Event: Ningbo Port announced its performance in 2019, KuaiBao, with an operating income of 24.32 billion yuan in 2019, an increase of 10.8% over the same period last year, a net profit of 3.36 billion yuan, an increase of 16.6% over the same period last year, equivalent to 0.26 yuan in EPS, and a net profit of 2.7 billion yuan after deduction, an increase of 5.3% over the same period last year. The company announced a non-public offering plan and introduced Shanghai Hong Kong Group as a strategic investor.
Comments:
The company's operating data outperformed the industry in 2019. In 2019, the cargo throughput of the country's coastal ports increased by 4.3% over the same period last year, and the container throughput increased by 3.9% over the same period last year. In 2019, the company expects to complete cargo handling of 810 million tons, an increase of 4.7% over the same period last year, and container throughput of 2961 TEU, an increase of 6% over the same period last year. The company's operating data outperformed the industry, with double-digit growth in operating income and home net profit.
The company announced the non-public offering plan, which is planned to be introduced into Shanghai Group and as a strategic investor. The company announced the non-public offering plan, which intends to issue no more than 2.63 billion shares (20% of the total share capital before the issue) and raise no more than 11.21 billion yuan, which is mainly used for wharf construction. The offering price is 90% of the average trading price of A shares in the 20 trading days before the pricing benchmark. The shares that the Shanghai Port Group has promised to subscribe for are 5% of the total number of shares of Ningbo Port after this non-public offering, and the subscription amount shall not exceed RMB 3.7 billion yuan; however, if the share price rise in Ningbo Zhoushan Port causes the subscription ratio of RMB 3.7 billion to be less than the above-mentioned 5%, the actual proportion of shares corresponding to RMB 3.7 billion shall be subscribed. Ningbo Zhoushan Port Group undertakes to subscribe for the number of A shares issued in this non-public offering shall be the actual number of shares issued in this non-public offering minus the remaining number of shares subscribed by the Shanghai Group, and the maximum number of shares subscribed for shall not exceed 1.84 billion shares.
The combination of Ningbo Port and Shanghai Port is conducive to medium-and long-term development. Ningbo-Zhoushan Port ranks first in global cargo throughput, Shanghai Port ranks first in global container throughput, and both ports are located in the Yangtze River Delta. This time, Shanghai Port is introduced as a strategic investor. The combination of the two major ports can integrate the port assets of all parties, give full play to operational synergy, and achieve complementary advantages, which is in line with the guiding direction of national policy. It is also conducive to the medium and long-term development of the two major ports. The outline of the Plan for the Development of Regional Integration in the Yangtze River Delta clearly points out that "strengthen the cooperation and joint development of coastal ports and maritime transport along the river, encourage various port groups to strengthen cooperation by means of cross-shareholding, and promote the coordinated development of ports in the Yangtze River Delta."
Investment advice. Excluding fixed dilution for the time being, the company's EPS from 2019 to 2021 is expected to be 0.26,0.26,0.28 yuan, corresponding to the stock price on February 24, 2020, the PE is 13.4,13.3,12.4 times, maintaining the company's "prudent overweight" rating.
Risk hint. The trade situation deteriorated, the effect of port cooperation was lower than expected, and the income of fund-raising projects was lower than expected.