Since the beginning of this year, benefiting from factors such as the boom in coal production and sales, the successful turnaround of the power business, and the proper control of the company's expenses and costs, Yongtai Energy announced on January 1, 2024 that it is expected to make a net profit of 2.280 billion yuan to 2.380 billion yuan in 2023, a year-on-year increase of 36.97%-42.97%.
While the performance continues to improve, Yongtai Energy's energy storage transformation is also progressing rapidly. It is expected that in the second half of 2024, the 6,000 tons/year high-purity vanadium pentoxide project and the first phase of the 300MW all-vanadium flow battery energy storage project will be put into operation one after another, forming a new development pattern of "traditional energy + new energy storage" two-wheel drive development.
The main business of coal power continues to improve, and new projects are accelerating
According to the announcement, in the fourth quarter of 2023, Yongtai Energy will achieve a net profit attributable to the parent company of 606 million ~ 706 million yuan, a year-on-year increase of 64.7% ~ 91.9% and a month-on-month increase of -0.8% ~ 15.5%.
As a comprehensive energy listed company, Yongtai Energy has always pursued "resource first" and has strong resource advantages. It is understood that Yongtai Energy has a total of 3.857 billion tons of coal resources, including 933 million tons of high-quality coking coal resources, 2.924 billion tons of high-quality thermal coal resources, and the total production capacity of its 15 coal mines is 11.1 million tons/year.
After years of development, Yongtai Energy has built a new development pattern of "coal + electricity + energy storage". The profitability of the power plant business improved significantly in 2023. According to the research report of Capital Securities, in the first three quarters, the company generated 28.30 billion kWh (+0.57%) of electricity and sold 26.810 billion kWh (+0.45%). In the first three quarters of 2023, the company's coal-fired units completed 865 million kWh of deep peak regulation, received about 164 million yuan of peak regulation compensation income, and about 12 million yuan of power grid auxiliary frequency modulation service income;
Gas-fired units actively participated in power grid ancillary services and received compensation income of about 16 million yuan. The company's power sector was affected by the downward price of thermal coal in the first three quarters, and the cost was reduced, and it is expected to turn losses into profits throughout the year.
At the same time, the continuous promotion of the new project has laid the foundation for the sustainable development of Yongtai Energy, and its Shaanxi Yihua Haizetan Coal Mine Project is accelerating. As of December 31, 2023, a total of 2,168 meters of wells have been excavated from the four wells of the project, and the overall progress of the project is one month ahead of schedule. Yongtai Energy expects that on January 20, 2024, the central return air shaft will expose the main coal seam and excavate to the end, achieve vertical leveling in May, enter the second phase of the project construction, have the coal production conditions in the third quarter of 2026, and reach production in 2027, and finally achieve the well construction goal of "three and a half years of coal production, four years of completion and production".
The strength of the Haizetan Coal Mine Project should not be underestimated, the project is located in the Yuheng mining area of Shaanxi Province, the coal types are mainly high-quality chemical coal and thermal coal, with resource reserves of 1.145 billion tons and an average calorific value of more than 6,500 kcal. Haizetan Coal Mine Project has many advantages such as large resource reserves, excellent coal quality, good mining conditions, high expected benefits, and long mining life, and is a new super-large coal mine project approved by the National Development and Reform Commission in accordance with advanced production capacity, a key project in Shaanxi Province in the 14th Five-Year Plan, and is included in the national major construction project database and a key project in Shaanxi Province in 2022.
Yongtai Energy said that after the Haizetan Coal Mine Project fully releases its production capacity, it can reach an annual production capacity of 10 million tons/year of high-quality chemical coal and thermal coal, and can achieve an annual operating income of about 8.6 billion yuan and a net profit of about 4.2 billion yuan according to the preliminary calculation of the average market coal price in the past three years, and an annual operating income of about 9 billion yuan and a net profit of about 4.4 billion yuan according to the preliminary calculation of the average market coal price in 2023. After the Haizetan Coal Mine Project is put into operation, the company's profitability will be greatly enhanced, the company will fully realize the goal of coal-power integration, and its operating performance and core competitiveness will be significantly enhanced.
In the view of the industry, since the beginning of the winter, the daily consumption of downstream power plants is gradually rising, and the demand for coal is gradually improving, laying a solid foundation for the market rebound in the second half of winter.
The transformation of energy storage has achieved remarkable results and is expected to create a second growth pole
From supply-side reform to "carbon peak" and "carbon neutrality", since 2021, the energy transformation of coal enterprises has started with the continuous support of high profitability in the industry.
In 2023, the results of Yongtai Energy's energy storage transformation will gradually appear. In the upstream vanadium ore beneficiation and smelting project, the 6,000 tons/year high-purity vanadium pentoxide beneficiation and smelting production line (phase I 3,000 tons/year) of Dunhuang Huihong Mining Development Co., Ltd., a subsidiary of Yongtai Energy, has started construction at the end of June 2023 as scheduled, and the first phase of the project is expected to be put into operation in the second half of 2024, which will occupy about 20% of the current domestic market share of vanadium extraction from stone coal.
In terms of downstream vanadium battery production projects, the company's Zhangjiagang Detai Energy Storage Equipment Co., Ltd.'s 1000MW all-vanadium flow battery energy storage equipment manufacturing base (phase I 300MW) has started construction at the end of June 2023 as scheduled, and the first phase of the project is expected to be put into operation in the second half of 2024, and will occupy about 10% of the domestic market share after reaching production.
Yongtai Energy said that in accordance with the formulated goal of striving to form a scale of the energy storage industry in 2025, enter the first phalanx of the energy storage industry from 2027 to 2030, achieve a market share of more than 30% of the all-vanadium flow battery, and become a leading and leading benchmarking enterprise in the development of the whole industry chain of the energy storage industry.
It is worth mentioning that Yongtai Energy has obtained the mining rights of Longling vanadium mine through equity mergers and acquisitions, increasing the average grade of 0.93% and confirming 1.3474 million tons of vanadium pentoxide resources, which further increases the company's advantages in high-quality vanadium ore resources.
In addition, Yongtai Energy's Detai Energy Storage Research Institute has been officially inaugurated at the end of June 2023, and through the acquisition of 70% equity of Vnergy, a full-vanadium flow battery energy storage technology start-up company from the National University of Singapore, the company has the world's leading all-vanadium flow battery energy storage R&D strength and R&D advantages, making the company's all-vanadium flow battery products have obvious industry-leading advantages in terms of thermal stability, energy density and cost.
Relevant industry insiders said that Yongtai Energy's coking coal resources are scarce and have a strong price advantage, while the power plant business and the coal business form an effective synergy, and the new project will greatly increase the company's coal production capacity and improve long-term profitability, which will effectively solve the cyclical problems in the coal and power sectors in the operation process. With the support of profits, Yongtai Energy has actively transformed and developed into the field of energy storage, formed a new pattern of two-wheel drive development of "traditional energy + new energy storage", and built a whole energy storage industry chain of "vanadium ore resource integration, mining and smelting, electrolyte preparation, stack and key material production, and system integration of all-vanadium flow batteries", which means that the transformation of energy storage is expected to open the "second growth curve".
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
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