Category: Money Tips Date: 2006-12-21
Strongly recommended-A (upward)
The company's business strategy is the integration of coal-integration and coal. Of coal, at present the main building of Xingxian project, to take recycling one sun, when the company's coal production capacity will reach 43 million tons, lower than the current capacity of 13 million tons increase of 230%. Xingxian completion of the project will greatly reduce the burden on the parent company personnel mines, after which the company will gradually acquire the parent company of the coal mine, and further to make a massive coal the main industry. In power generation, to continue to be the main electric power industry, the company will plant one Gujiao later, continue to invest in building power plants Gujiao 2 2 * 60 MW (in 2008 construction projects included in the planning, completion is expected mid-2009), Xingxian 1.47 million in the construction of power plants, in addition, the recent proposed acquisition of a 2 * 60 MW power plant. Coking business, has acquired the Shanxi Coking (holding 19.02%), the company's future acquisition of the parent company will be coking plant.
Is the leading enterprise coking coal. Company mining coal for coking coal, a state of sexual exploitation of scarce species protection. The coking coal as a domestic leading enterprises, on the downstream with strong pricing power.
Short-term: both coal production in a no-growth: The company approved the existing four coal 12.8 million tons production capacity, actual production is currently stable at around 13 million tons.
Long-term: Xingxian item (oblique groove Coal Mine Extension) will be implemented in the Western Hills recycling strategies, plans of coal production was 30 million tons, compared with 2.3 times the current output growth.
Registered capital of 450 million yuan, the company holding 99.33% of the Shanxi Xishan Jin-xing the energy companies to invest in the construction Xingxian items: Ke-watt railways, oblique and oblique groove groove Oi coal mines, Xingxian mines, thermal power units.
Ke W Railway (kelan - watang) is inclined groove Coal Mine Expansion Project, the most important supporting projects with a total length of 50 km, 1.176 billion yuan investment in the project budget. At present the railway bridges and tunnels basically take shape, the longest two days of ancient cliff tunnels Wada Jiaya the tunnel has been run through the tunnel is expected to completed by the end of 2007. Designed to capacity 18 million tons, the future increase to 2,300 million tons. .
Now subject to production of helical groove coal rail transport, with only a mining face, in 2006 production of 220 million tons, annual output of 2.5 million tons is expected to 07. Ke tile repair the railway pass, the oblique groove mine would add another one face, 08 will increase annual production to 500 million tons.
Ke-watt railway is completed, Xingxian mine coal prices are expected to pit from the current price of 125 yuan / ton train Juban Jia raised to 265 yuan / ton in the planning and construction of a helical groove Oi output 15 million tons, the EIA has passed , is about to begin large-scale construction is expected to formally put into operation early in 2009. 2 Planning Xingxian mine 10 million tons is expected in 2011.
In addition, the proposed construction of 1.47 million kilowatts supporting the thermal power units.
Coal prices: in 2007 an integrated coal prices rose 11 yuan / ton, an increase of 2.8%.
The company's coal, coking coal and thermal coal is divided into two categories, respectively, of total sales of 70% and 30%.
Domestic coking coal contract prices of 30 yuan / ton, thin coal flat. (Fat) Main coking coal (about 500 million tons, accounting for 62% of coking coal sales) price 30 yuan / ton, thin coal (about 300 million tons, accounting for 38% of coking coal sales) prices were flat. Domestic coal prices are not tax rose 17 yuan / ton, an increase of 3.3%.
Decline in export coal prices and quantities. Signed by the current international price of coking coal exports of 98 U.S. dollars, expects 2007 export prices of 785 yuan / ton, compared with the company in 2006 the export price of 850 yuan / tons, down 7.6%. Coking coal export volume is expected to grow from 350,000 tons in 2006 down to 2007 to 20 million tons.
Coking coal in 2007 (including exports) Consolidated excluding tax average rose about 9 yuan / ton, an increase of 1.7%.
