| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 19.89 | 187 |
| Intrinsic value (DCF) | 7.81 | 13 |
| Graham-Dodd Method | 1.40 | -80 |
| Graham Formula | n/a |
Anhui Hengyuan Coal-Electricity Group Co., Ltd. is a prominent Chinese coal mining and energy company headquartered in Suzhou, Anhui Province. As a subsidiary of Anhui Province Wanbei Coal-Electricity Group Company Limited, the company specializes in the mining, processing, washing, sale, and transportation of various coal products including lean coal, coking coal, anthracite coal, and blended coal. These products serve critical industries such as electric power generation, metallurgy, petrochemicals, building materials, and civil use. Operating in China's essential energy sector, Anhui Hengyuan plays a vital role in supporting the country's industrial infrastructure and energy security. The company's integrated operations from mining to transportation provide comprehensive coal solutions while maintaining strategic importance in regional energy supply chains. With China's continued reliance on coal for industrial and power generation needs, Anhui Hengyuan remains positioned as a key player in the domestic coal market.
Anhui Hengyuan presents a mixed investment profile with several notable strengths and risks. The company demonstrates solid profitability with net income of CNY 1.07 billion on revenue of CNY 6.97 billion, representing a healthy 15.4% net margin. Strong operating cash flow of CNY 1.38 billion and substantial cash reserves of CNY 5.41 billion provide financial stability, while a low beta of 0.44 suggests defensive characteristics relative to the broader market. However, the company operates in China's coal sector, which faces structural challenges from environmental regulations and the long-term transition toward renewable energy. The modest dividend yield and exposure to commodity price volatility present additional considerations. Investors should weigh the company's current financial strength against the secular decline of the coal industry and potential regulatory headwinds in China's energy transition.
Anhui Hengyuan operates in a highly competitive Chinese coal market dominated by state-owned enterprises and large regional players. The company's competitive positioning is primarily regional, focusing on Anhui Province and surrounding areas, which provides some geographic insulation but limits national scale compared to industry giants. Its competitive advantages include vertical integration from mining to transportation, diverse coal product portfolio catering to multiple industrial segments, and strong parent company backing through Anhui Province Wanbei Coal-Electricity Group. The company's relatively low debt levels and strong cash position provide financial flexibility that smaller competitors may lack. However, Anhui Hengyuan faces significant competition from national champions like China Shenhua and China Coal Energy, which benefit from massive scale, superior logistics networks, and stronger government relationships. The company's regional focus also makes it vulnerable to local economic conditions and environmental regulations specific to Anhui Province. While operational efficiency appears solid given current margins, the lack of diversification beyond coal exposes the company to sector-specific risks that more diversified energy competitors can mitigate.