Incident: The company announced its 2022 results announcement. It achieved annual revenue of HK$3.208 billion, an increase of 29.89% over the previous year; the net profit returned to the mother was HK$1,685 million, an increase of 24.66% over the previous year. The main reason for the increase in revenue and profit was the increase in the number of ships operating, the sharp increase in investment income from the joint venture tanker fleet based on market rent levels, and the excellent performance of the self-operated dry bulk fleet.
The size and structure of the fleet are reasonably controlled to steadily support subsequent development: the company signed 20 new ships in '22, with a total contract amount of US$1.51 billion, maintaining a record high level to provide stable support for subsequent development; 19 new vessels (including joint ventures and joint ventures), with a total contract amount of US$669 million; sale and return of 20 ships by shipowners; by 2021231, the company's fleet size (including joint ventures and joint ventures) was 158, the same as in the same period in 2021, with 129 and 29 ships leased and operated The average age of ships under construction and in operation is about 3.2 years. According to the contract amount, offshore clean energy equipment, container ships, liquid carriers, bulk carriers, and special ships accounted for 40.5%, 19.8%, 15.4%, 13.8%, and 10.5% respectively. Clean energy equipment represented by LNG ships accounted for a prominent share, and the proportion of other ship types was balanced.
Shipping attribute assets benefited from industry opportunities to achieve flexible returns: in '22, the company's 26 wholly owned and joint venture fleets achieved net profit attributable to the company of HK$632 million, an increase of 117.3% over the previous year, accounting for 36.42% of the company's net profit. Among them, eight 55,000-ton oil product/chemical tankers and six 75,000-ton oil tankers (the company's equity is 50%) contributed a total investment income of HK$312 million; eight self-operated bulk carriers (including six 64,000-ton ships and two 820,000 tonne ships) achieved net profit of HK$283 million, an increase of 16.5% over the previous year.
Respond positively to the Federal Reserve's interest rate hike and take more measures to effectively control financing costs: In the situation where the US dollar raised interest rates sharply in 2022, the company adopted various methods to keep comprehensive financing costs at 2.6% for the whole year, an increase of only 76 basis points over 2021. The balance to debt ratio was controlled at 71.3%, a sharp drop of 4PCT from the same period in '21.
Taking full advantage of the capital advantages of both domestic and overseas markets, it successfully issued 1 billion yuan of sustainability-linked panda bonds in mainland China, with a coupon interest of 3.3%, which helps to continuously and effectively control financing costs.
Profit Forecast, Valuation and Rating: The company's net profit to the mother in 2022 was in line with our forecast of HK$1,650 million (slightly over 2%). Maintain the company's profit forecast for 2023-2024 of HK$1,90/HK$2,150 million, and forecast a profit of HK$2.40 billion in 2025. The EPS for 2023-2025 is HK$0.31/0.35/0.39 respectively. The corresponding PB of the current stock price is 0.62/0.55/0.50X, respectively. Through a reasonable grasp of the downstream shipping market and the rational allocation of ship assets and leasing contracts, the company's performance is expected to maintain good growth. At present, the company's valuation is still at a low level, maintaining the company's “buy” rating.
Risk warning: risk of reduced quality of loans receivable; risk of interest rate fluctuations; risk of customer payment default; risk of foreign exchange rate fluctuation; risk of high cyclicality in the maritime industry; risk of competition in the global leasing industry.