Event: On August 15, the company announced a transaction plan to acquire coal, pithead coal-fired power, coal-to-oil, coal-to-gas, and coal chemical assets from its controlling shareholder National Energy Group, along with an announcement regarding the planned interim profit distribution for 2025.
Target assets scale approaches 100 billion yuan. This transaction involves 13 target companies in total, with the listed company purchasing assets from National Energy Group through issuing A-shares and cash payments, and acquiring assets from Western Energy through cash payments. As of the end of 2024, the target assets had combined total assets of 258.362 billion yuan and combined attributable net assets of 93.888 billion yuan. In 2024, the target assets collectively achieved operating revenue of 125.996 billion yuan, combined non-recurring attributable net profit of 8.005 billion yuan, and combined non-recurring attributable net profit after excluding the impact of long-term asset impairment losses of 9.811 billion yuan. Currently, the A-share issuance price has been set at 30.38 yuan per share. The transaction consideration and proportion of various funding sources have not yet been disclosed, making it temporarily impossible to calculate the impact of the acquired assets on the company's EPS.
Growth without compromising dividends, emphasizing shareholder returns, with 2025 interim dividend ratio no less than 75%. The company plans to conduct interim profit distribution for 2025, with distribution amounts not less than 75% of the attributable net profit for the first half of 2025. Based on the company's performance forecast, we calculate the interim dividend per share to be approximately 0.89-0.97 yuan. Using the closing price on August 15, this translates to A-share dividend yields of 2.4%-2.6% and H-share dividend yields of 2.6%-2.9%.
Target assets include multiple large coal mines, with coal resources and production capacity significantly enhanced after restructuring. The company has not yet disclosed the resource situation of the target assets, but the preliminary plan mentions that Xinjiang Zhundong Open-pit Mine under Xinjiang Energy has approved production capacity of 35 million tons per year and recoverable reserves exceeding 2 billion tons. Additionally, the target companies own other leading domestic coal mines including Xinjiang Hongshaquan No.1 Open-pit Coal Mine (30 million tons/year), Xinjiang Heishan Open-pit Coal Mine (16 million tons/year), and Inner Mongolia Hesige Wula South Open-pit Coal Mine (15 million tons/year). According to our analysis, in 2024, National Energy Group had coal production of 620 million tons and sales of 850 million tons, while China Shenhua had coal production of 330 million tons and sales of 460 million tons. National Energy Group still has nearly 300 million tons of production capacity outside the listed company. Based on incomplete statistics, this restructuring involves a total coal production capacity of 279 million tons and under-construction capacity of 20 million tons. China Shenhua currently has coal production capacity of 375 million tons, under-construction capacity of 16 million tons, and planned capacity of 40 million tons. If all these assets are injected, the listed company's coal production capacity would increase by 74.5%, and under-construction capacity would increase by 1.25 times.
Investment recommendation: The company operates steadily and optimizes resource allocation through asset injection. Without considering this asset restructuring, we forecast attributable net profits for 2025-2027 to be 48.012/49.368/49.732 billion yuan, corresponding to EPS of 2.42/2.48/2.50 yuan respectively, and PE ratios of 16/15/15 times based on the August 15, 2025 stock price. We maintain a "Recommended" rating.
Risk warnings: Significant decline in coal prices; thermal power demand below expectations; restructuring progress below expectations.