The road business was further affected by policies in 2013

Since June 1, 2012, the implementation of new toll standards and the state's introduction of a free public highway passenger pass policy have led to a decrease in the company's road business revenue. The related negative effects have already been reflected in the company's 2012 results. Due to the relevant policies and introduction in mid-2012, judging from year-on-year factors, the negative impact of the subsidiary Huiyan Expressway continued in 2013. Due to the gradual maturity of the industrial park and the increase in private traffic, the impact of the Xiangtan Sihang Bridge on performance is expected to expand further in 2013.

Investment income is expected to increase steadily in 2013

Judging from the situation in the first quarter of 2013, the container throughput of Yantian International Container Terminal increased 6.35% year on year (higher than 3.66% of Shenzhen Port), but lower than the 8.2% growth rate of coastal ports. The overall increase has slowed somewhat compared to 2012. Due to poor shipping companies, preferential handling rates have increased, and the growth rate of the container handling business is expected to slow further due to the increase in labor costs and fuel costs.

The throughput of Caofeidian Port Co., Ltd., in which the company shares, increased dramatically in 2012. Throughput continued to grow at a high rate in the first quarter of 2013, but it is expected that the growth rate will gradually slow down over time.

Investment highlights and investment ratings

Considering the long construction period of the Huizhou coal terminal, the company's main focus is still that the injection of shares in Yantian International Container Terminal (Phase III) and the recovery in external demand have brought about an increase in performance. In the short term, the rapid growth of Caofeidian Port Co., Ltd. can bring a certain increase in the company's investment income. It is expected that the downside risk of the company's road business will be high in 2013, and the growth rate of the container terminal business volume will remain low. It is expected that the company will achieve an EPS of 0.214 yuan in 2013. The year-on-year improvement is not significant, and it will be given a “holding” rating.

Risk Alerts

The recovery of foreign trade fell short of expectations; there was great uncertainty about asset injection; the increase in labor costs exceeded expectations