Report summary
The integrated logistics business is progressing steadily. The company is currently one of the largest inland waterway terminal operators in the Pearl River Delta region, accounting for 22% of the Guangdong-Hong Kong container transport market, and has recorded steady growth in cargo transportation, cargo handling and warehousing business in recent years. In terms of port freight, as the “Guangdong-Hong Kong-Macao Greater Bay Area” is upgraded to a national strategy, the company follows the trend of economic transformation, actively promotes the transformation and upgrading of the port logistics industry, and upgrades the traditional logistics port into an integrated port. The layout of the Zhuhai Western Wharf and Hong Kong Tuen Mun Wharf will benefit from regional economic integration brought about by the opening of the Hong Kong-Zhuhai-Macao Bridge in the future. In terms of logistics and warehousing, the company complied with the construction of the “Nansha Free Trade Zone”, managed the parent company Nansha Logistics Park, realized a new model of healthy interaction between park and port, strengthened the hub supply hinterland, and opened up a broader integrated logistics market. At the same time, the company grasped the opportunities brought by the “Belt and Road” strategic plan, developed integrated logistics and other business upgrades and transformations along the “Silk Road” along the coast, and built a comprehensive logistics base covering Southeast Asia.
The market position of the passenger water transport business is stable. The company has occupied a leading position in the Guangdong-Hong Kong-Macao high-speed passenger transport business all year round. The joint venture company opened a “Shenzhen-China Corridor” on the water to achieve full coverage of Guangdong-Hong Kong cross-border routes; fully took over the routes between Nansha and Hong Kong city and the airport, and achieved a combination of “going south to the port” and “Sea and Sky Intermodal Transport”; the company managed the “Cotai Air” fleet for ten consecutive years, building the famous “CKS” brand. Responding positively to the impact of the “Hong Kong-Zhuhai-Macao Bridge” and the opening of the Guangzhou-Shenzhen-Hong Kong High Speed Rail on passenger transport business, the joint venture company jointly operated the Hong Kong-Zhuhai-Macao shuttle bus to achieve “parallel waterways”; introduced carbon fiber high-speed boats to reduce costs and increase efficiency, enhance the riding experience, and relieve the pressure of passenger diversion.
Profit forecasts and suggestions: We believe that, driven by the “Guangdong-Hong Kong-Macao Greater Bay Area” policy and the continuous promotion of the company's “big transit” strategy, the company's cargo traffic volume and transportation revenue will maintain a steady upward trend; strategic terminals such as Xiyu Wharf and Tuen Mun Ferry will make a difference in the fields of airport transportation and warehousing, cross-border trade, etc., to provide support for the company's future performance. Currently, the company's dividend ratio is stable, and the stock price fluctuation rate is low, making it suitable for long-term holdings. Based on the target price-earnings ratio of 9 times, we gave the company a six-month target price of HK$2.14, with room for a 6% increase from the current price, corresponding to the “increase in holdings” rating.
Risk warning: the risk of a downturn in the regional economy; the opening of the Guangzhou-Shenzhen-Hong Kong High Speed Rail and the Hong Kong-Zhuhai-Macao Bridge diversion of passenger traffic on water, etc.