High dividend values are highlighted under steady profits, and valuation increases are expected
The Zhitong Finance App learned that Guotai Junan released a research report saying that coal prices are stable and supported, that coal companies' profits are guaranteed, that listed coal companies have high dividends and high dividend allocation values are prominent, and that valuations are expected to increase. Furthermore, as a procyclical industry, coal will benefit from economic recovery and rising demand, and can be fought back and defended.
▍ Guotai Junan's main views are as follows:
Coal market recovery in 2023: high imports, loosening supply and demand, falling coal prices
In 2023, domestic coal production remained high, imported coal volume increased dramatically, supply and demand loosened, coal prices declined, and profits of coal companies generally declined. In 2023Q1-3, the coal sector achieved net profit of 157.1 billion yuan to mother, a decrease of 25% over the previous year.
2024 thermal coal outlook: supply elasticity is low, demand is resilient, and stable and supported by coal prices
Pressure estimates have been completed for coal prices in 2023, judging that coal prices are strongly supported by the long-term agreement price limit (770 yuan/ton); safety supervision or production restrictions are released in 2024, while the import side is not expected to increase much and demand is resilient; it is expected that in 2024, the overall balance between supply and demand will remain stable, between 900 and 1,000 yuan/ton, showing a high trend throughout the year.
2024 coking coal outlook: supply and demand are tightening, and the coal price center is expected to move upward
Coking coal production is basically stable, and stock mines face the risk of resource depletion and coal quality decline, leading to a decrease in refined coal washing rate year by year; the increase in coking coal imports in 2023 mainly comes from Mongolia, and is expected to increase little in 2024; economic recovery is expected to drive up demand in the black industry chain. It is expected that supply and demand for coking coal will tighten in 2024, and the price center is expected to rise slightly.
Risk warning:
Domestic macroeconomic growth fell short of expectations, demand shocks brought about by the downturn in the global economy, large-scale imports of imported coal, and the release of supply exceeding expectations.