China Shenhua (601088) first quarterly report comments: volume and price decrease slightly, profit is increasing, cash flow has improved significantly in the long run

China Shenhua (601088) first quarterly report comments: volume and price decrease slightly, profit is increasing, cash flow has improved significantly in the long run

Key points of the report describe the company’s operating income of 570 in Q1 2019.

11 trillion, down 9 a year.

5%, net profit to mother 125.

8.7 billion, an annual increase of 8.


The increase in performance was mainly due to the establishment of a joint venture with Guodian Power to recognize the relevant investment income on the delivery date.

2.1 billion.

After deduction, the net profit of the mother is downgraded for ten years.

5% to 113.

The 4.6 billion event comment fell in volume and price, and the coal business revenue was broken down.

In Q1 2019, the output of commercial coal was 7,150, which exceeded the decline by 0.

8%, the sales of commercial coal fell by 10510, exceeding the decline of 3%, the volume decreased due to the decline in January Shenbao, Daliuta and Bulianta and other coal mines output. In addition, Yulin Mine temporarily suspended production of some mines also led to a decline in production.

At the lowest level, due to the high base in the same period of last year, the comprehensive benefits of the company’s 无锡桑拿网 commercial coal fell by 29 yuan / ton to 411 yuan / ton, of which the direct coal price gradually decreased by 5 yuan to 315 yuan / ton, and the sewage coal dropped by 46 yuan to 473Yuan / ton.

According to the contract pricing mechanism, the company’s annual long-term association, monthly long-term association and spot sales respectively accounted for the first quarter of 2019.

5%, 40.

8% and 10.

7%, corresponding costs (excluding tax) 369, 471 and 369 yuan / ton, once decreased by 12, 62, 35 yuan / ton, respectively.

The same amount of price and price fell in the first quarter of the coal business income (before the merger offset) downgraded by 8 each time.

9% to 444.

600 million.

The total cost of the coal business decreased, and gross profit margin increased.

The company’s production cost per ton of self-produced coal increased in advance2.

From 7 yuan to 117 yuan / ton, the expansion and replacement of open-pit coal mines such as Harwusu and the rising price of electricity for coal production in Inner Mongolia have led to the continuous increase in the cost of raw materials, fuel and power per ton of coal.

2 yuan, the labor cost per ton of coal increases by 1 every year.

At 8 yuan, the depreciation per ton of coal decreased by a few years due to the depreciation of some equipment.

3 yuan.

Taken together, the total cost of coal business (before consolidation and offset) has decreased year by year due to the decline in the amount of coal purchased and the purchase price.

7% to 317.

43 ppm, the gross profit margin of the overall coal business rose by more than 0.

7pct to 28.

The gross profit per ton of coal (including trade coal) is 6% lower than before.

From 74 yuan to 121 yuan / ton.

The issuance of electricity continued to increase (gradual adjustment), and the profitability of the power business improved.

In the first quarter, the company’s power generation volume was 464 and 436, respectively.

100 million kilowatt-hours, a decrease of 30 each year.

2%, 30.

2%, mainly because the company’s relevant assets used to form a thermal power joint venture with Guodian Power completed the delivery on January 31, 2019, offset by a comparable caliber, the company issued in the first quarter, and the sales volume increased.

71%, 1.25%.

In the first quarter, the electricity sales price increased by 1 every year.

89% to 323 yuan / MWh, the cost of electricity sales fell 0 year-on-year.

6% to 261.

At RMB 5 / MWh, the gross profit margin of the power generation business (before the consolidation offset) increased significantly2.

9 points to 23.


Investment suggestion: abundant cash flow (outgoing purchase of coal and coal-fired power plants, reduction of taxes and fees, net operating cash flow after excluding the influence of finance companies, also increased by 81)

2%) and solid performance, EPS is expected to be 2 in 2019-2021.



26 yuan, corresponding to P / E of 8.



65 times, maintain “Buy” rating.

Risk Warning: 1.

Short-term economic growth, weak electricity and coal demand; 2.

Affected by the environmental protection and other factors of the safety supervision, the company’s mine output was reduced.