Western Securities·2025-06-05 00:10Investment Rating - The report gives a "Buy" rating for the company, China Coal Energy (601898.SH), with a target price of 14.33 CNY per share based on absolute and relative valuation methods [1][4][18]. Core Views - The report anticipates that the company's net profit attributable to shareholders will be 16.15 billion, 17.97 billion, and 18.57 billion CNY for the years 2025-2027, with corresponding EPS of 1.22, 1.36, and 1.40 CNY, reflecting year-on-year growth rates of -16.41%, 11.26%, and 3.31% [1][17]. - The market perceives an oversupply in the coal industry, leading to potential price declines; however, the report argues that a balanced supply-demand scenario will maintain spot prices between 750-850 CNY/ton [2][13][54]. Summary by Sections Company Overview - China Coal Energy is a leading state-owned enterprise in the coal sector, focusing on integrated operations and clean coal utilization [22]. - The company has substantial coal reserves of 26.52 billion tons and a recoverable reserve of 13.821 billion tons, with a mining life expectancy of nearly 100 years [56]. Financial Data - The company reported a revenue of 189.4 billion CNY in 2024, a slight decrease of 1.9% from the previous year, with a net profit of 19.32 billion CNY, down 1.1% [7][27]. - The average dividend payout ratio since its listing is 30.65%, with a projected payout ratio of 32.87% for 2024 [14][17]. Industry Analysis - The report highlights a stable coal price environment, with expectations for prices to remain between 750-850 CNY/ton due to balanced supply and demand [2][54]. - The coal production capacity is nearing its limits, with expected production stabilizing around 38.5-39 billion tons from 2025 to 2027 [54]. Profit Forecast and Valuation - The projected revenues for 2025-2027 are 182.29 billion, 186.23 billion, and 187.70 billion CNY, with a year-on-year growth of -3.75%, 2.16%, and 0.79% respectively [17]. - The report employs a Dividend Discount Model (DDM) for valuation, suggesting a reasonable stock price of 13.68 CNY based on dividend expectations [18].