20230306-招银国际-兖煤澳大利亚-03668.HK-Inclusion_in_Stock_Connect_a_re-rating_driver_7页_961kb
报告摘要
Yancoal Australia (3668 HK) Summary
Core Content
Yancoal Australia (YAL), a Hong Kong-listed company, has recently been included in the Stock Connect program, which is expected to increase its trading volume and potentially trigger a re-rating. The inclusion marks the first time a foreign company is added to the list, highlighting the company's strategic importance and attractiveness to Mainland investors. YAL offers a high dividend yield of 20% and is currently undervalued with a P/E ratio of 2.2x for 2023E, making it an appealing investment opportunity.
Key Points
Dividend Policy
- Management believes the current dividend payout of 45% is a consolidation of several factors, including debt repayment and capital expenditure.
- Final dividends are fully franked, meaning no dividend withholding tax will be applied to Hong Kong investors.
Stock Connect Inclusion
- YAL is included in the updated list of stocks eligible for the Stock Connect, effective from 13 Mar.
- This inclusion is expected to increase liquidity and attract more Mainland investors, which may lead to a re-rating of the stock.
Coal Price Expectations
- Management does not anticipate a sharp decline in coal prices due to limited new supply.
- Thermal coal price assumptions are A$350, A$300, and A$250 for FY22E, FY23E, and FY24E respectively.
Cost Trends
- YAL expects an increase in sales volume every quarter, which will help reduce unit costs sequentially.
- Unit cash operating costs have been declining, with a notable decrease in 2022E, and are projected to continue this trend.
Key Financials
Earnings Summary
| Year | Revenue (AUD mn) | YoY Growth (%) | Net Profit (AUD mn) | EPS (Reported) (AUD) | YoY Growth (%) | P/E (x) | P/B (x) | Yield (%) | ROE (%) |
|---|---|---|---|---|---|---|---|---|---|
| FY20A | 3,473 | -22.1% | -1,040.2 | -0.79 | na | 4.2 | 0.5 | 0.0 | -18.3 |
| FY21A | 5,403 | 55.6% | 790.6 | 0.60 | na | 4.2 | 0.5 | 28.2 | 13.9 |
| FY22E | 10,548 | 95.2% | 3,587.0 | 2.72 | 355.0% | 2.2 | 1.0 | 20.1 | 50.6 |
| FY23E | 10,386 | -1.5% | 3,576.5 | 2.71 | -0.3% | 2.2 | 0.8 | 22.2 | 40.0 |
| FY24E | 9,576 | -7.8% | 3,143.4 | 2.38 | -12.1% | 2.6 | 0.7 | 19.5 | 29.6 |
Valuation
-
Current Price: HK$32.25
-
Target Price (TP): HK$48.00
-
TP Sensitivity Table:
- WACC: 4.6% - 8.6%
- LT Thermal Coal Price (A$/t): 80 - 160
- LT Metallurgical Coal Price (A$/t): 120 - 200
-
YAL is valued using net present value (NPV) based on future cash flows from its reserves.
-
Key assumptions include:
- Long-term thermal coal price of A$120/t and metallurgical coal price of A$160/t starting from 2025E.
- Unit cash cost inflation of 1% p.a.
- WACC of 6.6%, based on a risk-free rate of 3.8%, risk premium of 6%, beta of 0.5, and a debt-to-capital ratio of 10%.
- AUD/HKD rate of HK$5.3.
Shareholding Structure
- Yankuang Energy: 62.3%
- China Cinda AM: 13.7%
Key Risks
- Decline in coal prices
- Further increase in unit costs
- Unfavorable weather affecting production
Peer Comparison (Figure 2)
| Ticker | Company | Price (local currency) | Market Cap (US$ m) | P/E (x) FY1 | P/E (x) FY2 | P/B (x) FY1 | P/B (x) FY2 | EV/EBITDA (x) FY1 | EV/EBITDA (x) FY2 | Dividend Yield (%) |
|---|---|---|---|---|---|---|---|---|---|---|
| YAL AU Equity | YANCOAL AUSTRALIA | 6.20 | 5,696 | 2.2 | 2.2 | 1.0 | 0.8 | 0.9 | 1.0 | 20.1 |
| WHC AU Equity | WHITEHAVEN COAL | 7.49 | 4,634 | 2.1 | 2.6 | 1.1 | 0.9 | 0.9 | 1.2 | 9.7 |
| NHC AU Equity | NEW HOPE CORPORATION | 5.77 | 3,542 | 3.4 | 3.4 | 1.8 | 1.5 | 2.0 | 2.1 | 19.4 |
| BTU US Equity | PEABODY ENERGY | 28.03 | 4,043 | 4.4 | 8.0 | n/a | n/a | 2.0 | 3.1 | n/a |
| GLEN LN Equity | GLENCORE PLC | 523.00 | 80,285 | 6.9 | 7.7 | 1.6 | 1.6 | 4.3 | 4.6 | 9.0 |
| BHP AU Equity | BHP BILLLITON | 48.32 | 170,294 | 11.0 | 11.2 | 3.6 | 3.3 | 5.8 | 5.7 | 6.3 |
| AAL LN Equity | ANGLO AMERICAN | 3,042.50 | 45,272 | 8.5 | 9.1 | 1.4 | 1.3 | 4.1 | 4.5 | 4.8 |
