YANCOAL AUSTRALIA(3668.HK)：1H24 NET PROFIT-57% YOY BELOW EXPECTATIONS;NO INTERIM DIVIDEND SUGGESTS POTENTIAL M&A-格隆汇

机构：招银国际
研究员：Wayne FUNG

　　Yancoal’s (YAL) net profit came in at A$420mn in 1H24 (-57% YoY) which is slightly below our expectation due to higher-than-expected unit cost. Unlike that in 2022 and 2023, YAL did not propose interim dividend this time despite a strong net cash position (A$1.42bn as at end-Jun). Therefore, we do not rule out the possibility that YAL is getting closer to a potential M&A deal to boost product diversification and long-term growth. YAL maintains the full-year range of guidance on sales volume, unit cost and capex. We trim our 2024E-26E earnings forecast by 6-7%, after revising up our unit cost assumptions by 3.5- 4.0%. Our NPV-based TP is revised down to HK$42 from HK$45. The stock remains attractive at 6.6x 2024E P/E and >7% yield. Maintain BUY.
　　Key highlights on 1H24 results. Revenue dropped 21% YoY to A$3.1bn, as the 17% YoY coal sales volume growth (to 16.9mt) was more than offset by the 37% YoY decline in blended coal ASP (to A$176/t). EBIT declined 58% to A$587mn due to operating de-leveraging. Net profit dropped 57% YoY to A$420mn. Operating cash inflow was A$851mn, higher than the net profit. As at end-Jun 2024, YAL had net cash of A$1.42bn.
　　Unit cost reduction still underway. The unit cash operating cost (excluding royalties) in 1H24 was A$101/t, -7% YoY but +17% HoH. Despite our higher unit cost assumptions, we still expect YAL to achieve ~7% YoY unit cash cost reduction in 2H24E.
　　2024E full-year guidance unchanged: (1) attributable saleable production: 35-39mn tonnes (up 5%-17% YoY); (2) operating cash cost (excluding royalties): A$89-97/t (-7% to +1% YoY); (3) capex: A$650-800mn (up 5%-29% YoY).
　　Key risks: (1) further decline in coal price; (2) rebound of unit cost; (3) extreme weather that affects production.