lu'an EED(SH:601699) Minsheng Securities·2025-08-28 07:21Investment Rating - The report upgrades the investment rating to "Recommended" based on the expected performance and flexibility in pricing mechanisms [5][3]. Core Views - The company reported a revenue of 14.069 billion yuan for the first half of 2025, a year-on-year decrease of 20.31%, with a net profit attributable to shareholders of 1.348 billion yuan, down 39.44% year-on-year [1]. - In Q2 2025, the company achieved a net profit of 0.691 billion yuan, a year-on-year decrease of 26.99% but a quarter-on-quarter increase of 5.1% [1]. - The company confirmed asset disposal gains of 0.204 billion yuan in Q2 2025, primarily from the transfer of some coking capacity [1]. Summary by Sections Revenue and Production - In H1 2025, the company produced 28.63 million tons of raw coal, a year-on-year increase of 3.47%, with a significant rise in the production of injection coal by 13.2% to 1.098 million tons [2]. - The total sales volume of commodity coal reached 25.25 million tons, up 2.85% year-on-year, with injection coal sales increasing by 15.71% [2]. Cost and Profitability - The average selling price of coal in H1 2025 was 516.2 yuan per ton, down 24.43% year-on-year, while the cost per ton was 317.9 yuan, a decrease of 14.41% [2]. - The total gross profit from coal business was 5.009 billion yuan, down 34.53% year-on-year [2]. - In Q2 2025, the average selling price of coal was 492.72 yuan per ton, down 27.25% year-on-year, while the cost per ton was 298.12 yuan, down 18.43% year-on-year [2]. Strategic Adjustments - The company plans to shut down the Xidong Coal Mine with a production capacity of 600,000 tons per year due to resource depletion, which is expected to reduce loss sources and optimize resource allocation [3]. Financial Forecast - The projected net profits for 2025, 2026, and 2027 are 3.969 billion yuan, 5.976 billion yuan, and 6.622 billion yuan, respectively, with corresponding EPS of 1.33 yuan, 2.00 yuan, and 2.21 yuan [4]. - The PE ratios for the same years are expected to be 10, 7, and 6 times, respectively [4].