Huaibei Mining (600985): Excellent Qualifications, Sitting in the East

The main points of the report are the replenishment of production sites and reserve resources. The increase in production capacity and the increase in stock may continue to change the production capacity in the Jianxin Lake mine, and there is room for future production capacity to use the stock.

The company’s current production capacity is 3605 / year, and the main coal types are high-quality coking coal.

Uncertainty about the future exit of mines such as Yangzhuang may lead to a reduction in production capacity, but the overall impact on crops is still controllable, and there is basically no obvious possibility of accrual.

The Xinhu Coal Mine under construction for 300 years / year continued the production capacity change, and the long-term profitable cornerstones of the rich resource reserves in Shaanxi and Mongolia.

Affected by the complexity of geological conditions and inadequate preparations for the expansion of the industry during the downturn period, the company’s coal mine capacity utilization rate has been low in recent years, which has been translated into related supplements in place and the advancement of mechanized and intelligent equipment, and the next year may open up space for production improvement.

High washing leads to the industry’s leading profitability, and the advantage of geographical advantage is obvious.

The company’s coal mines have sufficient washing capacity. In recent years, the company’s coal washing rate has basically been above 80%, and the clean coal washing rate of comparable coal in 2017 reached 46%.

High washing brings high purity. In 2018, the ton of coal revenue was 689 yuan, an increase of 3%.

Affected by the existence of mines and staffing, the company’s upward pressure on cost has broken in recent years. In 2018, the cost of ton of coal increased by 11% to 413 yuan. The increase in the proportion of mechanization and intelligence may provide opportunities for reducing costs and increasing efficiency.

Benefiting from high coal ash, the company’s gross profit per ton of coal is at the forefront of the industry. In 2018, the company’s gross profit per ton of coal was 276 yuan.

The company is located in the main coal consumption area of East China and maintains better cooperation with major customers such as Maanshan Iron and Steel. Under the background of the impact of the reduction of coking coal mine capacity in Shandong and other places, the company’s competitive advantage in East China is increasingly significant.

The performance of coal chemical industry has improved, benefiting from the coking capacity reduction of production areas to the greatest extent.
The performance of coal chemical industry has improved significantly, and the future will benefit the most from coking capacity reduction in Shandong, Jiangsu and other places.

The plant is fully in production and the industry boom is improved, and the performance of coal chemical industry is significantly improved.

In 2018, the company sold 386 tons of coke, an increase of 36%, with an average coke content of 1,937 yuan / ton, an increase of 19%. Coal and coke integrated improved the profitability of coal chemical industry, and the gross profit of the coal chemical industry segment increased by 59% to 4.5 billion yuan.Gross profit (in terms of coke sales) increased by 17% to 1,162 yuan, and the gross profit margin of the sector rose by 2pct to 49%.

The company’s main furnace type is expected to be an advanced 6-meter coke oven, and there will be no impact on high environmental protection expenditure.

With Shandong, the main 南京桑拿网 coke-producing province in East China, the coke production capacity of Jiangsu has gradually withdrawn, and the company’s coking profit may become more prominent.

The capital operation capacity is proficient, and the coal and coke leader is expected to expand the financing channels in multiple ways. The eastern coking coal leader is worth recommending.

Convertible bonds, “clear shares and real bonds” are synergistic with multiple channels of corporate bonds, and the company ‘s flexible financing methods help optimize the capital structure, minimize costs and increase efficiency, and improve the company’s profitability.

With the company’s capital and advantages, the company’s performance is expected to continue to improve.

What do we expect in 2019?
In 2021, the company’s EPS will be 1.

73/1.

82/1.

91 yuan, the 北京夜网 current sustainable corresponding P / E are 7 respectively.

48/7.

13/6.

78 times, covering the first time with a “buy” rating.

Risk Warning: 1.

The company’s coal de-capacity accelerated; 2.

The construction progress of Xinhu Coal Mine exceeded expectations.