Performance
On April 28, COSCO Shipping Holdings released the first quarter report of 2021. Q1 achieved an operating income of 105.53 billion yuan, an increase of 62.75% over the same period last year, a net profit of 27.617 billion yuan, an increase of 78.73% over the same period last year, and a net profit of 27.481 billion yuan, an increase of 78.36% over the same period last year, in line with our expectations.
Analysis.
Freight rates remain high and Q1 performance is eye-catching. Q1 global epidemic continues to repeat, port congestion, container shortage, inland transport delay and other factors have not been eliminated, supply chain bottlenecks still exist, freight rates continue to remain high. Q1 China's export container freight composite index (CCFI) averaged 3444.33 points, an increase of 76 per cent year-on-year and 5 per cent month-on-month. The company has made every effort to ensure global transport services through measures such as stabilizing transport capacity, ensuring supply boxes and lifting services, and its operating efficiency has increased significantly compared with the same period last year. The revenue of container shipping business of Q1 company was 99.299 billion yuan, an increase of 63.56% over the same period last year, mainly due to an 85% increase in international per container revenue to US $2975. Although Q1 oil prices rose and the unit price of fuel consumption rose 56 per cent to $633 per tonne, Q1's gross profit margin rose 7.33pct to 40.54 per cent year-on-year.
The controlling shareholders have completed the increase of their holdings, demonstrating their confidence in the development of the company. COSCO Shipping Group, the controlling shareholder of the company, increased its A shares for the first time on October 18, 2021, and further increased its A shares by about 20.84 million shares and H shares by about 13.59 million shares from the end of 2021 to April 15, 2022, with a cumulative increase of about 1.892 billion yuan. Up to now, the controlling shareholders have implemented the plan to increase their holdings, which fully reflects their confidence in the company's future development prospects and the recognition of the company's investment value.
Work closely with the shipping industry chain to promote end-to-end and digital shipping construction. It is expected that the international economic and trade pattern will continue to adjust in 2022, and the uncertainty caused by the COVID-19 epidemic may still threaten the process of economic recovery. The company actively cooperates closely with the shipping industry chain, and promotes the end-to-end and digital construction of shipping, which is expected to better cope with the changes in trade pattern, digital transformation and green environmental protection. (1) double brands will join hands with other members of Ocean Alliance to smoothly launch DAY5 route products with wider coverage, better quality, faster delivery and more stable service; (2) to create an integrated land and sea operation model to provide customers with more reliable and guaranteed "end-to-end" services; and (3) to promote business digital transformation and provide customers with full-process, multi-channel and visual online shipping services and products.
Investment suggestion
Considering that the tension between supply and demand in the market will continue in the first half of 2022, we maintain the company's net profit forecast of 110.26 billion yuan, 72.066 billion yuan and 45.923 billion yuan from 2022 to 2024. Maintain a "buy" rating.
Risk hint
The risk of substantial expansion of aviation capacity; the risk of a sharp rise in oil prices; and the risk of a higher-than-expected decline in the global economy.