CSEC,China Shenhua(601088) 东方财富证券·2025-03-20 03:33Investment Rating - The report maintains an "Add" rating for the company [2][8] Core Views - The company benefits from a high proportion of long-term coal contracts, which stabilizes profitability. The average sales price for long-term contracts is expected to remain stable, with a projected price range of 696-710 RMB/ton for 2024 [7][8] - The company has a strong cash flow and a high dividend payout ratio, with an average payout rate of 72% from 2012 to 2023. The company has sufficient cash reserves of 183.5 billion RMB and undistributed profits of 289.7 billion RMB, supporting continued high dividends [7][8] - The company aims to be a leader in the energy revolution and has a strong ESG (Environmental, Social, and Governance) profile, which may provide a premium in market valuation [7][8] Summary by Sections Company Overview - The company primarily engages in coal and electricity production and sales, with a total coal reserve of 336.9 billion tons and a controllable power generation capacity of 44.8 GW as of mid-2024 [18][19] - The company was established in November 2004 and listed on the Hong Kong Stock Exchange in June 2005 and the Shanghai Stock Exchange in October 2007 [18][32] Coal Business - The company has a rich coal resource base, with a recoverable reserve of 153.6 billion tons, allowing for nearly 50 years of production at the current annual output level of 324 million tons [33][34] - The company’s coal production cost is below 200 RMB/ton, and it benefits from a high proportion of long-term contracts, which account for approximately 80% of its coal sales [33][34] Power Business - The company has added 13.4 GW of coal-fired power generation capacity during the "14th Five-Year Plan" period, representing a 43% increase from the end of 2020 [7][8] - The company’s electricity generation has seen rapid growth, with a year-on-year increase of 11% in 2023 and 8% in the first three quarters of 2024 [7][8] Transportation Business - The company operates a comprehensive transportation network that includes railways, ports, and shipping, with a total railway network of 2,408 kilometers and a shipping capacity of approximately 270 million tons per year [19][20] Financial Forecast - The company’s projected net profit for 2024-2026 is expected to reach 58.45 billion, 54.64 billion, and 54.41 billion RMB, respectively, with corresponding EPS of 2.94, 2.75, and 2.74 RMB [8][9]