China Coal Energy (601898): 1Q19 performance exceeded expectations; benefit from increased coal production scale

Q1 2019 results exceeded expectations China Coal Energy announced Q1 results: A-share operating income of $ 29.6 billion, an increase of 14% per year, +9 from the previous quarter.

4%, net profit attributable to mother and father 15.

400 million, ten years +10.

7%, corresponding to a relative profit of 0.

12 yuan, net profit after deduction is 15.

300 million, ten years +10.

3%, H shares return to the net profit of the mother 16.

USD 800 million, a year-on-year decrease of 1%. The difference in earnings of A / H shares mainly comes from special funds in the coal industry and deferred tax adjustments.

The profit in the first quarter of 19 exceeded our expectations, mainly due to the further increase in the production and sales of self-produced coal, which offset the decline in prices and rising costs. The increase from the previous quarter was mainly due to the increase in production, and the decrease in asset impairment and management expenses.

Comments: 1) The production and sales of self-produced coal increased significantly.

Commercial coal production in the first quarter of 1924 tons increased by 38%, + 16% month-on-month, and the self-produced coal sales were close to 2382, each time + 43%, + 4% month-on-month.Linhe and other projects.

2) Coal prices have fallen in the past.

The average selling price of self-produced commercial coal in the first quarter of 19 was 502 yuan / ton, a continuous decline of 6.


3) The unit cost rose slightly.

The unit sales cost of 1Q19A self-produced commercial coal is 217 yuan / ton, each time +3.

5% or +7.

3 yuan / ton, which exceeds the mining engineering cost of +14 yuan / ton per degree (increasing the replacement 南京夜网 of open-pit mines and excavation of wells and mines), and the material cost is +7 each time.

4 yuan / ton, other costs are reduced by 12 yuan / ton per year.

4) Coal chemical industry: 1Q19 polyethylene / polypropylene / urea / methanol grain volume +0% /-2% / + 4% / + 76%, 7% /-1% /-2% /-27% per second.

5) Sales expense budget + 29% or 7.

2 ppm, mainly due to the increase in shipping costs due to the expansion of the scale, the sales expense ratio multiples +1.


6) Ten years of operating cash flow +4.

0x to 41 megabytes.

Development Trend The thermal coal market remains stable.

The current coal demand is in the off-season. The six major power generation groups consume about 59 days of coal per day. Coal production affected by safety inspections will also gradually recover on the margins. However, due to the overhaul of the Daqin Line, which inhibits capacity, coal prices are expected to remain stable in the short term.

Earnings forecasts are based on changes in assumptions such as production. We have raised our A-share 19/20 earnings forecasts by 12/13% to zero.


35 yuan, H shares increased 9/9% to 0.


38 yuan.

Estimated and recommended company A shares are expected to correspond to 19/2014.

8/15 times P / E, maintain Neutral rating and raise target price by 10% to 5.

5 yuan, corresponding to 15 in 19/20.


6x P / E and 4% increase.

The company’s H-share contradiction corresponds to 19/20 of July.8/8.

1x P / E, maintain neutral rating, raise target price by 9% to 3.

8 built, corresponding to 19/20 8.


8x P / E and 9% increase.

Risks Coal demand fell short of expectations; coal prices fell more than expected.