Guanghui Energy (600256) Interim Report 2019: Downward Product Price Suppresses Performance and Long-term Value Remains
The lower-than-expected results in the first half were mainly due to lower product prices and lower-than-expected coal sales.
The company’s financial indicators are stable overall, and projects under construction are advancing steadily.
The repurchase program will play an important role in sustainable stability.
It is expected that the company’s average annual growth rate for 2019-21 will be 20%, and it is currently estimated to be at the bottom of history. Maintain the “Buy” rating.
The lower-than-expected results were mainly due to lower-than-expected coal sales due to lower product prices.
The company’s revenue in the first half of the year and net profit attributable to shareholders of listed companies were 64.
2 and 7.
800 million, +7 a year.
3% and -9.
8%, of which Q2 net profit is 3.
400 million, flat year on year, -24 month on month.
The company’s performance was lower than our expectations, mainly due to 1) Jimu and even its output was affected by the accident; 2) LNG fell more than expected resulting in lower than expected revenue; 3) Coal sales were lower than expected.
Financial indicators have remained stable as a whole, focusing on subsequent expenditure rhythms.
In the first half of the year, the company’s asset-liability ratio was 64%, unchanged from Q1, continuing the downward trend since 17 years; capital expenditure was 1.4 billion U.S. dollars (ten years + 600 million U.S. dollars), but basically matched the scale of profits; the company’s interest-bearing liabilities have been in the middle of 18Since then, it has continued to rise, but the financial cost has dropped significantly. Free cash flow is about 200 million US dollars, a slight decrease from the same period in 18 years. The three-rate rate is 14%, which is the same as last year and Q1. The overall financial indicators remain leveling potential.
Coal chemical industry and natural gas advanced steadily, and coal sales fell again.
During the reporting period, the company’s main products, methanol, LNG, and coal-based oil products, respectively increased their sales by 10 times.
8% and 575.
9%, but affected by sluggish demand and falling commodity prices, realized price reductions of -19.
6% and -21.
Established, the company’s coal sales volume -8.
52%, the expected sales volume forecast in the early years (+ 10% -20%), so it is difficult to give play to the advantages of railway transportation costs; in the end, the company continues to steadily advance multiple projects under construction.
Repurchase is conducive to sustainable and stable.
The company announcement will be no less than 5 within 12 months.
At the price of 16 yuan / share, 700 million to 1 billion shares are repurchased, of which 0 is used for employee stock ownership plans.
The company’s 北京桑拿洗浴保健 recent market transaction volume has remained near 5000 million, and it is expected that the repurchase program will gradually integrate and stabilize.
Risk factors: The product price drops sharply; extreme weather in Xinjiang makes the project difficult to run; the rising cost of imported LNG causes the profit to be lower than expected; the progress of other projects exceeds expectations; the company accrues project asset impairment.
Investment suggestion: Considering that the performance in the first half of the year exceeded expectations and the environment in which economic pressure weighed on commodity demand, slightly lower the company’s 2019-2021 net profit forecast to 22.
800 million (previous forecast was 25.
3/37.400 million), with an average annual growth rate of 20%, and the corresponding EPS forecast is 0.
44 yuan, lower the target price to 5.
33 yuan (corresponding to 15 times PE in 2020).
Maintain “Buy” rating.