COSCO Shipping Holdings released his first-quarter 2022 results. 2022Q1 achieved revenue of 105.53 billion yuan, + 62.8% year-on-year, and net profit of 27.62 billion yuan, an increase of 78.7% over the same period last year. The net profit of deducting non-return was 27.48 billion yuan, an increase of 78.4% over the same period last year.
The prosperity of the collection and transportation market continued to rise, and the performance of Q1 achieved substantial growth. The global epidemic continues to spread, the phenomenon that supply falls short of demand in the collection and transportation market has not been alleviated, and shipping delays, port congestion and other factors aggravate the immediate freight rate rise. The company gives full play to the advantages of industrial chain management to ensure the steady growth of goods volume. 1) cargo volume: the shortage of capacity and port congestion have a certain impact on the overall cargo volume. 2022Q1 cargo volume is-9.2% year-on-year, of which trans-Pacific, Asia-Europe, Asia and other international routes are-7.7%,-4.2%,-10.9% and-3.9%, respectively. Domestic trade route traffic decreased by 15.6% year on year. 2) in terms of freight rates, the quotation for the spot market in Q1 in the past 22 years has declined, but the freight rate remains relatively high. The average 22Q1 CCFI index reached 2616, an increase of 76 per cent over the same period last year and Q43.5 per cent month-on-month. In 2022Q1, the company's revenue per container route increased by 80% compared with the same period last year, of which the revenue per container of trans-Pacific, Asia-Europe, intra-Asian and other international routes increased by 109%, 72%, 67% and 62% respectively, and the freight rate of domestic trade routes increased by 21%.
3) overall, the company's profitability continued to improve. The EBIT of Q1 container shipping business in 22 years was 39.5 billion yuan, surpassing Maersk and Dafei, and EBIT margin increased to 38%, an increase of 8pcts over the same period last year.
Looking forward to 2022, the economic recovery will support the collection and transportation demand, and the industry supply will continue to be tight in the medium term. On the demand side, retailers continue to replenish inventory in the medium term, and global container demand will be strongly supported with the global economic recovery, which is expected to grow by 5.9% in 2022. On the supply side, port congestion aggravates the shortage of capacity, the alignment rate of major liner companies is still low, and supply chain tensions are expected to continue until at least mid-2022. As of March 22, idle capacity accounted for 0.8%. As of April 1, the proportion of order-on-hand capacity in the industry increased to 26%. However, due to the time lag of ship supply, the release of large-scale supply may be delayed until after 2023.
Investment advice: the impact of the epidemic in Shanghai on the port can be controlled. With the relief of the epidemic in Shanghai, we judge that the volume of container shipments will remain stable. In the medium term, the demand for all kinds of materials in the global end market is still strong, the tension in the supply chain can not be effectively alleviated, and high freight rates may last for a long time. It is expected that after a long period of shortage of transport capacity, end customers pay more attention to the stability of the supply chain, 22-23 senior contract lease and freight rates have been significantly increased, and the company's profit center and profit stability are expected to rise greatly in the next two years. We maintain the pre-profit forecast and expect the company to achieve a net profit of 1003, 594, 39.8 billion yuan in 22-24, maintaining the "highly recommended-A" rating.
Risk tips: macroeconomic downturn, major maritime accidents, sharp rise in oil prices, performance measurement risk