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【出版时间及名称】：20100119 煤矿的价格定位及未来的增长空间
【作者】： Merrill Lynch
【文件格式】：PDF
【页数】：12
【目录或简介】：
2010 contract coal price settled, further increase likely

2010 contract price settled at rmb30/t increase Media reported that 2010 contract coal price (5500kcal seaborne coal) concluded with rmb30-40/t increase (or 5.6%-7.4% YoY). Coal companies have not
confirmed yet but our channel check suggested the contract price increase to be around rmb30/t. It is below market sentiment and our previous forecast, a 54rmb/t increase or 10% YoY.

Reasons for lower-than-expected contract price increase In our view, the lower-than-expected 2010 contract price increase is mainly caused by two factors: 1) Poor affordability at IPPs. The average coal price for IPPs operating profit breakeven is around rmb650-700/t. At the current high spot coal price of rmb800/t, there is little room for the contract price to move higher. 2) Potential government intervention. NDRC is said to have intervened in the price negotiation to force the coal companies to take rmb30/t price increase.

More spot sales and further increase from resource tax 1) With rmb30/t contract price increase, we expect coal companies to switch more coal sales from contract to spot, roughly 5-10% of total contract sales, on our estimates. A 1% switch from contract to spot sales would increase Shenhua's 10E EPS by 0.4%, China Coal by 0.4%, YZC by 0.1%; 2) the new contract price increase does not take into account resource tax. In our view, if resource tax is to be implemented by the end of 1Q10, coal companies likely will renegotiate the contract price to pass through the additional costs.

2011 contract price remains unchanged at rmb653/t We lower our 2010 benchmark contract coal price to rmb570/t from rmb594/t, and keep 2011E contract price unchanged at rmb653/t, +14.5% YoY (up from previous 10%YoY ), mainly due to strong forecast coal consumption growth of 8.6% in 2011E, along with worsened transportation bottleneck.

Ratings unchanged, Shenhua top pick With rmb30/t contract price increase and 5% less contract sales, Shenhua's 2010E EBITDA is Rmb 39bln (1.8% less than previous forecast). Shenhua remains our sector top pick given its strong EBITDA growth, best long-term outlook and 30% share price underperformance over China Coal in the past two months.

Spot price to correct in short term, neutral on YZC Spot price is around rmb800/t. In our view, the spot price has peaked and likely will correct in 1-3 months; mainly due to 1) a recovery of transportation capacity from snow storms; 2) increasing coal supply from over-production and small coal mines recovery. We remain neutral on YZC given its highest exposure to spot price and stretched valuation on a 12-month horizon