SHCI(SH:601225) HTSC·2025-10-30 08:56Investment Rating - The report maintains a "Buy" rating for Shaanxi Coal and Chemical Industry Co., Ltd. (601225 CH) with a target price of RMB 33.11 [6][4]. Core Views - The company reported a Q3 revenue of RMB 40.1 billion, down 10.01% year-on-year but up 6.03% quarter-on-quarter. The net profit attributable to shareholders was RMB 5.075 billion, down 20.34% year-on-year but up 79.08% quarter-on-quarter. The overall performance improvement in Q3 is attributed to the recovery in coal prices and the gradual elimination of the impact from deferred income tax related to the exit from the Zhuque New Materials Asset Management Plan [1][4]. - The company is expected to benefit from stable coal prices and a favorable interest rate environment, enhancing its dividend value as a leading thermal coal player with a high dividend payout ratio [1][4]. Summary by Sections Financial Performance - For the first three quarters of 2025, the company achieved a total revenue of RMB 118.083 billion, down 12.81% year-on-year, and a net profit of RMB 12.713 billion, down 27.22% year-on-year. The non-recurring net profit was RMB 11.494 billion, down 29.70% year-on-year [1][4]. - The coal production and sales for the first nine months of 2025 were 130.37 million tons and 189.20 million tons, respectively, showing a year-on-year increase of 2.03% and 0.40% [2][4]. Market Outlook - The report suggests that the thermal coal market may maintain a tight supply-demand balance, with coal prices expected to stabilize in the range of RMB 700-750 per ton [3][4]. - The company is likely to benefit from high electricity prices in Shaanxi, supporting long-term coal contract prices, while the power segment acts as a stabilizer for coal consumption and contributes to stable cash flow [2][4]. Profit Forecast and Valuation - The net profit forecasts for 2025-2027 have been adjusted downwards by 11%, 1%, and 0%, respectively, to RMB 18.885 billion, RMB 21.773 billion, and RMB 22.091 billion, with corresponding EPS of RMB 1.95, RMB 2.25, and RMB 2.28 [4][10]. - The report assigns a 2025 PE valuation of 17 times, reflecting an increase from the previous valuation of 15 times, with a target price adjustment to RMB 33.11 [4][10].