The company announced its 2022 annual report: 1) Performance: 2022 revenue of 37.28 billion yuan, +8.7% year on year; net profit of 17.22 billion yuan, +17.3% year on year; net profit of non-return mother was 16.88 billion yuan, +23.7% year on year. 22Q4 revenue was 8.04 billion yuan, -0.1% year on year; net profit of returned mother was 1.68 billion yuan, -43.0% year on year; net profit of non-return mother was 1.78 billion yuan, -28.0% year on year. 2) Costs and expenses: Operating costs of 22-year operating costs of 23.19 billion, +14.0% year on year; three-fee ratio 10.5%, year-on-year - 4.8 pts. Q4 Operating costs were 6.32 billion yuan, +10.4% year on year; the three-fee ratio was 11.6%, +1.2 pts year on year, +1.4 pts month on month. 3) Investment income: 12.04 billion in '22, +19.3% year on year; Q4 investment income was 2.46 billion, +3.4% year on year and -19.1% month on month. The month-on-month decline was mainly due to the decline in profits of joint ventures due to the decline in transportation sentiment. 4) Profit margin: 22-year gross profit margin 37.8%, -2.9 pts year on year; net interest rate after deducting non-return to the mother is 45.3%, +5.5 pts year on year. Q4 gross profit margin was 21.4%, year-on-year - 7.4 pts, month-on-month - 17.6 pts; net interest rate after deducting non-return to the mother was 22.2%, year-on-year - 8.6 pts, and -28.1 pts month-on-month. 5) Revenue and profit composition: Containers, bulk goods, port logistics, and port services accounted for 42.3%, 4.1%, 33.9%, and 6.9%; gross profit accounted for 46.7%, 1.1%, 24.9%, and 5.8%. Revenue in the second half of the year accounted for 47.3%, 4.7%, 37.4%, and 8.8%, and gross profit accounted for 54.9%, 1.6%, 27.1%, and 7.7%. 6) Dividend: It is proposed to distribute a cash dividend of 1.40 yuan (tax included) for every 10 shares, corresponding to a dividend ratio of 18.93%.

The container business rate of 2H22 is +4.5% compared to the same period last year, and the cost per container has increased significantly. 1) Container sector, revenue of 15.75 billion yuan in '22, +5.7% year on year; gross profit margin of 41.8%, -6.0 pts year on year; net profit of the container segment was 5.77 billion, -10.5% year on year. Revenue for the second half of the year was 8.13 billion yuan, +7.4% year on year; gross profit margin was 35.7%, -7.1 pts year on year; segment net profit was 2.66 billion yuan, +2.0% year on year. In terms of volume, container throughput in '22 was 47.303 million TEU, +0.6% year on year; Q4 throughput was 124.13 million TEU, +1.4% year on year. In terms of prices, the revenue of the single-container container business in '22 was 333.0 yuan/TEU, +5.1% year on year; among them, the revenue per container in the first half and the second half of the year was 338.0 and 328.5 yuan/TEU, +5.8% and +4.5% year-on-year, and the price increase logic continued to be implemented. In terms of unit cost, the cost per box in '22 was 193.8 yuan/TEU, +17.1% year on year; of these, 174.7 and 211.2 yuan/TEU in the first half and the second half of the year were +16.0% and +17.5% year-on-year. 2) Port logistics, 2H22 revenue in '22 was 126.2, 6.43 billion yuan, +21.7%, +8.9%; gross profit margin was 27.8%, 22.3%, -1.3 pts, -4.9 pts over the previous year; net profit of the port logistics division was 29.1, 1.23 billion yuan, +19.1%, +2.4% year on year. 3) Port services, 2H22 revenue in '22 was 25.9, 1.51 billion yuan, -2.5%, -3.3% year on year; gross profit margin was 31.4%, 27.1%, -5.4 pts, -4.3 pts over the previous year; net profit of the port services segment was 58,301 million, -19.3% and -34.0% year-on-year.

4) Bulk groceries, 2H22 revenue in '22 was 15,180 million, +11.2%, +10.8% year on year; gross profit margin was 9.9%, 10.3%, year-on-year: -2.8 pts, +1.6 pts; net profit of the bulk goods division was -1.1 and -0.1 billion.

Looking ahead to the future market: The improvement in external demand in 2023 may help maintain a steady increase in container throughput. New businesses such as sea-rail intermodal transport, river-sea intermodal transport, and automobile roaming are expected to further benefit volume growth; the increase in handling fees is expected to continue. At the same time, the company's integrated port and shipping logistics services have broad scope for expansion.

Investment suggestions: 1) Profit forecast: Considering the impact of the decline in the transportation boom on investment income, we lowered the 2023-2024 net profit forecast to 135.0 million and 14.74 billion yuan (original forecast of 144.4 billion yuan, 15.12 billion yuan), adding the 2025 forecast of 15.81 billion yuan. The corresponding three-year EPS was 0.58, 0.63, 0.68 yuan, corresponding to the current PE 9, 9, 8 times. 2) Investment advice: Referring to the company's PB center for the past three years, a PB valuation of 1.3 times 2024 was given, corresponding to the one-year target price of 7.44 yuan. There is room for a 36% increase from the current stock price, maintaining the “recommended” rating.

Risk warning: The impact of declining overseas demand on the port industry's throughput has exceeded expectations, actual handling fee increases have fallen short of expectations, costs have risen sharply, etc.