Why do I say that the valuation of Shaanxi Coal Industry is not less than 20 yuan

Let me talk about the changes in the past six months so far.

1. The equity of Xiaobaodang has been reduced from 60% to 55%, reducing the overall net profit of Shaanxi Coal by about 1.5%. Two coal mines in Binchang were added, and net profit increased by 4%. This is equivalent to an increase of 2.5% of the overall net profit of Shaanxi Coal.

2. In the past six months, the sales structure of Shaanxi Coal Industry has changed. From the perspective of equity production, about 25%-30% of the coal will go to the market, and the price of the remaining coal will be limited. The elasticity of Shaanxi coal is greatly reduced.

3. At the end of September, the net cash of Shaanxi Coal Industry was 88.7 billion (including brokerage special account wealth management, LONGi shares), assuming that after the payment for this acquisition, there is still 53.7 billion (in fact, this acquisition is paid in installments). At the end of December, net cash will reach 63 billion.

4. What is the value of Xiaohaotu? This is part of the best quality Yushen Jingtian in Yulin City. If we say that the recoverable reserves of undeveloped mine fields in Yushen mining area are about 12 billion tons. Xiaohaotu No. 1 and No. 3 occupy about 1.5 billion tons (1 billion tons have been paid).

5. Let’s take a look at the current valuation of Shaanxi Coal. According to today’s closing price, 30 billion minus non-net profit * 4.3 times + 63 billion = 193 billion (today’s closing market value).

6. For me, Shaanxi Coal, which has 1 billion tons of high-quality recoverable reserves and greatly reduced elasticity, will pay back the cost in 4.3 years (the coal price will be reduced, and the cost will be paid back in 6 years), giving a chance for certainty.

Risk warning: Coal prices and stock prices fluctuate.

$Shaanxi Coal Industry(SH601225)$

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