The company publishes its 2012 annual report. During the reporting period, operating income was 1.17 billion yuan, down 1.6% from the same period last year; net profit attributable to 131 million yuan, down 47.6% from the same period last year; and basic earnings per share was 0.084 yuan. Of this total, Q4 operating income was 270 million yuan, down 4.9% from the same period last year; attributable net profit was 10 million yuan, down 11.6% from the same period last year; and basic earnings per share was 0.002 yuan.
The company intends to pay out 0.26 yuan (including tax) for every 10 shares to all shareholders on the basis of 1.56 billion shares of total share capital.
Comments:
Affected by the impact of imported coal, the coal throughput of Jinzhou Port fell by 33%; the growth of other goods is slow.
Demand side: the overall domestic economic situation slipped in 2012, and the demand growth rate of the downstream coal industry slowed down significantly. The power industry (the largest coal-consuming industry, accounting for nearly 50 per cent) consumed 1.86 billion tons of coal in 2012, down 1 per cent from a year earlier, compared with a growth rate of 16 per cent in 2011.
Supply side: international coal overcapacity, and China is the world's largest coal consumption, and since March 2012, the internal and external coal price gap continues to expand (June coal average price difference reached 169 yuan), resulting in a large number of cheap coal into the country. In 2012, China imported 240 million tons of coal, an increase of 29 percent over the same period last year, and the growth rate was 18 percentage points higher than that of last year.
As a port dominated by domestic coal export, Jinzhou Port has been hit hard. The company's coal throughput grew at a compound rate of 32% from 2007 to 2011; in 2012, the company showed its worst performance since 2000, with port coal throughput of 15.37 million tons, down 33% from a year earlier.
The replacement of imported coal is a major trend, the company's coal business is not optimistic, and the source of goods is expected to be completed by the end of 2013.
Despite the recent rebound in imported coal prices and the narrowing of the internal and external coal price gap, China's coal imports still maintain a crazy growth rate. In January 2013, coal imports reached a record high of 30.55 million tons in a single month, with a year-on-year growth rate of 87%. We believe that under the background of global coal surplus, the long-term downward trend of international coal prices is clear, and the impact of imported coal on domestic coal is difficult to eliminate.
Jinchi-Bai railway is expected to support the company's supply of goods. After the completion of the Jinchi-White Railway at the end of 2013, Jinzhou Port will become an important energy transport base for "transporting coal from the north to the south", and the coal transport volume is expected to reach 35 million tons.
A total of 4.6 billion yuan has been invested in Hong Kong construction in the past three years, and it is expected that the financial cost in 2013 will still be as high as 190 million yuan.
In the past three years, the company has invested a total of 4.6 billion yuan in port construction, laying a solid foundation for Jinzhou Port to become a 100-million-ton port in 2013. Of this total, 2 billion yuan was invested in 2012 (540 million yuan for the general berth on the east bank of Sangangchi, 460 million yuan for the first phase of the oil tank area, and 500 million yuan for the expansion of the waterway), the highest investment in port construction since the establishment of Jinzhou Port. The total amount of interest-bearing debt such as the company's bank loans and the issuance of medium-term notes increased, and the financial expenses increased by 57 million yuan compared with the same period last year, an increase of as much as 70%. In 2013, the company plans to invest 890 million yuan in Hong Kong construction, and the financial cost is expected to reach 190 million yuan (an increase of 60 million yuan).
All the 290 million yuan in subsidies for waterway projects allocated by the Ministry of Communications were fully accounted for this year. Government subsidies are not directly included in the profits and losses of the current period, but depreciation and amortization are deducted year by year, which is expected to reduce the financial pressure of the company.
Profit forecast and investment suggestion
We estimate that the EPS of the company from 2013 to 2014 is 0.07 yuan and 0.09 yuan respectively. At present, the company has suspended trading and planned a non-public offering of shares. Details have not yet been disclosed. The high valuation has already reflected the acquisition expectation of Dalian Port Group and will not be rated for the time being.
Risk hint
The expansion of internal and external coal price difference has an impact on domestic coal trade, and the homogenization competition of ports around the Bohai Sea has intensified.