The business of the Yangtze River is weak and difficult to return.

The company is mainly engaged in iron ore, coal and other bulk cargo transport business, customers are relatively concentrated, mainly steel mills, power plants and building materials manufacturers. The Cheung Kong business, which accounts for about 40% of first-half revenue, has been a drag on the company's performance. The fluctuation of the freight rate of the Yangtze River is small, but the competition is extremely fierce, the cost of large enterprises is not dominant, and it is expected that it will be difficult to reverse losses in the short term.

The company is in a strategic transition period.

In view of the sluggish business in Changjiang, the company has been undergoing a transformation from Jiang to Hai in recent years. In recent years, with the launch of new ships, some results have been achieved. In the first half of the year, coastal and ocean income accounted for 56% of the total, and will be further expanded. Of the 1.87 million tons of transport capacity planned in the Eleventh five-year Plan, 1.63 million tons have been delivered along the coast and ocean, and 460000 tons have been delivered by the medium term.

The demand for funds for expansion is huge.

The company's "Eleventh five-year Plan" capacity expansion needs about 8.5 billion yuan, and the delivery capacity investment is 2.5 billion yuan by the middle of this year. According to the development direction, the "12th five-year Plan" company will continue to expand marine transport capacity while stabilizing the scale of the Yangtze River transport capacity. The company has a huge demand for capital, and the business downturn is unprofitable, and the current debt ratio is as high as 84%. However, Sinotrans Group is well funded, and the group level may provide effective financial support to the company in the future.

The disposal of old capacity will bring benefits.

In the third quarter, the company earned 110 million in revenue and 95.52 million in profit from the disposal of old ships. The company's future structural adjustment of the Yangtze River capacity, there are still a large number of old ships to be disposed of, and will bring considerable benefits.

Hope for the integration from the new group.

After the listing of the new Sinotrans Changhang Group, the restructuring of the company is expected to increase. In the shipping sector of the new group, the integration of dry bulk business is the most urgent. However, after the establishment of the new group, all aspects need to run-in, and have a certain impact on the internal business integration process.

Investment rating.

The fourth quarter is the peak season for traditional dry bulk transportation, and the company is expected to reverse its losses this year, and its performance next year will further improve with the recovery of shipping. However, judging from the current supply and demand of dry bulk transport capacity, the recovery next year may not be too strong. Let's not make a specific profit forecast for the time being.

However, with the continuous release of marine capacity, the company's performance flexibility is increasing.

Continue to maintain a neutral investment rating for half a year, focusing on the trading investment opportunities brought about by the expected restructuring and the strength of shipping recovery.