hbky(SH:600985) Guohai Securities·2026-02-11 12:02Investment Rating - The report maintains a "Buy" rating for Huabei Mining [1] Core Views - Huabei Mining is positioned as a leading coal and coke enterprise in East China, with expected increases in both volume and price in 2026, indicating a potential turning point in profitability [7] - The company has a strong competitive advantage due to its abundant coal resources and favorable location in a region with high demand but limited supply [31] - The report highlights the company's effective cost control measures, which have led to a significant reduction in unit costs [50] Summary by Sections Company Overview - Huabei Mining is a leading integrated coal and coke operator in East China, with its main business segments including coal, coal chemical products, electricity, and construction materials [11][13] - The company is controlled by the Anhui Provincial State-owned Assets Supervision and Administration Commission, with a significant shareholding by Huabei Mining Group [11] Coal Business - The company expects a recovery in coal production in 2026, driven by the resumption of operations at the Xinhukou Mine and the commissioning of the Taohutu Mine [36] - As of H1 2025, the company has a coal reserve of over 2 billion tons and an approved annual production capacity of 34.25 million tons, with a potential lifespan of nearly 60 years based on current reserves [31][29] - The average selling price of coal is expected to rise, with January 2026 prices at 1,660 RMB per ton, reflecting a 28 RMB increase from Q4 2025 [45] Coal Chemical Business - The coal chemical segment is anticipated to reach a profitability turning point, with new projects expected to contribute positively to earnings [7] - The company has a total annual production capacity for coal chemicals of 440,000 tons for coke, 90,000 tons for methanol, and 60,000 tons for ethanol [7] Other Business Segments - The company has additional projects in electricity generation and limestone production, which are expected to enhance overall performance in 2026 [7] - A new 2×660MW ultra-supercritical coal-fired power project is expected to contribute approximately 196 million RMB in annual profit once operational [7] Earnings Forecast and Investment Recommendation - The report forecasts net profits for the company to be 1.495 billion RMB in 2025, 3 billion RMB in 2026, and 4.106 billion RMB in 2027, indicating a significant recovery trajectory [8] - The current price-to-earnings (P/E) ratio is projected to be 23.3 for 2025, dropping to 11.6 for 2026, suggesting a favorable valuation for investors [8]