Thermal coal contract price of 30 yuan / ton, non-tax average price rose 23 yuan / ton, an increase of 12%. The company's steam coal is divided into two, the company sold the original thermal coal mine about 360 million tons, the current selling price of 230 RMB / ton, oblique groove 2007 of the steam coal production in coal mine about 250 million tons, is currently priced around 125 yuan / t. As the price of the lower oblique groove coal Steam Coal sales volume increases, not tax price of steam coal increased by an average only about 23 yuan / ton, an increase of 12%.
Taking into account changes in the structure of coal sales and coal price increases is different from the company expects 2007 consolidated coal price rose 11 yuan / ton, an increase of 2.8%.
High power prices. Nishiyama Gujiao thermoelectric power plants and electricity prices increased 1.64 points, up 6.33%. The company has three plants: Synergy generation (ie, Gujiao power plant) 2 * 30 MW (owned 55%), Western Hills Thermal 3 * 5 MW (90.89% stake), 2 * 06 thousand kilowatts gangue power plant.
From June 30, 2006 copy, see power from the implementation of Synergy Power 2 * 30 MW thermoelectric Western Hills 2 * 50,000 kilowatts coal-fired generating sets standards for the Internet price 0.2754 yuan per kWh (including 3 # Unit in the by the end of 2006 and net electricity generation, electricity intended to 0.2754 yuan per kWh), the original price of 0.259 yuan Internet / kWh, an increase of 6.33%.
Gujiao power plant gradually entering the harvest period: 55% of the old cross-shareholding power plant 2 * 30 kw thermal power unit, after the formal operation in 2006 after one year, and gradually into the harvest period in 2006 pre-tax profit of 1.6-1.8 billion yuan, the company's contribution to earnings per share of about 0.05 yuan. With the gradual repayment of huge loans, finance charges are expected to gradually decline in future performance will have a more substantial growth.
Increase in the cost of the proposed policy on the profit and loss impact of lower than expected: about 15-25 yuan / ton.
Sustainable development policies in Shanxi Province intends to increase the three pilot costs: Mining environmental governance to restore security (extract 5 yuan / ton, business retention), converting coal development fund (extract 10 yuan / ton, business retention), the Sustainable Development Fund about 5-25 yuan / ton (all turned over, in which steam coal 5-15 yuan / ton, anthracite 10-20 yuan / ton, coking coal and 15-25 yuan / ton), in theory, increase costs 20-40 yuan / t.
As the large-scale coal mining companies have spent to restore margins and Environmental Governance Development Fund for converting coal-related costs, the current reimbursement policy is only the previous accounting policy change after the first provision for expenditure in the form of the two costs on the company's profit and loss of basic no effect on the.
The company's coal is mainly coking coal, the Sustainable Development Fund provision for standard 15-25 yuan / ton, due to be completely turned over, the company's performance would constitute a substantive impact.
Taken together, the three sustainable development policy provision for the cost impact of the company's profit and loss is only 15-25 yuan / ton.
Policy for sustainable development pilot project in Shanxi Province is currently being submitted to the State Council, pending, its impact on the company's performance and size of the time is still uncertain.
Profit Forecast: Expects the company in 2006, 2007 and 2008 earnings per share was 0.82 yuan, 0.89 yuan and 1.16 yuan. After the completion of the project in 2009 Xingxian earnings per share will reach 1.96 yuan.
Valuation and Investment Ratings: We believe that the cost of the coal industry completely removed, a reasonable valuation should reach 15-20 times earnings. Taking into account the company belongs to leading enterprises in coking coal, but has good future growth, we are careful to give the company a valuation of 18 times the level of earnings. In accordance with 2007 earnings per share basis, the company's reasonable price 16.02 yuan, according to 2008 earnings per share basis, the company's share price of 21.85 yuan.
A reasonable valuation of the company's range of about 16-21 yuan (corresponding to 2009 PE is only 10.71 times). Our company's investment rating rise from the previous recommendation for a strong recommendation.
