Summary of the report:
The largest wharf operator in Guangzhou Port. Guangzhou Port is the largest comprehensive port in southern China. In 2016, the overall cargo throughput of Hong Kong exceeded 520 million tons, ranking first in the Pearl River Delta region, 1858 million TEU in container throughput and second in the Pearl River Delta region. As the largest terminal operator in Guangzhou Port, the company accounts for 77.4% of the total cargo throughput and 85.5% of the container throughput. The port location is superior, the hinterland is abundant, the supporting facilities are perfect and the superposition policy supports the promotion of the company's competitiveness.
The throughput of a comprehensive domestic trade port with equal emphasis on containers and dry bulk cargo has increased steadily. The high growth of the company's economic hinterland is a strong guarantee for the company's supply of goods. The growth rate of the company's cargo throughput in 2015 and 2016 was 3.9% and 6.4% respectively; the company's goods are mainly from domestic trade, and the domestic trade cargo throughput has been maintained at about 75% in recent years; the company's throughput is scattered, and its major contributions to revenue and profits are containers, coal, ro-ro cars, grain, metal ores, oil products, iron and steel and so on. In recent years, the decline in handling rates has affected the company's revenue and gross profit, and the company has made efforts to expand port logistics and commodity trade business.
Misplaced business with major competitors. The Pearl River Delta region, Guangzhou Port, Shenzhen Port and Hong Kong Port have a large scale of cargo throughput and are close to each other. By comparison, each port business has its own emphasis, the company's goods are mainly domestic trade, and Shenzhen Port is mainly foreign trade goods, and there are also some differences between the two sources of goods. Hong Kong Port as an international hub port, more than half of its container throughput is international transit container volume.
Fund-raising project: the company intends to raise 1.55 billion yuan for the construction of the third phase of the Nansha Port area of Guangzhou Port, including the construction of four 100,000-ton container berths and two 70,000-ton container berths, with a total investment of 7.47 billion yuan. the project started in June 2012. as of December 31, 2016, the project has completed 6 berths, and the cumulative investment proportion is about 75%. It is expected to be completed and put into use throughout 2017. After the completion of the project, the release of production capacity will serve the company's main loading and unloading business, driving up the company's container throughput.
Profit forecast and investment advice. It is estimated that the EPS from 2017 to 2019 will be 0.12 yuan and 0.13 yuan respectively. According to the valuation level of the comparable company and industry, we give the company a price-to-earnings ratio of 26-35 times in 2017, and the reasonable share price range corresponding to the secondary market is 3.12-4.20 yuan.
Risk tips: fund-raising projects are not as expected; throughput has dropped sharply; port competition has intensified.