A brief review of performance.
In the first half of the year, the company achieved a revenue of 496 million yuan, a decrease of 3.9% over the same period last year, and a net profit of-5.14 million yuan, a loss of 17.3 million yuan over the same period last year.
Business analysis.
The withdrawal of capacity led to a decrease in revenue and a further rebound in capacity utilization: as the company withdrew from two old ships at the end of last year, capacity revenue fell in the first half of the year compared with the same period last year. It is worth noting that although the company's average capacity has dropped by 12% compared with last year, the freight volume has only dropped by about 3%. We estimate that the company's capacity utilization has rebounded by about 5% compared with the same period last year, which is obviously better than that of the whole industry.
Adjust the route structure, increase the level of unit freight and gross profit margin: the freight rate of Panamanian ships continued to fall in the first half of the year, and the company reduced the capacity of foreign trade routes to invest in the relatively profitable domestic trade association transport, which increased the average freight per ton kilometer by 6.3% to 0.029 yuan. As a result, the gross profit margin of the company's shipping business also increased by 4.6% to 15.9%.
The impact of the shortening of transport distance and the recovery of capacity utilization on costs offset each other, and the potential of cost control remains to be tapped: the company's reduction in the capacity of long foreign trade routes led to a reduction in the average transport distance by 12% to 830 nautical miles, which has a pulling effect on unit costs. offset the dilution of the unit cost caused by the recovery in capacity utilization, and the company's cost per ton nautical mile in the first half of the year was 0.0274 yuan, which was basically the same as the same period last year. In addition, in the case of a decrease in business volume and revenue, the company's labor costs and management expenses have increased by double digits, and we believe that the company has the potential to further tap the cost control.
Profit adjustment.
Assuming that the company receives 18 million and 36 million ship-breaking subsidies in 14 and 15 years respectively, and all convertible bonds are converted into shares in the middle of next year, we maintain the profit forecasts of 2014-2016 EPS0.025 yuan, 0.112 yuan and 0.154 yuan, corresponding to the current stock price of 1.5x 1.4x and 1.3x respectively.
Investment advice.
We believe that the coastal dry and bulk transport market bottomed out in the medium term, high-speed business will continue to reduce losses, the overall performance inflection point appears. The recent high-level release of policies on the coal industry is intended to limit the protection of prices, and domestic coal prices are expected to bottom out in the second half of the year, which will lead to a rebound in coastal freight rates. At present, the gap between the market coal price (480 yuan) and the long-term agreement price (568 yuan) is too large, the game of coal and electricity in the fourth quarter may be repeated, and the freight rate is expected to soar in the short term, which is conducive to the release of good performance. As the only coal shipping platform of Zhejiang Group, the first batch of state-owned enterprise reform pilot enterprises, Zhejiang state-owned enterprise reform is expected to speed up the company's focus on its main business, the injection of shipping assets integration and the transfer and liquidation of inefficient assets with no hope of reversing losses. this will be good for the company's profitability and asset quality. Considering that the company benefits from the construction of the Maritime Silk Road and the Zhoushan Islands New area at the same time, it maintains the "buy" investment rating.
