Daqin Railway (601006) Operational data review for April 2019: daily traffic volume shifted to 110

The daily traffic volume of the Daqin Line in April was 109.

5 Nominal, exceeding market expectations.

Considering the end of spring maintenance and the increase of long-term power consumption in summer, the daily shipment volume of the Daqin may return to about 125 in May.

The coal production capacity in Shanxi may be difficult to influence the impact of ore mining.

Benefiting from the transformation of coal production capacity and transportation layout, the freight rate of the Daqin Line may remain firm.

Assuming a 50% dividend rate in 2019, the expected yield is close to 6.

0%, investment attractiveness increased.

Affected by spring maintenance, the daily traffic in April was 109.

5 Nominal, exceeding market expectations.

In April 2019, the company’s core assets, the Daqin Line, completed a 3,284 freight transfer,南宁桑拿 surpassing growth by 1.

96%.

Daily average volume is 109.

5 Nominal, exceeding market expectations.

The Daqin Line will gradually complete the freight volume in 20191.

4 billion tons, a reduction of 2 each year.

5%, the April overhaul of the Daqin Line in April lasted for about 24 days, one day less than the original plan. Does the overhaul affect the daily traffic by 10?
20 mm.

The coal consumption may return to a high level in mid-to-late May, and the average daily traffic in May may be about 125.

As of April 30, the average daily coal consumption of the six major power generation groups was 63.

7 at least, 5 per year.

3%; The coal inventory of the 6 major power generation groups was initially 1540, a decrease of 2 from the previous month.

0%, but still maintained at a high level; Qingang coal inventory 645 index, unchanged from the previous month.

As of May 8th, before the six major power generation groups and Qingang coal inventory were adjusted to 1553, 649, some power plants are still under maintenance. It is expected that the average daily coal consumption of power plants will return to a high level in mid-to-late May.

Considering the end of maintenance and the continued increase in power consumption in summer, the daily shipment volume of the Daqin may return to about 125 in May.

The heavy coal production capacity in Shanxi is difficult to influence the impact of ore mining, and the freight rate of the Daqin Line may remain firm.

In the first quarter of 2019, the national railway freight volume increased by 3 every year.

0%, which is lower than the target of 9% of the CAGR proposed in the “2018-2020 Railway Freight Increment Action Plan”.

In April, the “Notice of China Railway Corporation on Optimizing Freight Tariff Strategies in Some Areas” adjusted the freight rates of the Wali Line, Shenyang Railway Bureau and Harbin Railway Bureau.The issuing authority of the above routes is determined independently.

In Q1 2019, the production of raw coal in Inner Mongolia, Shanxi and Shaanxi both increased by 5.

1%, 11.

6% and -13.

0%, a total increase of 1677 baseline, Shanxi ‘s coal production capacity or the impact of mining difficulties.

Benefiting from the transformation of coal production capacity and transportation layout, the freight rate of the Daqin Line may remain firm.

Compared with overseas, it is obviously underestimated that the fee reduction may affect the company’s revenue of about 200 million.

As the leader in railway coal transportation, under the current market value, the company’s 2019 profit forecast corresponds to less than 9 times the PE, which is significantly undervalued compared with overseas, and the value of core scarce assets is prominent.

Assuming a 50% dividend rate in 2019, the expected yield is close to 6.

0%, investment attractiveness increased.

Starting from April 1, the railway canceled dump truck operation services and reduced 10 miscellaneous fees such as deferred occupancy fees for trucks. It is expected that the cancellation or reduction of some miscellaneous fees will affect the company’s revenue by about 2 billion, accounting for 0 in 2019.
About 26%.
Risk factors: Less-than-expected demand for thermal coal, better-than-expected hydropower and imported coal, and lowered railway freight prices.

Earnings forecasts, estimates and investment ratings.

The daily traffic volume of the Daqin Line in April was 109.

5 Nominal, exceeding market expectations.

Considering that the average daily coal consumption of the six major power generation groups returns to a high level in mid-to-late May, it is estimated that the Daqin line traffic may be about 125.

We maintain the company’s 2019-2021 net profit forecast of 14.1 billion / 14.3 billion / 14.5 billion, and maintain the company’s 2019-2021 EPS forecast of 0.

95/0.

96/0.

97 yuan.

Compared with overseas, there are obvious underestimates, and the value of core scarce assets is prominent.
Assuming a 50% dividend rate in 2019, the expected yield is close to 6.

0%, investment attractiveness increased.

Maintain “Buy” rating.