Events:
COSCO Shipping Holdings released the first quarterly report of 2022: in the first quarter of 2022, operating income reached 105.53 billion yuan, an increase of 62.75 percent over the same period last year, and the net profit returned to its mother was 27.617 billion yuan, an increase of 78.73 percent over the same period last year.
Main points of investment:
The off-season is not light, and the first-quarter results slightly exceeded expectations. 2022Q1's collection, transportation and terminal business both achieved high growth. ① Container: freight volume is 436.58 TEU, 9.15% lower than the same period last year. However, the bottleneck in the supply chain still exists, and the freight rates of trunk routes are basically stable. The company achieved 67.267 billion yuan in revenue from collection and transportation routes, an increase of 62.44 percent over the same period last year. ② terminal: the container throughput of Cosco's shipping port is 3029.16 TEU, an increase of 0.34% over the same period last year. Among them: 748.74 TEU of the holding terminal, up 39.55% from the same period last year; and 22.8042 million TEUs of the participating terminal, down 8.13% from the same period last year.
Slightly affected by the epidemic in the short term, it is still expected to maintain high prosperity for the whole year. After the outbreak of the epidemic in Shanghai, land-side traffic was affected, and the freight flow of complete vehicles in the Shanghai area decreased significantly after entering April.
The congestion of land-side logistics means a decline in shipments, that is, a decline in consignment demand. However, at present, the main contradiction affecting the container freight rate is still on the supply side, through the Los Angeles port empty, heavy container accumulation and the number of container queues, the problem of port congestion in the United States has not been substantially improved. The first quarter has always been the off-season of gathering and transportation, and the off-season still fails to solve the problem of blocking the port. Considering that it is about to enter the peak season, it is expected to maintain a high degree of prosperity throughout the year.
The next key point is whether the industry can overcome the cycle, towards the value of 2023-24 years is the ship concentrated production period, there is a hidden worry of surplus on the supply side at present. However, considering that IMO is about to implement carbon reduction rules, and the current proportion of old ships is relatively high, the actual release pressure of future transport capacity may be disassembled and hedged by old ships. Not only that, the industry has now passed a critical reshuffle period, the position of the head liner company is becoming more and more stable. Driven by pattern optimization, the demand for cooperation between liner companies is gradually stronger than the willingness to compete, and Maersk, the leader, has repeatedly made a statement that it will not disorderly put in capacity. If the industry can maintain orderly competition in the year after next year, it may usher in a new round of value revaluation.
Profit forecast and investment rating estimate that COSCO Shipping Holdings's operating income from 2022 to 2024 is 381.783 billion yuan, 290.499 billion yuan and 241.702 billion yuan respectively, and the net profit of returning mother is 121.798 billion yuan, 599.90 billion yuan and 338.39 billion yuan respectively, corresponding to 2.33,4.35 and 7.71 yuan respectively.
Risk tips: import demand from Europe and the United States has fallen sharply, the domestic epidemic has exceeded expectations, orders for new ships have risen higher than expected, long-term associations have signed less than expected, and fuel costs have risen higher than expected.