CSEC,China Shenhua(601088) 华福证券·2024-05-19 08:00Investment Rating - The report upgrades the investment rating of China Shenhua to "Buy" [1][2][6] Core Views - The company's coal and power businesses are operating steadily, with high dividends highlighting long-term investment value [1] - The integrated advantages of the company are evident, with coal business achieving low-cost operations and power business continuing to expand [1] - The company maintains a high level of return to investors, with a proposed cash dividend of 22.6 yuan per 10 shares for 2023, totaling 44.903 billion yuan, which accounts for 75.2% of net profit attributable to shareholders [1] Summary by Sections Financial Performance - In Q1 2024, the company achieved operating revenue of 87.647 billion yuan, a year-on-year increase of 0.7% and a quarter-on-quarter decrease of 3.3% [1] - The net profit attributable to shareholders for Q1 2024 was 15.884 billion yuan, down 14.7% year-on-year but up 39.0% quarter-on-quarter [1] - For the full year 2023, the company reported operating revenue of 343.074 billion yuan, a decrease of 0.4% year-on-year, and a net profit of 59.694 billion yuan, down 14.3% year-on-year [1] Coal Business - In Q1 2024, coal production and sales reached 81.3 million tons and 117.1 million tons, respectively, representing year-on-year increases of 1.5% and 8.8% [1] - The average selling price of coal in Q1 2024 was 573 yuan per ton, a decrease of 7.7% year-on-year [1] - The coal business maintained a gross profit margin of 28.9%, down 4.8 percentage points year-on-year [1] Power Business - In Q1 2024, the company generated 55.35 billion kWh of electricity, with sales reaching 52.16 billion kWh, both up 7.0% year-on-year [1] - The average selling price of electricity was 409 yuan per MWh, down 2.6% year-on-year [1] - The power business achieved a gross profit margin of 16.9%, an increase of 0.8 percentage points year-on-year [1] Dividend Policy - The company has a strong track record of returning value to shareholders, with dividend payout ratios of 91.88%, 100.4%, and 72.77% from 2020 to 2022 [1] - The proposed cash dividend for 2023 reflects the company's commitment to high shareholder returns [1] Earnings Forecast - The report raises the net profit forecasts for 2024, 2025, and introduces a forecast for 2026, estimating net profits of 61.459 billion yuan, 64.073 billion yuan, and 66.630 billion yuan, respectively [1] - The corresponding earnings per share (EPS) are projected to be 3.09 yuan, 3.22 yuan, and 3.35 yuan for 2024, 2025, and 2026 [1]