With the injection of high-quality port assets, the total profits of 23 and 24 years have improved by 70% and 147% respectively.
If the asset restructuring is successfully completed in the first half of 2023, the company will acquire a 35% stake in Yantian Port China and Hong Kong, which is expected to bring the company about 370 million yuan and 780 million yuan in pre-tax profits in 2023H2 and 2024, equivalent to 69.7% and 146.9% of the total profits in 2021.
The capacity utilization rate of the port business continues to improve, and the independent port has entered the profit release period of Huizhou Tsuen Wan Coal Port. The utilization rate of 2022H1 capacity has climbed from 45.9% in 2021 to 54.3% (compared with 8.4pp), with an income of 110 million yuan (+ 48.2% compared with the same period last year). The net profit has been reduced from a loss of 42.29 million yuan in 2021 to a loss of 3.15 million yuan. It is expected that the whole year of 2022 will be able to turn a loss into a profit.
In Huangshi Newport, 2022H1 capacity utilization increased from 38% in 2021 to 47% (month-on-month + 9pp), revenue was about 110 million yuan (year-on-year + 20%), net profit increased 91% to 22.18 million yuan over the same period last year, and it is estimated that net profit for the whole year 2022 is expected to exceed 50 million yuan.
We judge that the profits of Huizhou Tsuen Wan Port and Huangshi Xingang Port are expected to increase significantly from 2023.
High-speed business volume and prices will rise soon, which will further improve the company's performance. The Shenzhen section of Huiyan Expressway is about 20KM, and the epidemic leads to-17.9% year-on-year 2022H1 traffic and-15.4% year-on-year revenue. There are three opportunities to improve the judgment volume or price: the marginal improvement of epidemic prevention and control policy leads to the natural repair of traffic flow, and we should pay attention to the change of preferential policy on highway tolls; in the second half of 2023, 4 lanes become 8 lanes, about 33.3% of 8KM toll prices increase and traffic diversion of other sections leads to a simultaneous increase in volume and prices; and the increase in traffic volume brought about by the commissioning of Shenzhen-Middle Corridor in 2024.
Investment advice: high certainty of performance improvement, the current valuation does not reflect multiple positive, it is recommended to buy and estimate the 2024 port business and high-speed business return net profit of 1.15 billion yuan and 150 million yuan respectively, using the segment valuation method to give the port business 15xPE valuation, high-speed business 13.8xPE valuation, the corresponding reasonable market value of 17.25 billion yuan and 1.79 billion yuan, a total of about 19 billion yuan, the corresponding stock price of about 8.45 yuan. Cover for the first time, giving a "buy" rating.
Risk hint
Demand recovery is less than expected; geo-conflict intensifies; high-speed charging policy continues; asset restructuring is less than expected; financial costs grow faster than expected; oil prices rise, etc.
