower than the average of comparable companies, indicating a potential undervaluation [3][116]. - The absolute valuation suggests a target price range of 15.42 to 23.98 CNY per share based on DDM valuation methods [120][123].