Key points of investment
In 2022 as a whole, Qingdao Port achieved revenue of 19.263 billion yuan, +14.71% year on year, and achieved net profit of 4,525 billion yuan to the mother, +13.63% year on year. According to operating data, the company achieved cargo throughput of 627 million tons, +10.3% year on year; achieved container throughput of 26.82 million TEUs, +13.16% year on year. The performance was generally in line with expectations.
Containers: Volume and price have both risen, and the steady increase in performance continues
Container throughput +13.1% year on year: In 2022, the company achieved container throughput of 26.82 million TEUs, an increase of 13.1% over the previous year. Among them, Qingdao Port and Weihai Port completed 25.67 million TEUs and 1.15 million TEUs respectively.
On a quarterly basis, in the first quarter and second quarter of 2022, Qingdao Port achieved container throughput of 590 million and 6.57 million TEUs respectively, up 6.3% and 7.5% respectively over the previous year. The growth rate increased quarterly. We think it mainly benefited from the company's continuous increase in routes and supply supply in the first half of the year, and stabilized its “bridgehead” position in opening up to the outside world.
The impact of container rate adjustments continues: on February 9, 2022, QQCT announced that the handling fees for 40-foot and 20-foot heavy containers in foreign trade will increase by about 14% and 12% respectively, which is expected to continue to drive revenue generation and profitability of the company's container business.
Consolidated business+QQCT performance increased steadily: the company's container handling and ancillary services business segment, including QQCT, achieved a total net profit of 1,523 billion yuan, an increase of 40.60% over the previous year.
Liquid bulk cargo: New terminals release production capacity to support profit growth
Liquid bulk throughput +4.1% year over year: In 2022, the company achieved liquid bulk throughput of 112 million tons, an increase of 4.1% over the previous year.
The consolidated business benefited from the release of production capacity: thanks to the gradual release of production capacity from the crude oil terminal, liquid chemical terminal and crude oil commercial reserve built in the Dongjiakou port area, revenue increased 11.77% year-on-year to 3,519 billion yuan.
Qingdao Shihua's profit is under phased pressure: Affected by the cost side, the company's participation in Qingdao Shihua contributed 22% year-on-year to net profit.
Consolidated business+Qingdao Shihua's performance maintained positive growth: the company's liquid bulk handling and supporting services business, including Qingdao Shihua, achieved a total net profit of 1,886 billion yuan, an increase of 8.35% over the previous year.
Regional integration continues to advance. On the one hand, I am optimistic about the absolute profit value brought about by the company's steady growth. On the one hand, Qingdao Port Co., Ltd. completed a holding on the development of Weihai Port, which is expected to promote the joint development of Qingdao Port and Weihai Port; on the other hand, with the transfer of the company's actual control to the Shandong Port Group at the beginning of the year, port integration in Shandong Province continues to advance, and I am optimistic about the overall increase in Shandong port rates.
Furthermore, the company insists on “increasing routes, expanding cabin capacity, and expanding transit”. We are optimistic about the company's transit port development opportunities in Northeast Asia, which is expected to lead to an excessive increase in the company's throughput. There are conditions for continuous improvement in volume and price, and I am optimistic about the absolute profit opportunities brought about by the company's steady growth.
Profit forecasting and valuation
Taking into account the development of the company's various business lines, we estimate that the company's net profit for 2023-2025 will be 5.084 billion yuan, 5.739 billion yuan, and 6.452 billion yuan respectively. The corresponding current stock price PE will be 7.8 times, 6.9 times, and 6.2 times, respectively, maintaining the “buy” rating.
Risk warning
Port integration fell short of expectations; demand for container shipping fell short of expectations; returns from various investment projects fell short of expectations.