[Value Catalog]: Research report center with opinions
Looking back on 2023: thermal coal**, domestic thermal coal** fluctuated in a narrow range, falling first and then rising. The average price of thermal coal (Q5500K) in Qinhuangdao Port during the year was 72684 yuan ton, compared with the average price of 736 yuan in 202273 yuan ton down 989 yuan ton. Coking coal**, in 2023, coking coal** will show a "V" shaped trend, that is, stable in the first quarter, second quarter**, third quarter**, and four seasons. In 2023, the average price of main coking coal in Jingtang Port will be 228289 yuan ton, compared with the average price of 2840 in 202204 yuan ton down 55715 yuan ton. Thermal Coal Demand - Thermal Power, Thermal Power Demand for Coal remains strong. Thermal coal demand - building materials, demand continues to be sluggish, but has stabilized; The demand for chemical industry is strong in 2023. The demand for coking coal and steel exports have boosted demand.
The supply of thermal coal, the intensity of safety supervision has been increased, and the domestic increase is limited. Imports remained high, but the growth rate narrowed. Since the second half of 2023, the safety supervision of the main producing areas has continued to be strict, and the number of coal mines that have stopped production or reduced production has increased significantly compared with the previous period, making it difficult to increase production.
Looking ahead to 2024:
Requirements: 1thermal coal demand, (1) power sector. It is expected that the installed capacity of thermal power will remain stable, and the role of energy ballast will continue to be maintained. (2) Building materials industry. In recent years, the absolute value of cement clinker production capacity has remained stable, and the growth rate has slowed down. (3) Chemical industry. Non-electricity demand has recovered, and chemical coal has increased significantly, and it is expected that coal for coal chemical industry will continue to grow. 
2.Coking coal demand, steel industry. The steel industry is running steadily, and coking coal demand is expected to continue to recover. In 2024, with the force of fiscal policy, steel inventories will be further reduced, the operating rate of blast furnaces will continue to maintain a high level, and the demand for coking coal in the steel industry is expected to further increase.
Supply: Domestic supply: In the future, safety supervision will not be relaxed, and coal supply will be limited to a certain extent. It is expected that in the next few years, the number of new mines will decrease, and the growth rate of fixed asset investment in the industry will return to a low level. Import supply, coal imports are expected to remain stable in 2024. At present, there is no large amount of coal production capacity overseas, and it is difficult to increase production significantly, and the demand of major consumer countries has not decreased significantly. Considering the increasingly strong demand for coal in India, Southeast Asia and other places, it is expected that China will not have much room for growth in coal imports, and imports may remain stable.
*: Thermal coal**, the price of thermal coal remains stable. It is expected that the overall balance of supply and demand in 2024 will be maintained, and the coal price will remain stable, and it is expected to show a trend of low before and then high throughout the year. Coking coal**, the center is expected to move upward. Coking coal supply and demand are expected to tighten in 2024, and ** is expected to move up slightly.
Investment direction: The supply and demand situation of market dynamics determines the central level of coal, and coal is still at a high level. **In 2024, the supply and demand of the coal market will be basically balanced, and the coal ** center will be stable.
The coal industry is characterized by high dividends.
After the supply-side reform, the operation of the coal industry has been greatly improved, and the coal enterprises have abundant cash flow and strong dividend distribution ability. The profitability of the coal industry is good, and the high dividend highlights the investment value. The valuation of coal stocks is currently at the bottom of history, with PE valuations mostly in multiples, while reasonable valuations are generally around 10 times, and coal companies are undervalued. It is recommended to give priority to the top enterprises that are undervalued. Maintain the industry "Recommended" rating.
Investment advice: long-term optimistic about stable and high dividend target China Shenhua (601088SH), Shaanxi Coal Industry (601225sh）。In the short term, focus on areas of marginal improvement with performance resilience. It is recommended to focus on Guanghui Energy (600256.) with elastic performance in the thermal coal sectorSH), Jinkong Coal Industry (601001sh）；The metallurgical coal sector has a pro-cyclical opportunity for marginal improvement: Lu'an Environmental Energy (601699SH), Huaibei Mining (600985sh）。
This is an abridged excerpt from the report, the original PDF of the report
Fossil energy-coal industry 2024 investment strategy: actively grasp the changes in coal prices, it is recommended to pay attention to high-dividend targets-Hualong **-20240111 [page 36]".
Report**: Value Catalog