Guohai Securities initiates coverage on KINETIC DEV with a "Buy" rating

Guohai Securities research report points out that KINETIC DEV (01277.HK) is a private enterprise integrated with coal production, transportation, and sales, possessing the "four high" advantages of high profitability, high dividends, high capacity growth, and high equity incentives. It is expected that the company's operating revenue from 2025 to 2027 will be RMB 5.406 billion, RMB 6.118 billion, and RMB 6.816 billion, respectively, with net profit attributable to the parent company of RMB 1.288 billion, RMB 1.88 billion, and RMB 2.143 billion, reflecting a year-on-year decrease of 38.95%, an increase of 45.94%, and an increase of 14.03%, respectively. Earnings per share are expected to be RMB 0.15, RMB 0.22, and RMB 0.25, corresponding to current price-to-earnings ratios of 7.83 times, 5.36 times, and 4.7 times, respectively.

Guohai Securities believes that the company's main Dafenpu coal mine has strong profitability, with a high and stable dividend payout ratio in recent years. High equity incentives help reduce agency costs. With the future production of Yong'an Coal Mine and Wei Yi Coal Mine, and the orderly advancement of the acquisition of South Africa's MCMining, there is still room for performance growth. Additionally, the current valuation is relatively low. Overall, the company has investment value, initiating coverage with a "buy" rating