Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 3.40 [6][7]. Core Views - The company reported a revenue of HKD 5.06 billion for 2024, a decrease of 14.2% year-on-year, primarily due to a decline in average selling prices and increased production costs [1][2]. - Despite the revenue decline, the company declared a total dividend of HKD 0.30 per share, an increase of 7.1% year-on-year, with a dividend payout ratio reaching 100% [1][3]. - The company has a strong asset base and stable operations, which supports its high dividend yield of 11.5% [1][3]. Summary by Sections Revenue and Profitability - The company achieved a net profit of HKD 1.49 billion in 2024, down 20.9% year-on-year, with a gross profit margin of 51.2% [5][12]. - The average selling price of premium coking coal fell by 13.8% to HKD 1,666 per ton, which was more significant than the market average decline [2][3]. Production and Costs - The company produced 4.96 million tons of raw coking coal in 2024, a decrease of 5.5% year-on-year, while premium coking coal production was 3.16 million tons, down 2.8% year-on-year [2][3]. - Production costs for raw coal increased by 7% to HKD 429 per ton, influenced by various cost factors including resource taxes and labor [3][20]. Financial Forecasts - The forecast for net profit for 2025 is adjusted to HKD 1.05 billion, reflecting a 39% decrease from previous estimates [4][11]. - The company is expected to maintain a dividend payout ratio of 80% from 2025 to 2035, with a perpetual growth rate assumption of 0% [4][13]. Valuation Metrics - The company’s price-to-earnings (P/E) ratio is projected to be 12.37 for 2025, while the price-to-book (P/B) ratio is expected to be 0.75 [5][20]. - The target price of HKD 3.40 represents a 6.3% increase from the previous target price of HKD 3.20 [11][20].
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