China Shenhua (601088): 2018 deducted non-net profit 46.1 billion pre-dividends 17.5 billion

Event: On March 23, 2019, the company disclosed its 2018 annual report.

The scale of the report, the company achieved operating income of 2641 million, an annual increase of 6.

2%; net profit attributable to shareholders of the company 438.

67 ppm, a decrease of 2 per year.

6%.

Rationale benefits 2.

219 yuan, the proposed dividend is 0.

88 yuan.

Comment deducted 460 net profit after returning to mother.

65 ppm, a 10-year increase2.

1%, in line with expectations: According to the announcement, the company incurred non-operating expenses in 2018 due to the transfer of “three supply and one industry” expenditures and increased external donations.

40,000 yuan, an increase of 177 per year.

65%, resulting in a decline in net profit attributable to mothers.

But after excluding the impact, profits are increasing every year.

In the single quarter, the fourth-quarter performance declined year-on-year.

According to the annual report, the company achieved a net profit of 85 attributable to its mother in the fourth quarter of 2018.

8.9 billion, down 8 a year.

51%, down 30 from the previous month.

18%.

Due to settlement at the end of the year, management expenses and financial expenses increased by 19 in the fourth quarter.

16% vs. 40.

13%. In addition, due to the transfer of “three supply and one industry”, non-operating expenses incurred in the fourth quarter were 27.

1.7 billion.

The proportion of coal long-term cooperation reached 82.

3%, stable performance: the company achieved self-produced coal production in 20182.

9.7 billion tons, an increase of 0 in ten years.

4%, sales of commercial coal 4.

6.1 billion tons, an annual increase of 3.

9%, of which the annual long association is 2.

2.1 billion tons, accounting for 73 of self-produced coal sales.

5%, accounting for 47 of total sales.

8%, priced at 381 yuan / ton; monthly sales of long-term association is 1.

5.9 billion tons, mainly from purchased coal, accounting for 34 of total sales.

5%, pricing is 511 yuan / ton; spot sales are 0.

8.2 billion tons, accounting for only 17.

7% per ton is 401 yuan / ton; the comprehensive bid for commercial coal is 429 yuan / ton, with an increase of 0 per ton.

94%.

The company’s self-produced coal costs in 2018 were 113.4 yuan / ton, an annual increase of 4.

5%, mainly due to the increase in production preparation and the increase in employee wages.

Due to the increase in costs, the company’s coal business gross margin declined in 20182.

4 up to 27.

5%.

With the Haerwusu Mine Prairie Occupation Certificate, the disposal of mining continuation land has been processed, and the pre-approval of the resumption of land at the Baorixile Mine Quarry, and the gradual production of Qinglong Temple and Guojiawan, the company will produce coal in 2019.The volume is expected to increase by about 1,400 tons.

In terms of prices, we believe that overproduction management in 2019 may become the focus of safety inspections. Overproduction is restricted to hedge the release of new capacity. Therefore, thermal coal supply may experience negative growth in 2019, and the price center is expected to remain the same as 2018.More than 70% is the annual long-term association. Although the length has increased, it is expected that the scale will maintain a steady and rising pattern while the thermal coal price remains firm.

Cost reduction and efficiency increase of power business: As Jiujiang, Fuping and Shenwan units are put into operation, the power generation has increased significantly. In 2018, the company’s cumulative power generation was 2,853.

200 million kWh, an increase of 8 in ten years.

5% to complete a total of 2675 electricity sales.

900 million kWh, an increase of 8 in ten years.

7%.

The electricity price was 318 yuan / MWh, an increase of 1 over 2017.

9%, the utilization hours of power generation equipment increased by 200 hours to 4,834 hours compared with 2017.

In terms of cost, the unit cost of electricity sold in 2018 was 253.

8 yuan / MWh, a decrease of 2 from 2017.

2%, mainly due to the increase in the amount of electricity generated to dilute fixed costs.

The cost reduction and efficiency increase of the power business were significant, and the gross profit margin increased3.

7 up to 22.

6%.

The company’s power generation is expected to continue to increase in 2019. In addition to Fuping Thermal Power, Jiujiang Power and Shenwan Energy, which will start production in 2018, continue to contribute incremental growth, Luoyuan Bay Port Power Company (2 * 100MW, 51% equity) will start production in 2019Considering the increase in the number of hours of power generation utilization, an increase of about 10 billion kilowatt hours is expected.

The cost of transportation business generally increased: in terms of railway business, the total turnover of its own railway transportation reached 283.9 billion ton kilometers, surpassing the growth rate4.

0%, the best level in history, mainly benefited from the increase in the company’s own coal trading volume, but due to the increase in intermodal freight, fuel costs and labor costs, gross profit margins fell.

4 up to 60.

2%.

The output of Harbin and Bao 深圳桑拿网 mines will increase every year in 2019, and the company’s railway traffic is also expected to continue to increase.

In terms of port business, the sales of coal and coal are gradually realized2.

700 million tons, an annual increase of 4.

6%; of which, coal sales through own ports2.

3.8 billion tons, an annual increase of 4.

6%, but affected by the increase in dredging fees, the gross profit margin fell by 5.

5 up to 50.

8%.

The advanced segment achieved the highest expected freight volume1.

04 billion tons, an increase of 11 in ten years.

4%; spring turnover 89.

9 billion tons of nautical miles, an increase of 11 in ten years.

8%, but as a result of rising chartering costs and rising oil prices, the gross profit margin of the segment decreased by 2%.

7 perfect to 22.

3%.The port tungsten is directly 天津夜网 related to the company’s coal sales, so it will translate into a rebound in the company’s coal sales, and the port tungsten will also increase.

Initial volume reduction and price increase, gross profit margin increased: According to the announcement, the company gradually sold 61 in 2018.

13 preferred products, down 3 each year.

49%, of which 31 were polyethylene sales.

54 Initially, it fell by 2 each year.

8%, polypropylene 29.

77 at least, down 3 per year.

6%.

In terms of prices, the pricing price went up, the decline in polypropylene penetrated, the price of polypropylene rose 14% to 7,327 yuan / ton, and the price of polyethylene rose 0%.

9% to 7442 yuan / ton.

The cost has remained basically stable, and the unit cost of polyethylene has dropped by 0 every year.

5% to 5447 yuan / ton, polypropylene cost increased slightly.

1% to 5309 yuan / ton.

Price increase and cost decrease can realize the business to achieve gross profit margin24.

9%, an increase of 4 over the previous year.

3 units.

Proposed cash dividend 175.

30,000 yuan, the dividend payment rate is 39.

9%: According to the announcement, the company plans to pay 0 dividends.

88 yuan / share (including tax), a total of 175.

30,000 yuan (including tax), accounting for 39% of net profit attributable to mothers.

9%, calculated based on the market value on March 23, and the dividend is converted into 4.

16%.

Investment suggestion: Maintain Buy-A investment rating. We estimate the company’s net profit for 2019-2021 to be 462.

5.6 billion, 471.

2.2 billion, 480.

95 trillion, corresponding to 2 EPS.

33 yuan, 2.

37 yuan, 2.

42 yuan.

The 6-month target price is 25.

58 yuan, equivalent to 11 times the price-earnings ratio.

Risk warning: coal prices fall sharply, thermal power demand is less than expected