Guohai Securities·2024-01-31 16:00Investment Rating - The report maintains a "Buy" rating for China Shenhua Energy Company [1][6][8] Core Views - The company's performance is primarily affected by the decline in coal prices, while the electricity business benefits from increased sales volume and lower coal procurement costs [4][5] - The company is expected to achieve a net profit attributable to shareholders of 578 billion to 608 billion yuan for 2023, representing a year-on-year decrease of 12.6% to 16.9% [3][4] - The integration of the coal, electricity, and transportation sectors provides a stable revenue stream, with a high proportion of long-term coal sales contracts [6][8] Summary by Sections Recent Performance - In Q4 2023, the company is projected to achieve a net profit of 95 billion to 125 billion yuan, a quarter-on-quarter decline of 36% to 16% and a year-on-year increase of 9% to 19% [2][4] - For the full year 2023, the company expects a net profit of 578 billion to 608 billion yuan, down from the previous year [3][4] Production and Sales - In 2023, the company achieved a coal production of 320 million tons, a year-on-year increase of 3.5%, and coal sales of 450 million tons, a year-on-year increase of 7.7% [4][5] - The total power generation reached 212 billion kilowatt-hours, up 11% year-on-year, with total electricity sales also increasing by 11% [4][5] Pricing and Market Conditions - The annual long-term contract price for thermal coal is set at 710 yuan/ton for 2024, with the market price showing a narrowing fluctuation [5][6] - The average price of Qinhuangdao thermal coal in January was 913 yuan/ton, down 4.7% from Q4 2023 but still higher than Q3 2023 [5] Future Outlook - The company is expected to maintain a stable growth trajectory with projected net profits of 593.1 billion, 618.6 billion, and 641.5 billion yuan for 2023, 2024, and 2025 respectively [6][7] - The integration of the coal, electricity, and transportation sectors is anticipated to enhance operational efficiency and profitability [6][8]