| BANPU TB Equity | BANPU PUBLIC | 10.90 | 2,727 | 3.3 | 5.5 | 0.7 | 0.7 | 3.5 | 4.8 | 8.1 |
| ADRO IJ Equity | ADARO ENERGY TBK | 3,020.00 | 6,372 | 4.2 | 6.0 | 0.9 | 0.9 | 1.5 | 2.0 | 15.2 |
| Average | - | - | - | 5.1 | 6.2 | 1.5 | 1.4 | 2.8 | 3.2 | 11.6 |
Operating Assumptions (Figure 3)
Marketable Coal Production (mn tonnes)
| Year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E |
|---|---|---|---|---|---|---|---|---|
| HVO | 14.8 | 13.3 | 13.7 | 12.0 | 10.6 | 9.6 | 12.0 | 13.0 |
| MTW | 11.8 | 12.1 | 12.1 | 11.9 | 11.2 | 8.1 | 8.0 | 9.0 |
| Moolarben | 12.4 | 16.5 | 17.8 | 19.7 | 18.4 | 14.9 | 18.0 | 18.5 |
| Stratford Duralie | 0.7 | 0.5 | 0.8 | 0.5 | 0.8 | 0.7 | 0.6 | 0.0 |
| Yarrabee | 2.9 | 2.6 | 2.8 | 3.0 | 2.6 | 2.1 | 2.0 | 2.0 |
| Middlemount | 3.9 | 3.8 | 2.7 | 2.9 | 3.7 | 2.6 | 2.7 | 2.7 |
| Ashton | 1.2 | 1.1 | 2.2 | 1.8 | 1.2 | 0.9 | 1.0 | 1.0 |
| Total | 47.7 | 49.9 | 52.1 | 51.8 | 48.5 | 38.9 | 44.3 | 46.2 |
Attributable Sales Volume (mn tonnes)
| Year | Thermal | Metallurgical | Total |
|---|---|---|---|
| 2017 | 15.5 | 3.8 | 19.3 |
| 2018 | 28.4 | 5.1 | 33.5 |
| 2019 | 30.1 | 5.5 | 35.6 |
| 2020 | 33.2 | 4.2 | 37.4 |
| 2021 | 31.7 | 5.8 | 37.5 |
| 2022 | 24.6 | 4.7 | 29.3 |
| 2023E | 27.8 | 5.7 | 33.5 |
| 2024E | 28.8 | 5.9 | 34.7 |
ASP (A$/tonne)
| Year | Thermal | Metallurgical | Blended |
|---|---|---|---|
| 2017 | 102 | 163 | 114 |
| 2018 | 123 | 183 | 132 |
| 2019 | 100 | 167 | 110 |
| 2020 | 76 | 123 | 82 |
| 2021 | 134 | 180 | 141 |
| 2022 | 372 | 406 | 377 |
| 2023E | 300 | 300 | 300 |
| 2024E | 260 | 290 | 265 |
ASP Growth (YoY)
| Year | Thermal | Metallurgical | Blended |
|---|---|---|---|
| 2017 | 45.8% | 53.6% | 42.9% |
| 2018 | 20.0% | 12.2% | 15.4% |
| 2019 | -18.3% | -8.8% | -16.2% |
| 2020 | -23.8% | -26.3% | -26.1% |
| 2021 | 75.4% | 46.5% | 72.9% |
| 2022 | 177.4% | 125.5% | 167.3% |
| 2023E | -19.2% | -26.1% | -20.4% |
| 2024E | -13.3% | -3.3% | -11.6% |
Cash Operating Cost (A$/tonne)
| Year | Unit Cash Operating Cost | Change (YoY) | Unit Cash Operating Cost (excluding government royalties) | Change (YoY) |
|---|---|---|---|---|
| 2017 | -71 | 3.5% | -62 | -1.1% |
| 2018 | -73 | 2.6% | -63 | 0.7% |
| 2019 | -73 | -0.9% | -64 | 1.6% |
| 2020 | -67 | -8.2% | -60 | -5.4% |
| 2021 | -77 | 16.2% | -66 | 9.5% |
| 2022 | -131 | 69.6% | -98 | 48.5% |
| 2023E | -125 | -4.6% | -97 | -1.5% |
| 2024E | -115 | -8.3% | -90 | -7.4% |
Analyst Ratings
- BUY: Stock with potential return of over 15% over the next 12 months.
- HOLD: Stock with potential return of +15% to -10% over the next 12 months.
- SELL: Stock with potential loss of over 10% over the next 12 months.
- NOT RATED: Stock not rated by CMBIGM.
- OUTPERFORM: Industry expected to outperform the relevant broad market benchmark.
- MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark.
- UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark.
CMB International Global Markets Limited
- Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong.
- Tel: (852) 3900 0888
- Fax: (852) 3900 0800
- CMBIGM is a wholly owned subsidiary of CMB International Capital Corporation Limited, which is a subsidiary of China Merchants Bank.
Important Disclosures
- There are risks involved in transacting in any securities.
- The information in this report is not tailored to individual investors.
- Past performance does not guarantee future results.
- CMBIGM is not liable for any losses incurred from relying on the report.
- The report is for the use of intended recipients only and may not be reproduced or distributed without consent.
- In the UK, the report is provided only to certain persons as defined in the Financial Promotion Order.
- In the US, the report is distributed solely to major US institutional investors.
- In Singapore, the report is distributed by CMBI (Singapore) Pte. Limited.
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