Main points of investment

For the whole year of 2022, Rizhao Port achieved revenue of 7.497 billion yuan, + 15.26% year-on-year, and net profit of 631 million yuan,-14.40% year-on-year. In terms of operating data, the company achieved cargo throughput of 307 million tons, + 4.47% year-on-year; of which, metal ore throughput of 173 million tons, year-on-year + 0.59%, coal and products throughput of 60 million tons, + 14.26%.

Finance: periodic upward costs lead to pressure on profits

Revenue: 7.497 billion yuan in 2022, an increase of 15.26% over the same period last year.

Net profit of homing: 631 million yuan (- 14.40%) in 2022, mainly due to the increase in labor costs, land rental fees, maintenance fees and other expenses.

Throughput: hinterland resource support resilience

Cargo throughput: 307 million tons in 2022, an increase of 4.47% over the same period last year.

Metal ore throughput: 173 million tons, an increase of 0.59% over the same period last year.

Throughput of coal and products: 60 million tons, an increase of 14.26% over the same period last year continued to benefit from the promotion of "transit iron": Rizhao Port is the only port in the country with more than two thousand-kilometer railway lines (Xinheyi Ri Line and Wari Line). At the same time, it is directly connected to many highways and national highways such as "Nilan", "Shenhai" and "Weiri", and its throughput continues to benefit from the promotion of the national "transit railway" policy.

Rate: beneficiary port integration, rational return to continuous

Throughput income of port service units: 22.86 yuan per ton in 2022, an increase of 9.94 percent over the same period last year.

The return of loading and unloading rates to rationality will drive profit elasticity: at the present stage, Shandong Port Group has basically completed the integration of Shandong ports to avoid inter-industry competition caused by port hinterland overlap in the province, and the trend of company loading and unloading fees returning to rationality continues. With the background of overlay rate marketization, profits will have upward flexibility with the improvement of cargo throughput.

Profit forecast and valuation

Taking into account the development of the company's business lines, we estimate that the company's return net profit from 2023 to 2025 will be 726 million yuan, 826 million yuan and 913 million yuan respectively, and the corresponding share price will be 12.0,10.6 and 9.6 times respectively.

Risk hint

The port integration is uncertain; the loading and unloading demand of iron ore and coal is lower than expected; the loading and unloading rate is less than expected.