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Zhongyuan Securities Wang Zhilei
"Jiangnan Coal Sea" overlord. The company is the largest listed coal enterprise south of the Yangtze River in China and the only one in Guizhou Province. In the first half of 2012, the company produced 6.33 million tons of raw coal, realizing a total operating revenue of 4.34 billion yuan.
Exclusive geographical advantages. Guizhou, where the company is located, is the largest coal producing province in southern China. The predicted coal reserves rank fifth in the country, exceeding the total coal reserves of 12 provinces, autonomous regions and cities in southern China. The surrounding provinces and regions are all coal shortage provinces, and only Guizhou in the south of the Yangtze River is a net coal transfer province. The geographical advantages are unique.
The "No. 2 Document" of the State Council boosts Guizhou's industrial take-off. The "No. 2 Document" has made the development of Guizhou Province a national strategy, driving the rapid growth of coal demand. It is estimated that by the end of the 12th Five Year Plan, the coal supply and demand gap in Guizhou will exceed 30 million tons.
Outstanding growth. The six coal mines in the headquarters of the company currently have a production capacity of about 11.1 million tons, reaching 18 million tons during the "12th Five Year Plan" period. The company controls Mayi Coal Industry, Hengpu Coal Industry and shares in Songhe Coal Industry and Shouqian Resources, and gradually reaches the capacity of 15 million tons after technological transformation. In general, the total capacity of the company during the 12th Five Year Plan period will reach 33 million tons, about three times the current capacity.
The expectation of asset injection is strong. Panjiang Group, the parent company of the Group, is a 50 million ton coal enterprise in Guizhou Province during the 12th Five Year Plan. In 2012, Guizhou Provincial Government proposed that Panjiang Group's coal production capacity should reach 64 million tons by 2015, which is further improved than the original plan. At present, the Group Xiangshui Mine has a capacity of 4 million tons in the first phase; The newly incorporated Liuzhi Industrial Mine has an existing mine capacity of 6 million tons, which is being reconstructed and expanded. The parent company promises to inject into the listed company after conditions are ripe.
Profit forecast. It is estimated that the company's EPS in 2012 and 2013 will be 1.06 yuan and 1.15 yuan respectively, corresponding to 15 times and 14 times of the P/E ratio. The valuation is relatively high. However, considering that the company benefits from the development of Guizhou region, the investment rating of "overweight" will be given.
Risk tip: The macroeconomic downturn brings the risk of a sharp decline in coal prices.
