Guohai Securities·2024-03-23 16:00Investment Rating - The report maintains a "Buy" rating for China Shenhua (601088) [1] Core Views - The coal and electricity businesses continue to expand, and a high dividend payout ratio highlights the company's value [1] - The company's performance in 2023 was impacted by a decline in coal prices, leading to reduced profits in the coal sector, while the electricity business saw significant profit growth due to increased sales volume from new units [5][6] - The company plans to focus on expanding its electricity business, with a capital expenditure plan of 36.8 billion yuan for 2024, primarily directed towards electricity projects [8] Financial Performance - In 2023, the company achieved operating revenue of 343.07 billion yuan, a slight decrease of 0.4% year-on-year, and a net profit attributable to shareholders of 59.69 billion yuan, down 14.3% year-on-year [5][10] - The average selling price of coal in 2023 was 584 yuan/ton, a decrease of 9.3% year-on-year, while the total profit from the coal sector was 58.53 billion yuan, down 16.8% year-on-year [4][9] - The electricity sector's total profit reached 10.64 billion yuan in 2023, an increase of 34.1% year-on-year, driven by a rise in total power generation and sales [6][8] Production and Sales - In 2023, the company produced 320 million tons of commodity coal, an increase of 3.5% year-on-year, and sold 450 million tons, up 7.7% year-on-year [6] - The company’s total power generation in 2023 was 212 billion kWh, an increase of 11% year-on-year, with total sales reaching 200 billion kWh, also up 11% year-on-year [6][8] Dividend Policy - The company proposed a cash dividend of 2.26 yuan per share, representing a payout ratio of 75.2% of net profit, with a dividend yield of 6% based on the closing price on March 22 [8][9] Future Outlook - The company expects net profits for 2024, 2025, and 2026 to be 61.58 billion yuan, 64.18 billion yuan, and 66.21 billion yuan respectively, reflecting a cautious growth outlook [9][10] - The company maintains a strong integrated advantage across its coal, electricity, and transportation sectors, with a high proportion of long-term coal sales contracts expected to stabilize performance [9]