Baofeng Energy (600989) Investment Value Analysis Report: Benchmarking: How to Surpass Shenhua?
“Coal-coke-chemical” layout of the entire industrial chain, significant location advantage, Railway and other resource advantages.
Since 2015, the company has begun modern coal chemical conversion from coal to coal-based carbides. At present, the entire coal-coking-chemical industry chain layout has been formed.
After the coal mine is put into production, the self-sufficiency rate of raw materials is expected to increase, and the cost competitive advantage is becoming more and more significant.
Traditional coal chemical industry is accelerating the transition to modern coal chemical industry. Our report in October 2019, “Why are we re-raising coal chemical industry at this time?
-“One of the Coal Chemical Industry Research Series” put forward resource endowment and energy, and the demand for chemical consumption determines the necessity of developing coal chemical industry.
The modern coal chemical industry’s transformation of coal production capacity into scarce clean oil and chemicals is an important change to promote supply-side reforms, and it is also an important way to diversify petrochemical raw materials and ensure energy security.
In the coal chemical sub-segment, short-term potential growth points of coal-based carbonic acid or modern coal chemical industry.
The company’s coal self-sufficiency rate is expected to surpass China Shenhua’s methanol production 60 index / year planned project in the third quarter of 2019. The company’s coal (methanol) production scale has reached 120 microns / year, and its production capacity is at the forefront of the country.
China Shenhua is one of the first coal companies to enter the coal chemical industry in China, with some benchmarking tops.
Through the integration perspective, we 北京夜网 re-disassembled the company and Shenhua prefix business cost structure.
The company’s gross profit margin is slightly lower than that of Shenhua due to insufficient coal self-sufficiency, but the conversion of coal-based carbide technology to Shenhua.
In the future, the annual / annual methanol project of 220-stage coke gasification to 220 will be put into operation. The profitability of coal mines is expected to surpass Shenhua and become a new benchmark for the coal-based impurity industry.
Profit forecast and investment grade: We expect the company’s net profit to be 43 in 2019-2021.
9 trillion, the corresponding EPS is 0.
The current sustainable corresponding PE is 15/12/11.
Combining absolute valuation and relative valuation, we give the company 17 times PE in 2019, corresponding to a target price of 10.
Covered for the first time, giving “overweight” rating.
Risk reminders: the risk of rising coal prices; the risk of lifting restricted stocks; the risk of a significant drop in international crude oil prices; the risk of changes in industry policies.