Main points of investment:
The largest comprehensive hub port in South China. Guangzhou Port is mainly engaged in container, coal, grain, steel, automobile, metal ore, oil products and other cargo handling and logistics business, the main business performance is outstanding, in which loading and unloading is the company's main source of income and profit; in recent years, the company has been trying to transform from traditional transport to modern logistics enterprises, around the port to carry out logistics and trade and other businesses. In 2016, Guangzhou Port's total revenue was 7.737 billion yuan, up 15.27% from the same period last year; net profit was 791 million yuan, up 0.58% from the same period last year. The company's business scale continued to expand, and net profit maintained steady growth, mainly due to the rapid development of logistics and trade business. The hinterland of Guangzhou Port is rich in resources, the port infrastructure is solid, and the port collection and distribution system is quite perfect. In 2016, the cargo throughput was 521.81 million tons, a growth rate of 4.25%, leading the 40,000-ton ports such as Shenzhen Port, mainly domestic trade goods. The container throughput is 1858 TEU, a growth rate of 6.80%, second only to Shenzhen Port. In the future, with the further release of container capacity brought about by the Nansha Phase III project, the container throughput gap between the two is expected to narrow.
The port has a solid infrastructure and takes the lead in the construction of 10,000-ton berths. Guangzhou Port has jurisdiction over 4 major port areas, with 73 berths of 10,000 tons and above, leading Shenzhen, Zhuhai and other ports, of which 25 are container cargo. The overall berth capacity of Guangzhou Port is fully utilized. Although the number of berths of more than 10,000 tons of containers in Guangzhou Port is less than that of equivalent container berths in Shenzhen Port, the utilization rate of berths is higher. Most of the container berths in Nansha Port area are in short supply. The completion of Nansha Phase III project in 2017 will lead to the release of 5.7 million TEU container capacity, which will help to greatly improve container throughput in the future.
Build modern logistics services around the port collection and distribution system, and deeply expand hinterland resources. Guangzhou Port has dense transport routes, including Beijing-Guangzhou Line, Guangzhou-Kowloon Line and Guangzhan Line, which connect China's main railway lines. Shugang Highway is connected with a number of national highways and highways, which can directly reach the hinterland. In recent years, the company has carried out multimodal transport business, such as sea-rail intermodal transport, full-process logistics and other new logistics services, vigorously developing modern logistics while expanding the scope of the radiation hinterland. Compared with other ports which have to transfer to the hinterland via Guangzhou, Guangzhou Port has direct access to the surrounding hinterland, which is better in short-distance transportation in places such as the Pearl River Delta.
The net profit of 2017 is expected to be 726 million yuan, with the target share price ranging from 5.86 yuan to 7.03 yuan. We estimate that the return net profit of the company from 2017 to 2019 is 726 million, 779 million and 835 million respectively, the corresponding EPS is 0.12,0.13,0.13 yuan respectively, and the reasonable share price is between 5.86yuan and 7.03yuan.
Risk hint: the port construction has been delayed and the volume of business has not reached the target.