South China is a major port of domestic trade, with well-developed berths and transportation networks.
Guangzhou Port is located at the estuary of the Pearl River, adjacent to Hong Kong and Macao. In 2014, Hong Kong's cargo throughput ranked fifth in the country and sixth in the world, accounting for 47.07% of the Pearl River Delta region. the port area is mainly domestic trade goods, accounting for more than 75% of the total cargo throughput in 2016-2016.
Guangzhou Port listed company was established in 2010, and the actual control is Guangzhou SASAC. In terms of throughput results, listed companies basically undertake most of the business in the port area, accounting for 85.8% of the total cargo throughput and 77.7% of the container throughput. The company mainly operates 68 berths, including 25 special berths for containers, 4 special berths for coal, 5 berths for oil and liquid chemical industry, and 34 berths for other bulk cargo. In addition, the company has a well-developed water, public and railway air collection and distribution network and supporting facilities.
The actual controller is the Guangzhou State-owned assets Supervision and Administration Commission, which raised funds to invest in the issuance of 699 million new shares of Nansha Phase III Construction Company, accounting for 11.28% of the total share capital after the issue. it is planned to raise 1.6 billion yuan, and the total share capital after the issue is 6.19 billion. The top five shareholders are Guangzhou Port Group, CIC Transportation Holdings, Guangzhou Development, Cosco Group and Shanghai China Shipping Terminal, respectively. The funds raised will mainly be used for the third phase of the Nansha Port area of Guangzhou Port. The total investment of the project is 7.474 billion yuan. By the end of 2016, the investment proportion of the project has been completed.
The growth of throughput is steady, and the four types of income are mainly loaded and unloaded.
From 2014 to 2016, the cargo throughput of Guangzhou Port was 5.1%, of which the relatively high domestic trade throughput CAGR was 5.9%, and the overall growth was relatively steady. Guangzhou Port stock income mainly comes from four major sectors, namely, loading and unloading and related business, logistics and port auxiliary business, trade business and other business sectors. Loading and unloading and related business make the greatest contribution to income and gross profit, contributing 54.3% and 84.4% respectively.
The macro growth rate slowed down and the competitive pressure was superimposed, and the performance of the core sector declined slightly.
The company's loading and unloading business sector has declined for two consecutive years since 2014. in 2016, Guangzhou Port's share handling and related business realized revenue of 4.138 billion yuan, down 2.05% from the same period last year, and gross profit was 1.632 billion yuan, down 4.43% from the same period last year. We believe that the revenue growth of Guangzhou Port is mainly due to the increase in the confirmed value of the trade sector. the decline in gross margin and net profit is more due to the slowdown in macroeconomic growth and the competitive pressure brought about by the continuous increase in port capacity in the Pearl River Delta region in South China over the past few years.
Investment suggestion: on the one hand, the company's IPO project will increase container terminal capacity and business volume, but at the same time, with the commissioning of Nansha Phase III terminal, it is still possible to further intensify regional port competition. We judge that the "new" enthusiasm in the secondary market will increase the company's short-term market value in the short term, but combined with the growth potential brought by the company in the core region of the Pearl River Delta and the current reference valuation of A-share brothers. The reasonable valuation of Guangzhou Port shares is between 25 and 30 times.
Risk hint: increased competition among ports in the region; higher-than-expected macroeconomic decline