Event: in the first half of 2020, the company realized revenue of 1.451 billion yuan (- 2.78%), net profit of 129 million yuan (+ 5.9%) and earnings per share of 0.138 yuan. The profit in the second quarter was 117 million per quarter, up slightly from 113 million in the same period last year.
Foreign trade business was affected by the epidemic, but domestic trade business grew rapidly: during the reporting period, the company's terminal operation service income increased slightly by about 4%. In the case of the restriction of foreign trade business caused by the epidemic, the company actively expanded its domestic trade business. Among them, the domestic trade grocery business of Yunfu New Port increased by 29% compared with the same period last year, and Wuzhou Port added grain silo business.
The rapid growth of domestic trade business ensures that the company's terminal revenue is growing against the trend under the influence of the epidemic.
Fleet construction accelerated and control capacity increased significantly: China News disclosed that the total fleet control capacity exceeded 1 million tons, a significant increase compared with the 430000 tons disclosed in the 2019 annual report, mainly due to the company's active expansion of strategic customers. coupled with the strong demand for freight transport in the Xijiang River Basin, the demand for transport capacity has increased significantly. The company's fleet has begun to show its size, and the shipping business is expanding faster than we expected.
The domestic work resumes production quickly, and the income of the energy sector is stable: the performance of the wind power sector is stable in the first half of the year, and the phenomenon of abandoning the wind after resuming production is significantly improved. Zhuhai Port Holdings made a profit of 46.41 million yuan in the first half of the year, an increase of 9.5% over the same period last year. In the first half of the year, dividends of participating energy enterprises totaled 69.49 million yuan, a slight increase over the same period last year.
Promote the acquisition of Xinghua Port to achieve cross-regional layout: the company actively promoted a comprehensive cash offer to acquire Xinghua Port Holdings Co., Ltd. in the first half of the year. Xinghua Port and Zhuhai Gaolan Port are the main pulp import ports and distribution centers in China. In the first half of this year, Xinghua Port made a net profit of 55.61 million yuan, an increase of 52.4 percent over the same period last year. If this acquisition is successful, the company will achieve the synergy of port, shipping and logistics network systems in the Xijiang River Basin and the Yangtze River Basin, and there is room for further exploration of the profitability of Xinghua Port.
Company profit forecast and investment rating: the rapid growth of port domestic trade demand and the contribution of the energy sector to stable investment income, the company's first-half performance is higher than we expected. In the second half of the year, with the recovery of China's domestic trade and import and export demand, and the gradual improvement of the port operating environment, we expect the company's annual performance to grow slightly compared with the same period last year, so we increase the company's 20-22 net profit to 2.35,2.76 and 317 million yuan, with EPS of 0.25,0.30,0.34 yuan respectively. The improvement of Xijiang navigation environment and the company's cross-regional port and shipping layout are conducive to the rapid expansion of the company's business and bring about sustained growth in revenue and profitability, so we maintain the "recommended" rating.
Risk hints: macro-economy is not as expected; shipping rates fluctuate sharply; the performance of participating companies fluctuates.
