pingmei coal(SH:601666) HTSC·2025-04-30 06:54Investment Rating - The investment rating for the company is "Accumulate" with a target price of RMB 9.84 [7]. Core Views - The company's Q1 2025 performance showed a significant decline in revenue and net profit due to a drop in coking coal prices, with revenue at RMB 5.4 billion, down 34.69% year-on-year, and net profit at RMB 152 million, down 79.50% year-on-year [1]. - The report anticipates a potential recovery in coking coal prices as demand improves, despite the current oversupply situation [2][3]. - The company maintains a high dividend payout ratio, averaging over 60% from 2019 to 2024, which supports its growth outlook [1]. Summary by Sections Financial Performance - In Q1 2025, the company produced 7.495 million tons of raw coal, a decrease of 13.1% year-on-year, and sold 6.317 million tons of commercial coal, down 8.6% year-on-year [3]. - The average selling price of commercial coal fell by 26.1% year-on-year to RMB 763.4 per ton, leading to a gross margin decline of 8.6 percentage points to 19.3% [3]. Price and Demand Dynamics - The coking coal market is currently characterized by strong supply and weak demand, but there are signs of demand recovery in Q2 2025, with an increase in operating rates at coking plants [2]. - The average price index for low-sulfur and high-sulfur metallurgical coal increased by 3.2% and 2.4% month-on-month in April 2025, indicating a potential price rebound [2]. Profit Forecast and Valuation - The forecast for net profit attributable to the parent company has been revised down by 52% for 2025, 40% for 2026, and 13% for 2027, now projected at RMB 780 million, RMB 1.26 billion, and RMB 1.89 billion respectively [4]. - The target price has been adjusted down to RMB 9.84 from RMB 10.3, reflecting the revised profit expectations [4].