Main points of the report

Event description

Lianyungang released its annual results for 2015, KuaiBao, with operating income of 1.243 billion yuan, down 18.73% from the same period last year, with a year-on-year growth rate of-0.84%. The net profit belonging to shareholders of listed companies was 54 million yuan, down 47.61% from the same period last year. In terms of the latest equity, the EPS in 2015 is 0.05yuan, and 2014 is 0.10yuan.

Based on this, it is inferred that the company realized a net profit of 10 million yuan in the fourth quarter, and the corresponding EPS was 0.01yuan, down 55.54% from the same period last year and 16.97% from the previous year.

Event comment

The decline in throughput worsened revenue and investment income was a further drag on net profit growth. In 2015, the company's operating income decreased by 18.73% compared with the same period last year, which is mainly affected by the deterioration of the company's cargo throughput from the results of volume and price analysis. In 2015, the company completed cargo throughput of 46.86 million tons, down 24.10% from the same period last year, and revenue per unit throughput increased by 7.1% over the same period last year. At the same time, as the company's operating costs fell (- 21.61%) more than operating income, the company's gross profit margin rose 2.8 percentage points to 24.22%. In the end, the company's vested net profit decreased by 47.61% compared with the same period last year, mainly due to: 1) due to the decline in macroeconomic growth and the diversion of inter-port throughput, the growth of cargo throughput of terminal subsidiaries was hindered, and the operating performance deteriorated, resulting in a decline in the company's investment income; 2) the company's non-operating income dropped significantly, which we expect to be mainly due to the reduction of the amount returned to the company by the government due to the decline in cargo port fees.

Fourth-quarter results continued to weaken. In the fourth quarter alone, the company's operating income was 302 million yuan, down 22.99% from the same period last year, and the attributable net profit was down 54.31% from the same period last year. The company's operating performance in the fourth quarter continued to be weaker than that in the previous three quarters, which was also affected by the decline in operating income and investment income.

The downstream demand is insufficient and the throughput growth is hindered. The company's handling goods are mainly coal and iron ore. Nationally, in the first 11 months of 2015, the throughput of coal and iron ore in ports across the country increased by 0.11% and decreased by 5.89% compared with the same period last year, which was significantly lower than the growth rate of + 11.19% and + 1.63% in 2014, mainly due to lower demand for iron ore and coal downstream.

Release the performance risk and maintain the "overweight" rating. Considering that the operation of port enterprises is obviously affected by the economic environment, the performance risk of the company has been released in 2015. the bright spots of the company in the future come from: 1) the local port integration will be completed in the establishment process of Lianyungang Port holding Group Co., Ltd.; 2) the negotiations on the free trade zone between China and South Korea will continue to heat up after the completion of the initials of all texts. We expect the company's EPS to be 0.05,0.06 and 0.09 yuan respectively from 2015 to 2017, maintaining its "overweight" rating.

Risk tips: continuous deterioration of throughput and port emergencies