Hengyuan Coal Acquisition of assets quickly improve productivity

 Hengyuan Coal: Acquisition of assets quickly upgrade the capacity
2008-3-28 13:26:00 Code: 600971 of: Yan Haojun Source: Source: China Securities Journal
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Hengyuan Coal (600971) annual report, the company achieved operating income of 1.304 billion yuan last year, an increase of 8.40%; to achieve a total profit of 303 million yuan, an increase of 3.53%; earnings per share of 1.07 yuan .
the company's coal production and sales essentially flat with last year, so the company's coal revenue increased only slightly, however, rapidly rising costs, the gross profit margin declined slightly .2007, the company achieved revenues 1.266 billion coal million, representing an increase of 6.15% in 2006.'s existing mines, including mines and Liuqiao LiuQiao two mines, coal year are poor coal .2007 3.4 million tons of raw coal output of goods sold 3,162,700 tons of coal, and basically the same as last year, at the same time, the company's gross profit margin of the coal business slightly decreased 5.69% year on year, reaching 33.50%. This is mainly because the cost of the coal business has increased by 16.09% year on year, far higher than 6.15% of its revenue Since an increase of the level of .2008, due to the rapid rise in international and domestic coal prices, coal is expected in 2008 gross profit margin levels will be improved.
owned subsidiary of the company put into operation a new thermoelectric power generation for the company .2007 contributed part of the proceeds, the company achieved operating income 053 million yuan electricity, generating 140 million annual power generation degrees, the power business, gross profit margin was 17.95%. This is mainly controlled 82% of the company's new source of Huaibei Thermal Power Co. production due to the company, as a new source Thermoelectric Co., Ltd. is to start operations in 2007, and the main business of coal, coal gangue power generation, electricity is expected in 2008 will have a larger revenue growth, gross profit margin can be maintained level of around 18%.
issuing convertible bonds will allow the company acquired assets of the Group's rapid growth .2007 capacity, to ensure sustainable development of the company, the follow-up resources to increase reserves and expand the scale of operation, the Company issued 400 million yuan to convertible bonds, raising funds and with the acquisition of its own funds in Northern Coal Group Co., Ltd., a wholly owned subsidiary of Anhui Wolong Lake Coal Mine Co. Ltd. and Anhui five coal mine.
which can Wolong Lake Mine All Mine recoverable reserves of 4,853 million tons, annual production capacity of 90 tons, the main production system, the conditions set aside an annual 120 million tons; five coal mine all recoverable reserves of 4,033.95 tons of Ida, the design production capacity of 600,000 tons / year, the main production set aside 90 million tons annual output of the system conditions.
completion of the acquisition, the company more than doubled coal reserves, future production capacity expansion of nearly 50%, while increasing the company's coal product variety, increase the company ability to resist risks. As the two coal mines in the construction process, so loss of 288,000 yuan respectively in 2007 and 8.4 million. With the completion of Block 2 coal production is expected in 2008 will be on the company's coal production capacity and performance growth is very large contribution.
three companies accounted for a greater degree of decline in costs, of which reduce the rapid .2007 administrative costs, the company's three for a total cost 112 million yuan, the ratio of total operating income of 8.56%, compared 13.22% same period last year a greater extent. Among them, the company's administrative expenses decreased rapidly, down 37.19%, reaching 0.81 billion. Selling expenses also declined slightly, reaching 0.31 billion yuan, down 3.29%. Finance costs for the -71.82 million, compared with a year ago -229.89 million increased significantly, mainly due to increase in convertible bonds and deposits to reduce interest expense. expected during the next 2 years the company's cost accounting can be maintained at around 9% level.
's operating income and expenses are large changes in the proportion of .2007, the company achieved operating income of 3,824,900 yuan, representing a huge increase over the same period last year, 795.03 percent, mainly due to the new company owned subsidiary of Huaibei Source Power Company Limited and the company enjoyed tax relief money received from insurance claims increase. to achieve operating expenses 7,544,100 yuan, representing an increase of 250.03 percent over the same period last year, mainly attributable to the increase in loss on disposal of fixed assets.
The company expects EPS for 2008-2009 were 1.78 yuan and 1.94 yuan, dynamic PE values were 20.44 and 18.75 times times. domestic market valuations relative comparison shows that the coal industry average price-earnings ratio of listed companies was 29.11 in 2008, the company valuation significantly below the industry average.