pingmei coal(SH:601666) KAIYUAN SECURITIES·2024-04-26 15:00Investment Rating - The report maintains a "Buy" rating for Pingmei Co Ltd (601666 SH) [2][4] Core Views - Pingmei Co Ltd's Q1 2024 performance was under pressure due to declining market coal prices, with revenue decreasing by 4 47% YoY to RMB 8 24 billion and net profit attributable to shareholders dropping by 35 4% YoY to RMB 740 million [4] - The company's refined coal strategy has helped improve coal quality and increase the proportion of refined coal, leading to a 9 5% YoY increase in the average selling price per ton of coal to RMB 1,156 despite a 7 7% YoY decline in the market price of coking coal [5] - The company is expected to benefit from downstream demand recovery due to real estate relief and steady growth policies, as well as a potential rebound in coking coal prices due to supply constraints [4] - The company's high dividend yield of 7 6% and potential growth from asset injections make it an attractive long-term investment [4][6] Financial Performance - In Q1 2024, the company's coal production decreased by 15 04% YoY to 6 63 million tons, and coal sales decreased by 12 86% YoY to 6 91 million tons, mainly due to the suspension of the 12th mine [5] - The company's gross profit per ton of coal increased by 5 2% YoY to RMB 322, despite a 11 3% YoY increase in cost per ton to RMB 834 [5] - The company's 2023 dividend payout ratio was 60 59%, with a cash dividend of RMB 0 99 per share, totaling RMB 2 425 billion [6] Strategic Initiatives - The company is implementing a "Ten-Year Human Resources Reform Plan" to optimize its workforce, aiming to reduce the total number of employees to 40,000 within 5-8 years By the end of 2023, the company had reduced its workforce by 16 3% to 44,900 employees [6] - The company is expected to receive asset injections from its parent company, including coal and coking assets, which will enhance its growth potential [4][6] Industry Outlook - The coking coal market is expected to see a rebound in prices due to supply constraints and increased demand from downstream industries [4] - The company's refined coal strategy and cost control measures are expected to support its profitability in a challenging market environment [5][6]