lu'an EED(SH:601699) KAIYUAN SECURITIES·2024-04-21 01:30Investment Rating - The investment rating for the company is "Buy" (maintained) [3][7]. Core Views - The report highlights that the company's performance is under pressure due to a decline in coal prices, but it emphasizes the potential for high earnings elasticity and strong dividends [7]. - The company reported a significant decrease in revenue and net profit for 2023 and Q1 2024, with revenues of 43.14 billion yuan in 2023, down 20.55% year-on-year, and a net profit of 7.92 billion yuan, down 44.11% year-on-year [7][10]. - The report anticipates a slight recovery in net profit for 2024-2026, projecting net profits of 8.07 billion yuan in 2024, 8.17 billion yuan in 2025, and 8.30 billion yuan in 2026, reflecting year-on-year growth of 1.9%, 1.2%, and 1.6% respectively [7][10]. Financial Performance Summary - In 2023, the company achieved an operating income of 431.4 billion yuan, with a net profit of 79.2 billion yuan, and a significant drop in earnings per share (EPS) to 2.65 yuan [7][10]. - The coal production and sales volume increased in 2023, with raw coal production at 60.46 million tons and sales at 54.98 million tons, representing year-on-year increases of 6.3% and 3.9% respectively [8]. - The average selling price of coal decreased by 21.8% year-on-year to 728 yuan per ton in 2023, impacting the company's profitability despite a slight reduction in costs [8][9]. Dividend and Valuation - The company plans to distribute a cash dividend of 15.89 yuan per 10 shares, totaling 4.753 billion yuan, with a dividend payout ratio of 60%, resulting in a dividend yield of 6.7% based on the closing price on April 19, 2024 [9]. - The current price-to-earnings (P/E) ratio is projected to be 8.9 for 2024, 8.8 for 2025, and 8.6 for 2026, indicating that the stock is undervalued compared to its earnings potential [7][10].