According to the research report released by Tianfeng Securities through the Zhitong finance APP, it initiates coverage on Risun Group for the first time, giving a "buy" rating. Considering that the profit of the coking sector is relatively at the bottom, there is a possibility of bottoming out in the future. It is expected that the company's profit for 2024-2026 will be 1.15/1.281/1.375 billion yuan. The company is valued at 15 times its net profit in 2024, with a target price of 4.2 Hong Kong dollars.

Tianfeng Securities pointed out that there may be fluctuations in the supply and demand of the coking coal industry in the short term, but it is expected to remain stable in the long term. Moreover, the company's Indonesian and Pingxiang coking projects are expected to bring higher growth to the company in the long term.

Tianfeng Securities' main points are as follows:

The reasonable layout of the park and excellent financial indicators highlight the company's investment value.

From a geographical perspective, the company's parks are mainly distributed in three provinces: Inner Mongolia, Hebei, and Shandong. Seven parks are close to Hebei and Shanxi and are closer to northern ports, which is convenient for raw material procurement and product sales and can save sales and transportation costs. In addition, the company's Hohhot park is close to Mongolia, making it easier to obtain imported coking coal resources from Mongolia.

Looking at financial indicators, the company's profitability is relatively impressive in the industry, mainly due to: first, excellent cost control capabilities. Second, the company's steady business philosophy, strict control and safe matching of cash flow, makes the company's cash income relatively stable and safer. Third, the company pays more attention to shareholder returns and has achieved the dividend promises made at the IPO, with a stable dividend yield in the industry.

Multiple operating models drive the stable growth of the coke business.

Coking business is the core business, mainly divided into three sectors: self-built, joint ventures, and operation management services, playing a balancing role in heavy asset and light asset management strategy. According to the sixth five-year plan formulated by the company around capacity expansion in 2020, the company plans to achieve an annual coking processing volume of 30 million tons by 2025 through investment, joint ventures, acquisitions, and providing operating management services, with promising growth.

The chemical industry is developing steadily and actively laying out the hydrogen energy sector.

Risun Group takes coking by-products coke oven gas as the starting point and actively extends the refined chemical product line. As of 2023, it has formed five categories, 55 products, 57 various chemical product production lines, and three hydrogen production lines. In terms of hydrogen energy, the company has increased investment in transportation and storage to improve the economic efficiency and signed a strategic cooperation agreement with Dingzhou government to reach cooperation intentions. The company released the "Risun Group Hydrogen Energy Development Plan" in September 2021, with the core development concept of "one line, one network, two wings, and four stages" and the strategic positioning of "undertaking the group's energy strategy, assisting carbon neutrality, and forming a new business growth level."