Yantian Port released its annual report in 2016 and quarterly report in 2017. In 2016, the company achieved an operating income of 284 million yuan (+ 14.0%), a gross profit margin of 50.1% (+ 0.1pct), a net profit of 352 million yuan (- 19.2%) and an EPS of 0.18 yuan. The company plans to pay a cash dividend of 0.16 yuan (including tax) for every 10 shares. In the first quarter of 2017, the company realized operating income of 79 million yuan (+ 27.3%), net profit of 80 million yuan (+ 6.2%) and EPS of 0.04 yuan.
The expansion project of toll roads and bridges has been put into production, helping the company's performance to grow steadily. In 2016, the company achieved operating income of 283 million yuan (+ 14.0%), of which transportation business income was 247 million yuan (+ 16.66%). The current traffic volume of Huiyan Expressway controlled by the company is 35.95 million (+ 13.77%). In addition to natural growth, it mainly benefits from the commissioning and operation of the Huizhou section expansion project of Huiyan Expressway. The company's parent net profit decreased by 19.2%, mainly due to the confirmation of 131 million yuan in economic compensation for the Yantian ao tunnel in 2015. excluding this factor, the company's non-parent net profit increased slightly by + 3.2%.
Port high-speed warehousing three-dimensional integration, investment income is the main source of profit. In addition to the main road transport tolls and warehousing and logistics business, the company also holds a 29% stake in Yantian International (Phase I and II), a 35% stake in Xigang Port and a 35% stake in Caofeidian Port. The investment income of the associated company is the main source of the company's profits, accounting for 77.19% and 78.47% of the total profits in the first quarter of 2016 and 2017, respectively.
With the dual drive of Xiongan theme in the Bay area, the return on investment is expected to boost significantly. According to the plan, the first phase of Xiongan New area will be completed in 2020. As the infrastructure of the new area is relatively weak, there is a large demand for ore, steel and machinery and equipment in the short term, which will give a long-term boost to the ports in Tianjin and Hebei. The company holds a 35% stake in Caofeidian Port and is expected to benefit from the improved performance of Caofeidian Port. In addition, the work report of the State Council proposed for the first time the formulation of a development plan for Guangdong-Hong Kong-Macau Greater Bay Area urban agglomeration. The Greater Bay area is an important supplement to China's "Belt and Road Initiative" strategy, and the accelerated pace of opening up to the outside world will be conducive to trade integration and good for the port industry. The company's participation in Yantian International Container Terminal and other companies, the future investment income is expected to be greatly boosted.
Investment suggestion: we estimate that the EPS of the company from 2017 to 2018 is 0.185 yuan and 0.192 yuan respectively. Taking into account the theme catalysis, the company was given an "overweight-A" rating with a six-month target price of 9.27 yuan, equivalent to 50 times the dynamic price-to-earnings ratio in 2017.
Risk tips: the decline in port throughput, the decline in the net profit of participating companies and so on.
