Daqin Railway(601006) 长江证券·2024-09-09 04:02Investment Rating - The report maintains a "Buy" rating for the company [7]. Core Views - In 2024, both supply and demand in the coal market are expected to weaken, with upstream production cuts in the "Three West" regions and declining coal prices at the northern ports, leading to a persistent price inversion between port and pit coal [6][7]. - The company reported a revenue of 36.607 billion yuan for the first half of 2024, a year-on-year decrease of 9.5%, and a net profit of 5.864 billion yuan, down 22.2% year-on-year [5][6]. - The company plans to distribute a mid-term cash dividend of 2.36 billion yuan, accounting for 40.24% of its net profit for the first half of 2024 [5]. Summary by Sections Financial Performance - In Q2 2024, the company achieved a revenue of 18.338 billion yuan, a decrease of 11.0% year-on-year, and a net profit of 2.817 billion yuan, down 27.4% year-on-year [5][6]. - The company's total revenue for the first half of 2024 was 36.607 billion yuan, with a net profit of 5.864 billion yuan [5][6]. - The company experienced a decline in freight volume, with Q2 2024 coal transport volume down 8.1% year-on-year to 9.5 million tons [6][10]. Market Conditions - The coal market is facing a dual weakening of supply and demand, with significant impacts from upstream production cuts and declining prices at key ports [6][7]. - The report highlights the potential for recovery in transport volume along the Daqin line as the price inversion between pit and port coal temporarily resolves [6][7]. Future Outlook - The company is expected to maintain high transport volumes due to the ongoing demand for coal, with projected net profits of 9.11 billion yuan, 11.3 billion yuan, and 11.71 billion yuan for 2024 to 2026, respectively [7][10]. - The report emphasizes the potential for upward momentum in profitability if market reforms lead to adjustments in freight pricing [7].