The profit of the main business is stable, and the asset disposal increases the profit.
In the first three quarters, the operating income of Tangshan Port fell 26.5% compared with the same period last year, and the net profit of returning home increased by 29.2% compared with the same period last year, mainly due to the disposal of trading companies and container terminals in the third quarter, resulting in a decrease in operating income and an increase in investment income. The profits of the port-related main industries remained stable, with non-net profits up 2% in the first three quarters compared with the same period last year.
In the third quarter, non-net profit deducted 396 million yuan, down 8.9% from the same period last year, mainly due to an increase of 74 million yuan in asset impairment losses.
Production restrictions lead to a decline in cargo throughput
The bulk cargo throughput of 2021Q1-Q3 grew by 6.8%,-8.3% and-9.6% respectively compared with the same period last year, of which iron ore throughput increased by 4.7%,-22.8% and-27.3% respectively compared with the same period last year. The decline in growth rate is mainly due to the reduction of ore demand of hinterland iron and steel enterprises as a result of production restrictions. In the first three quarters, steel transport volume increased by 12.78% year-on-year, due to a substantial increase in steel exports; coal transport volume increased by 4.04% year-on-year, due to increased demand for thermal coal; and sand, slag powder and other cargo volume increased by 17.22% year-on-year. We expect that environmental production restrictions and energy consumption restrictions in winter will continue to affect port throughput.
The income per ton of goods has rebounded.
We estimate that per ton income such as bulk cargo handling and storage in the first half of 2021 increased by 8% over 2020, and by 1% in the third quarter over the first half of the year, showing an upward trend. This is related to the slowing down of competition in the surrounding ports, as well as the port congestion caused by epidemic prevention. Considering that the dry bulk ports in the north are still congested, port rates are expected to continue to rise slightly in 2022.
Rare third-quarter dividend with a dividend yield of nearly 6%
Tangshan Port plans to pay a dividend of 890 million yuan in the third quarter, with a dividend ratio of 51% and a dividend yield of nearly 6%. The dividend exceeds the income from asset disposal, indicating that it is not a special dividend. The profitability of major shareholders is poor, after the acquisition of the loss-making container terminal of Tangshan Port, we speculate that Tangshan Port needs to increase its dividend. Taking into account the low demand for capital expenditure in the future, the dividend ratio of Tangshan Port in 2021 is expected to increase from 64% in 2020, and the annual dividend yield is expected to exceed 8%, which is of high investment value.
Profit forecast and rating
Considering the changes of asset disposal, cargo throughput and port rates, the forecast net profit of homing in 2021-23 is raised from 18.6,19.3 and 2.02 billion yuan to 21.5,20.9 and 2.06 billion yuan, maintaining the buying rating.
Risk hints: environmental production restrictions become stricter, energy consumption double restrictions become stricter, real estate and infrastructure investment decline, port fee reduction policy is introduced, and the dividend ratio is reduced.
