Guangzhou Port is one of the largest ports in the Pearl River Delta, with a superior geographical location, vast hinterland and domestic trade-based supply structure to enhance the company's anti-risk ability. The valuation of the company's offering price is reasonable, giving "strong recommendation-A" for the first time.
Rating, target price 2.97 yuan.
Guangzhou is a state-owned enterprise and a leading port in the Pearl River Delta region. In 2010, Guangzhou Port Group United Nations Investment Traffic, Guangzhou Development initiated the establishment of Guangzhou Port Co., Ltd., into the group port loading and unloading and related business.
In 2014, the company introduced COSCO Group and Shanghai China Shipping Terminal as strategic investors. By 2016, the company mainly operated 68 berths, completing 75% of the cargo throughput and 85% of the container throughput of Guangzhou Port.
Loading and unloading and related business as the core, expand logistics, port support and trade business. Guangzhou Port is mainly engaged in container, coal, grain, steel, automobiles, metal ores, oil products and other cargo handling and logistics business, of which loading and unloading and related business is the company's core business. Since 2014, the company's cargo throughput has increased steadily, but both handling revenue and gross profit have declined due to the decline in loading and unloading rates. In the case of loading and unloading business under pressure, the company accelerated the expansion of logistics and other businesses, business revenue continued to grow, profits as a whole stable.
The geographical location is superior and the hinterland of goods is vast. The port has the characteristics of regional monopoly, and the economic hinterland determines the texture of the port. The company has a vast economic hinterland, including most provinces and cities in southern China, and the direct economic hinterland is the Pearl River Delta and Guangdong Province. Despite the dense distribution of ports in the Pearl River Delta region, Nansha Port, the company's main container berth, has the advantage of short-distance transportation in contracting goods from the west and north of the Pearl River Delta. Through the construction of Nansha Port Phase III project, the company will expand container handling capacity and enhance market competitiveness.
Fund-raising project: this time, the company plans to issue 698.68 million shares at 2.29 yuan per share and raise 1.55 billion yuan for the construction of the third phase of Nansha Port area, including 4 100,000-ton container berths, 2 70,000-ton container berths and 24 2000-ton container berths with a design capacity of 5.7 million tons per year.
Investment strategy: we forecast that the company's EPS on 17-18-19 will be 0.12 EPS 0.13 PE 0.14 yuan, corresponding to the issue price 2.29 yuan 19.3 Compact 16.6X PE, the first coverage given a "highly recommended-A" rating, the target price 2.97 yuan, corresponding to 17 years 25X PE.
Risk hint: fund-raising projects are not as expected and downstream demand is weak