Western Securities·2025-12-26 05:46Investment Rating - The report assigns a "Buy" rating to Yanzhou Coal Mining Company (兖矿能源) with a target price of 16.27 CNY per share [1][5]. Core Insights - The report anticipates that the company's net profit attributable to shareholders will be 9.448 billion, 12.019 billion, and 14.171 billion CNY for the years 2025-2027, with corresponding EPS of 0.94, 1.20, and 1.41 CNY, reflecting a year-on-year growth of -39.61%, 27.21%, and 17.91% respectively [1][20]. - The coal market is expected to maintain a stable price range of 700-800 CNY per ton from 2025 to 2027, despite market concerns about oversupply [2][16]. - The company has substantial coal reserves of 464 billion tons and a recoverable reserve of 60 billion tons, positioning it among the top coal producers in China [2][59]. - The company has a strong track record of cash dividends, with an average payout ratio of 49.82% since its listing, and a projected payout ratio of 53.58% for 2024 [2][20]. Summary by Sections Financial Performance - The company is projected to achieve revenues of 120.47 billion, 127.92 billion, and 131.39 billion CNY for 2025-2027, with growth rates of -13.4%, 6.2%, and 2.7% respectively [3][20]. - The net profit for 2024 is expected to be 15.644 billion CNY, down 23.9% from the previous year, while the 2025 net profit is projected to decline significantly before recovering in subsequent years [3][20]. Business Overview - Yanzhou Coal Mining Company operates as a comprehensive energy operator with a diverse business layout, including mining, high-end chemical materials, and renewable energy [27]. - The coal segment is expected to contribute 66% of total revenue and 83% of total profit in 2024, highlighting its critical role in the company's financial health [12][29]. Market Dynamics - The report indicates that the coal supply-demand balance is expected to remain stable, with domestic coal production projected to stabilize around 38.5-39 billion tons from 2025 to 2027 [55]. - The demand for coal is anticipated to remain robust due to the ongoing reliance on thermal power generation, which still accounts for a significant portion of electricity production in China [48][49].