China News Agency, Beijing, May 4th (Reporter Chen Kangliang) Following the good performance achieved last year, China's A-share listed coal companies continued to enjoy the boom in the first quarter and achieved a "good start".
According to statistics from Huajin Securities, in the first quarter of 2022, the 29 A-share listed coal companies achieved a total revenue of about 385.6 billion yuan (RMB, the same below), a year-on-year increase of 30%; net profit of about 60.9 billion yuan, a year-on-year increase of 87% .
Among them, the industry leader China Shenhua Energy Co., Ltd. (hereinafter referred to as China Shenhua) alone achieved a net profit of nearly 19 billion yuan.
According to the first quarterly report of China Shenhua, the company achieved operating income of 83.902 billion yuan, a year-on-year increase of 24.1%; net profit was 18.957 billion yuan, a year-on-year increase of 63.3%.
Zhang Xuxi, an analyst at Tianfeng Securities, said the sharp rise in profits of listed coal companies, including China Shenhua, in the first quarter was mainly due to strong market demand and an increase in the average selling price of coal.
In this regard, Yang Jie, a researcher at the Yimei Research Institute, also holds a similar opinion.
Yang Jie analyzed that coal prices have been running at a high level since the beginning of this year, because inland power plants have increased the number of days available for inventory under policy requirements, and coal demand has surged.
Since February, the cold wave has driven daily consumption to a new high in the same period in recent years.
In addition, factors such as international geopolitical conflicts have also led to rising energy prices, with overseas coal prices rising higher than domestic coal prices, and imports being restricted.
According to China's official data, in March 2022, domestic coal imports were 16.42 million tons, down 39.9% year-on-year; in the first quarter, coal imports were 51.81 million tons, down 24.2% year-on-year.
Zuo Peng, an analyst at CITIC Securities, pointed out that import reduction and supply constraints are the main logic behind the good performance of listed coal companies.
Since the beginning of this year, although the overall performance of coal demand has been flat, the performance of coal prices has continued to exceed expectations, indicating that the supply is tight, and the bottleneck on the supply side mainly comes from the reduction in imports.
The main factor for the decrease in imports is that overseas energy prices remained high under the conflict between Russia and Ukraine, and the advantage of imported coal prices disappeared.
Zuo Peng further pointed out that according to the year-on-year decline in the first quarter, China's annual coal import reduction may be around 78 million tons, accounting for 1.7% of the country's coal consumption, which will have a significant marginal push-up effect on prices.
At present, although overseas coal prices have seen a significant correction from the high point in March, they still have a large premium over domestic coal prices, and import prices are still unattractive.
In response to the performance outlook of listed coal companies this year, Hu Bo, an analyst at Huajin Securities, said that the conflict between Russia and Ukraine has led to a reshaping of the global coal trade pattern, and overseas coal prices have risen higher than domestic coal prices, leading to restrictions on imports.
It is worth noting that the uncertainties in the second half of the year mainly come from the demand side. The impact of the new crown pneumonia epidemic on the economy has exceeded market expectations. The measures and effects of stabilizing growth will affect the duration of the industry's high prosperity.
Considering that the average coal price since the beginning of the year has increased to a certain extent compared with last year, combined with the current supply and import situation, it is expected that the industry's profitability in 2022 will be better than that in 2021.
Zuo Peng also holds a similar opinion. He believes that the overall increase in coal price expectations in 2022 will increase the certainty of listed coal companies’ performance growth.
According to the average price of various coal types in the first quarter and the seasonal characteristics of coal prices, it is expected that thermal coal prices may weaken slightly in April and May due to the off-season, but the average price in the second quarter is expected to remain higher than the average level of last year. The average price may increase quarter by quarter, and the annual average price is expected to increase by 10% to 12% year-on-year.
In addition, with the easing of the epidemic and the implementation of policies to stabilize growth, the demand for coking coal is expected to usher in a new round of expansion, and the price of coking coal is expected to increase by 20% to 25% throughout the year.
Under this coal price assumption, it is expected that mainstream listed coal companies will have clear room for improvement in their performance in 2022.
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