Incident Overview Beibu Gulf Port released September throughput data on October 11. In September 2020, the company achieved cargo throughput of 24.1946 million tons, +18.56% year over year; container throughput of 505,800 TEUs, +34.49% year over year. Beibu Gulf Port's Q3 throughput growth rate increased month-on-month, with cargo throughput +18.66% year-on-year and container throughput +31.02% year-on-year in the first three quarters. Judging from single-quarter data, Beibu Gulf Port completed cargo throughput of about 757.22 million tons, up 7.8 percentage points from Q2's +16.4% year-on-year growth rate; Q3 Beibu Gulf Port completed container throughput of about 14.73 million TEUs, +35.1% year-on-year, up 4.4 percentage points from Q2's +30.7% year-on-year growth rate. Driven by the rapid increase in throughput in the third quarter, a total cargo throughput of 202 million tons was completed in the first three quarters of 2020, +18.66% year-on-year, and a cumulative total container throughput of 3.7536 million TEUs, or +31.02% year-on-year. The volume of railway containers handled by the Western Land and Sea Corridor (Qinzhou Port) in the first three quarters has already exceeded 200,000 TEUs, far exceeding the volume of processing for the whole of last year. Continued verification of the logistics structure adjustment logic in the central and western regions has helped accelerate the growth of container throughput at Beibu Gulf Port. According to CCTV news on October 10, 3174 railway and sea intermodal trains operated in the first three quarters of 2020, the new land and sea corridors in the western region, an increase of 1,657 trains over the previous year. The number of trains opened has already surpassed that of last year. At present, the number of railway containers handled by the Western Land and Sea Corridor (Qinzhou Port) has exceeded 200,000 TEUs, far exceeding the number handled in the whole of last year. We believe that with the gradual improvement of infrastructure construction of new land and sea corridors in the west, and the continuous cultivation of freight habits at the southwest port of sea and sea and rail, the radiation capacity of Beibu Gulf Port to central and western regions such as Sichuan and Chongqing will continue to increase in the future, and more and more goods from the central and western regions will use sea-rail intermodal transport to go to sea from Beibu Gulf Port, thus promoting long-term steady growth in Beibu Gulf Port's cargo throughput. The high growth rate of electricity consumption, crude steel production, and electrolytic aluminum production in southwestern regions such as Guangxi, Yunnan, and Sichuan confirm each other's rapid growth in cargo throughput at Beibu Gulf Port. ASEAN continues to be China's largest trading partner, and the company's growth trends and investment logic continue to be verified in the context of three structural adjustments. Electricity consumption: In the first 8 months of 2020, the top 5 regions in the country's electricity consumption growth rate were Yunnan, Gansu, Inner Mongolia, Guangxi and Tibet, with year-on-year growth rates of +9.0%/+6.7%/+6.4%/+5.6%/+5.3%, respectively. Crude steel production: In the first 8 months of 2020, the top 5 regions in the country's crude steel production growth rate were Guangxi, Inner Mongolia, Anhui, Jilin and Yunnan, with year-on-year growth rates of +19.9%/+14.4%/+12.8%/+10.2%/+9.3%, respectively. Electrolytic aluminum: In the first 8 months of 2020, the top 5 regions for electrolytic aluminum production in the country were Sichuan, Yunnan, Shaanxi, Inner Mongolia and Guizhou, respectively, with year-on-year growth rates of +31.7%/+31.5%/+16.0%/+13.1%/+12.5%, respectively. Imports and exports: In the first 8 months of 2020, China's import and export amounts to ASEAN, the European Union, the United States and Japan were 2.93/2.81/2.42/1.40 trillion yuan respectively, accounting for 14.6%/14.0%/12.1%/7.0% of China's import and export trade, respectively. ASEAN continues to be China's largest trading partner. Investment advice: I would like to repeat recommending Beibu Gulf Port, which is seriously underestimated for China's Midwest Development and ASEAN Development Index. Currently, the company's market value is about 16.5 billion yuan. Under careful assumptions, the company's DCF is valued at about 35.4 billion yuan, and there is huge room for future growth. Reiterates the target price of 21.6 yuan/share and reaffirms the “buy” rating. It is estimated that the company's throughput and single-ton revenue in the first half of the year were negatively affected by the epidemic. In the second half of the year, with the stable control of the domestic epidemic, the company's resumption of work and production, and the continued recovery of overseas demand, we expect the company's annual performance to show a low and high trend. We maintain the profit forecast of the company's net profit of 11.7/14.5/1.74 billion yuan for 2020-22, respectively. The corresponding EPS was 0.72/0.89/1.07 yuan, respectively. According to the closing price of 10.10 yuan/share on October 9, the corresponding PE was 14.10/11.41/9.48 times, respectively. Based on our cautious assumptions on factors such as company volume, price, capital expenditure, etc., according to the 8% discount rate commonly applied in the asset-heavy industry, the discounted value of the company's free equity cash flow is 35.4 billion yuan, corresponding to a target price of about 21.6 yuan/share, reaffirming the “buy” rating. Risks suggest that the macroeconomic environment may decline beyond expectations; the short-term situation in the South China Sea; and the short-term convertible debt-for-share price announced by Beibu Gulf Port has yet to be determined.