Jinwu Financial News | According to First Shanghai Research and Development, Yankuang Energy (01171) achieved revenue of 106.6 billion yuan in the first three quarters, 21.5% year over year; realized net profit of 11.4 billion yuan, -27% year over year; net profit after deduction was 110.5 yuan, or -22.5% year over year. Q3 achieved 34.32 billion yuan in a single quarter, -15.5%/+5%; net profit to mother was 3.84 billion yuan, -15.63%/+0.7% year-on-month. The slight increase in the company's net profit in the single quarter was mainly due to the average price of 5,500K coal in the Q3 Qinhuangdao market of 852.5 yuan/ton, which was the same as in Q2, and the company's performance was in line with market expectations.
According to the bank, the coal chemical business performed well in the first three quarters. The company achieved revenue of 18.7 billion yuan, -5%; gross profit of 3.9 billion yuan, +0.6% year over year; gross margin was 21%, mainly due to a significant decline in coal as a raw material compared to the previous year; in terms of production and sales, the company's output in the first three quarters was 6.36 million tons, -2.2% year on year; sales volume was 5.7 million tons, -3.4% year on year. The sector as a whole turned a loss into a profit. However, in Q3, the company's output was 2.17 million tons, +7.8% month-on-month; sales volume was 1.95 million tons, +4.5% month-on-month, and gross profit was 1.5 billion yuan, or +13.9% month-on-month. The profit situation in Q3 is stable. It is expected that the company's coal chemical project will continue to maintain a small profit throughout the year, turning a loss into a profit.
The bank said that it is expected that coal prices will remain stable for the next three years, and the company's profits will increase due to increased coal and coal chemical production. Therefore, adjusted net profit to mother for 2024/2025/2026 was 15.35/17.66/19.38 billion yuan, respectively; EPS was 1.53/1.76/1.93 yuan, respectively. In terms of valuation, the company's 25-year net profit is 8 times the average PE of the reference industry, giving the company a buying rating. The target price is HK$15.4, an increase of 52.4% from the current stock price.
