Coal Industry (600188): Shilausu Coal Mine Obtains Approval and Output Forecast Is Gradually Rising

Subsidiary Haosheng Coal Industry Shilawusu Coal Mine obtains approval According to the company’s announcement on May 9, the company’s Haosheng Coal Industry Shilawusu Coal Mine has recently obtained the approval of the Ministry of Natural Resources Mining Rights License, Shilawusu Coal MineWith a production capacity of 1,000 for the first time, we believe that the Shilausu Coal Mine has obtained approval, and the company’s coal mine production stability will be improved, which will increase profitability.

Shilawusu’s output in 19Q1 was 44 tons, which was continuously reduced by 120 inches. According to the company’s first quarter report, Shilawusu coal mine output 44 was replaced in the first quarter of 2019. For every 120 tons of output reduction, the cost per ton of coal was 296 yuan / ton, which increased by 118%.

In 2018, the output was 329 tons, minus 281 tons per year, and the cost per ton of coal was 332 yuan / ton, which increased by 130%.

Shilawusu coal mine’s Q1, Q2, Q3, and Q4 coal production 青岛夜网 in 2018 were 164 sieving, 23, 66 end points, and 75 lengths. The increase in production since 18Q2 is one of the preliminary results that led to the company’s overall 18-year ton coal cost increase.(The cost per ton of coal for 18 years is 303 yuan / ton, an increase of 14% per year).

In the long run, Shilausu’s design capacity is 1,000 tons, and the output in 2017 and 2017 has dropped significantly (only 610 and 329 tons). The approval obtained has been converted, production has returned to normal, and raw coal production has been promoted.

Initial full production of coal mines + commissioning of mines under construction, contributing to increased production The company’s potential for coal mines to increase production breakthroughs: (1) Gradually the company ‘s Shandong headquarters has been affected by mining disasters and safety certification, and coal mine development has returned to normal; (2) According to the annual report, coal mines under construction in Shandong haveWanfu Coal Mine (500mg production capacity); (3) The company’s Zhuanlong Coal Mine production capacity increased from 500 tons to 1,000 tons at the beginning of 2019 (according to the company’s announcement on January 2). In addition, the large mines in the Mongolian region of the company also included Yingpanyu Coal Mine (1200Tons), Shilawusu coal mine (1,000 tons), the total production capacity of the three mines reached 3,200 tons, and the actual raw coal output of the three mines in 2018 was about 1,816 tons, and the company’s output will still increase in the future.
Earnings forecast and investment rating follow Chinese corporate accounting standards. The company’s EPS for 2019-2021 is expected to be 1.

75, 1.

86 and 1.

RMB 99, corresponding to the dynamic PE of A shares for 2019-2021 is 5, respectively.

97 times, 5.

62 times and 5.

27 times.

The company’s production capacity and output scale are at the forefront of the industry, its operating conditions have gradually improved, and its potential for increasing production has broken through in the future.

According to the company’s announcement, the construction of the second coal chemical project in Ordos and Yulin Nenghua is progressing rapidly to ensure gradual delivery in the fourth quarter of 2019, and coal chemical is also expected to contribute to the performance increase.

The company PE has been at 5 since 2018.

Between 6 and 14 times, the current expectation is at the expected level, giving the company 8 times the 19-year PE, a reasonable value of 14 yuan per share, with reference to the A / H share premium factor, giving the H share a reasonable value of 10.

77 Hong Kong dollars per share, maintaining the company’s A, H shares “Buy” rating.

Risk reminder: coal prices fall more than expected, safety accidents occur in coal mines, and the company’s cost increases too quickly.