Coal stocks and coal futures soar together

On the morning of March 29, coal stocks and coal futures skyrocketed together. Among them, China Shenhua A shares, a coal giant with a market value of more than 300 billion yuan, had a rare daily limit, and the main contract of thermal coal futures also hit the daily limit. The contract has risen by more than 20% in the past month. %, the rally is like a rainbow.

  In the end what happened?

Rare daily limit for 300 billion coal giants! Coal stocks soared collectively

According to market data, China Shenhua A shares with a market value of more than 300 billion yuan rarely hit the daily limit this morning, and the trading volume increased sharply. As of the close of the morning, China Shenhua reported 19.94 yuan, and the half-day turnover reached 2.15 billion yuan.

China Shenhua Hong Kong stocks rose even more sharply, rising more than 12% in the morning. China Shenhua's A shares and Hong Kong shares both left a clear upward gap.

In fact, most of the other coal stocks also rose sharply this morning, with the entire sector up more than 6% intraday. In addition to China Shenhua, Liaoning Energy also traded by the daily limit. Yanzhou Coal, Hengyuan Coal and Electricity, China Coal Energy, Hengyuan Coal and Electricity, Jinneng Technology, Jingyuan Coal and Electricity and many other coal stocks were among the top gainers.

Recently, a number of listed coal companies have disclosed their 2020 results.

According to the 2020 annual report data disclosed by China Shenhua last Friday evening, the company achieved revenue of 233.263 billion yuan in 2020, a year-on-year decrease of 3.56%, and realized a net profit attributable to the parent of 39.170 billion yuan, a year-on-year decrease of 9.43%.

However, while disclosing the 2020 annual report, China Shenhua also disclosed the dividend of pride, with a cash distribution amount of 35.962 billion yuan.

According to the announcement, China Shenhua intends to distribute the 2020 final dividend of RMB 18.1 per 10 shares (tax inclusive) to all shareholders based on the total share capital registered on the equity registration date for the implementation of equity distribution. Based on the company's total share capital of 19,868,519,955 shares as of March 26, 2021, the proposed cash dividend is approximately RMB 35.962 billion (tax included), accounting for 100.3% of the current year's profit attributable to the company's owners under the 2020 International Financial Reporting Standards, It accounted for 91.8% of the net profit attributable to shareholders of the Company under the Chinese Accounting Standards for Business Enterprises.

According to the research opinion of Tianfeng Securities, according to the annual reports of China Shenhua and Yanzhou Coal Mining, the dividend ratios in 2020 will be 91.8% and 77.13% respectively, which are higher than their minimum dividend ratios. According to the lowest closing price on March 26, 2021, the dividend yields of the two companies are 9.98% and 7.59%, respectively. The dividends in 2020 will exceed expectations, and the high dividend yields demonstrate investment value.

The research point of Ping An Securities believes that Changxie Coal is the ballast stone of the coal sector of China Shenhua Company: In 2020, the company overcame the impact of the new crown pneumonia epidemic and took multiple measures to ensure coal production and market. The coal sector achieved coal sales of 446 million tons (year-on-year). Down 0.2%), the coal volume sold under the annual long-term contract was 190 million tons, accounting for 42.5% of the total sales volume. In terms of coal prices, the average selling price was 410 yuan/ton (excluding tax), down 16 yuan/ton from 2019. In terms of self-produced coal, it achieved 292 million tons (a year-on-year increase of 3.1%), and the company's main coal business was operating steadily.

Coal futures also skyrocketed, thermal coal futures daily limit

Another background for the recent strong rise of coal stocks is that coal prices have continued to rise recently, which is directly reflected in futures prices.

According to market data, various domestic coal futures have generally skyrocketed this morning. Among them, the main thermal coal futures contract has hit the daily limit, and the daily limit is 731.8 yuan / ton, a corresponding increase of 6%.

The main coking coal contract rose more than 7% during the session. The main coke contract also soared more than 6% during the session.

Recently, the price of relevant coal futures has continued to rise. Among them, the main thermal coal futures have risen by more than 20% in the last month or so, and the price has approached the previous high.

The agency sees it this way

Tianfeng Securities believes that the performance of the coal sector is expected to remain stable, and the increase in dividends will help the valuation to move closer to the utility sector. In the medium and long term, due to the stable coal supply and demａnd structure and the strong national policy regulation, coal prices will stabilize within the green range, which will weaken the cyclical nature of the coal industry and enter a period of stable performance. With the implementation of stable and high dividend policy by coal industry companies. The defensive attribute of the coal sector has become stronger, and it has developed into a quasi-public utility. Therefore, the agency expects that the impact of macro pessimism on valuation will be slowly eliminated, and the valuation level of the coal sector is expected to further increase.

The research point of Cinda Securities believes that it is currently in the middle of a new round of upward cycle of the coal economy. Fundamentals, policies, and companies are resonating, and it is time to allocate the coal sector at this stage. On the supply side, the legalization of off-balance sheet production capacity during the “13th Five-Year Plan” period has brought about a marginal convergence of supply increments; the large-scale, intelligent, and standardized new coal mines have significantly raised the industry’s entry barriers. "The transformation requirements under the target, the ability and willingness to build new coal mines have obviously converged, and the future supply-side increment will show a marginal shrinking trend. On the demａnd side, social financing data and fiscal data at the beginning of the year show that the economic recovery has good momentum. The macro policy setting for 2021 is "maintain continuity, stability, and sustainability"; the overall tone for fiscal policy is "more sustainable". Active finance should take into account both stable growth and risk prevention; the domestic economy is expected to maintain a steady growth of more than 6% in 21 years; during the "14th Five-Year Plan" period, while GDP maintains an average annual growth rate of 5%, new energy alternatives are fully considered, and coal consumption is still There will be an average annual increase of more than 40 million tons. Therefore, in 2021, the coal supply and demａnd will tighten year-on-year, the coal price center will move up, and the improvement of corporate profits will be highly certain. In the medium and long term, under the "dual carbon" goal, supply may reflect earlier than demand, and coal is expected to maintain a high degree of prosperity during the "14th Five-Year Plan" period. Capital market expectations are too pessimistic, and there is room for repair. The research report of Cinda Securities said that it is bullish on the coal sector in an all-round way, and continues to recommend paying attention to the historical allocation opportunities of coal.

Tianfeng Securities believes that coal companies have low willingness to build new mines, the industry's fixed asset investment growth has narrowed year-on-year, and the industry's capital expenditure will enter a downward cycle in the future. At the end of the "14th Five-Year Plan", the number of coal mines in the country will be controlled at around 4,000, which is a continuous decrease from 4,700 in 2020. In 2020, the investment in fixed assets of coal mining and washing industry will decrease by 0.7% year-on-year, and the capital expenditure of the industry may enter a downward cycle. .

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