Overview of events

The 17th China-ASEAN Expo and China-ASEAN Business and Investment Summit opened on November 27 in Nanning, Guangxi. President Xi Jinping delivered a speech at the opening ceremony of the 17th China-ASEAN Expo and China-ASEAN Business and Investment Summit.

President Xi Jinping delivered a speech at the opening ceremony of China-ASEAN Expo and China-ASEAN Business and Investment Summit. President Xi Jinping pointed out that under the new situation, China regards ASEAN as the priority direction of neighboring diplomacy and the high-quality co-construction of the "Belt and Road Initiative" key areas, supports the building of the ASEAN community, supports ASEAN's central position in East Asian cooperation, and supports ASEAN to play a greater role in building an open and inclusive regional framework. China is willing to work with ASEAN to promote cooperation in various fields under the guidance of the China-ASEAN Strategic Partnership Vision 2030, maintain the good momentum of prosperity and development in the region, and build a closer China-ASEAN community with a shared future. To this end, President Xi Jinping put forward four proposals:

1) enhance strategic mutual trust and deepen the docking of development plans.

2) enhance economic and trade cooperation and speed up the full recovery of the regional economy.

3) promote scientific and technological innovation and deepen digital economic cooperation.

4) enhance anti-epidemic cooperation and strengthen the building of public health capacity.

Among them, in the aspect of "enhancing strategic mutual trust and in-depth docking of development plans", President Xi Jinping pointed out that China is willing to work with ASEAN in accordance with the Action Plan for the implementation of the Joint Declaration on China-ASEAN Strategic Partnership (2021 / 2025). To promote cooperation in various fields in the next five years We will implement the China-ASEAN Joint statement on docking and Cooperation between the Belt and Road Initiative Initiative and the ASEAN Master Plan for Connectivity 2025, rely on the construction of new land and sea channels, strengthen infrastructure connectivity and cooperation such as railways, highways, ports, airports, power and communications, speed up the construction of existing economic corridors and key projects, and actively build a China-ASEAN multimodal transport alliance.

In the first 10 months of 2020, the volume of import and export trade between China and ASEAN was + 7% compared with the same period last year, and ASEAN became China's largest trading partner in 2020. As of November 24, the new land-sea corridor in the western region has reached 4023 sea-rail intermodal transport trains, fulfilling the annual target ahead of schedule.

According to data from the General Administration of Customs, in the first 10 months, China's imports and exports to ASEAN totaled 3.79 trillion yuan, an increase of 7 percent over the same period last year, accounting for 14.6 percent of China's total foreign trade value. ASEAN became China's largest trading partner in 2020.

According to the CCTV network, the new land and sea channel in western China is a new land and sea trade channel created by the cooperation between the provinces in western China and many countries in Southeast Asia. As of November 24, 2020, the railway-sea intermodal transport train in the new land-sea corridor in the western region has reached 4023, fulfilling the annual target ahead of schedule.

The Beibu Gulf Port and the coastal areas of southwest China, as the link between ASEAN and the central and western regions of China and the Great Bay area, are growing rapidly on the basis of a low base.

As the future sea outlet of the whole central and western regions of China, the cargo throughput of Beibu Gulf Port in 2019 is only 210 million tons, which is much lower than that of other Bay area ports in China and the port throughput scale of Vietnam adjacent to Guangxi. the future growth space and potential are huge. In recent years, the rapid growth of electricity consumption, industrial electricity consumption and crude steel production in Guangxi and the rapid growth of cargo throughput in Beibu Gulf Port confirm each other, and continue to verify the investment logic of Beibu Gulf Port under the background of "three structural adjustments".

In 2019, the cargo throughput of China's ports around the Bohai Sea is 4.12 billion tons, the Yangtze River Delta is 1.35 billion tons, the Pearl River Delta is 1.68 billion tons, Fujian Province is 590 million tons, and the throughput of Vietnam port adjacent to Guangxi is about 600 million tons. Beibu Gulf Port, as the sea outlet of the whole central and western region in the future, the throughput is only 210 million tons, the base is very low, and the future growth space and potential are huge.

The high growth of economic data in Guangxi and the high growth of cargo throughput in Beibu Gulf confirm each other:

Electricity consumption: the growth rate of electricity consumption in Guangxi in 2018 and 2019 was + 17.8% and 12% respectively, ranking second in the country, and the growth rate was only lower than that of Tibet, which has a very low base.

Industrial electricity consumption: the growth rate of industrial electricity consumption in Guangxi was + 23.5% in 2018 and 13.5% in 2019, ranking first in the country.

Throughput: in 2018, 2019 and September before 2020, the growth rate of cargo throughput of coastal ports in Guangxi was + 9.7%, 14.7% and 19.6%, respectively, ranking first in the country.

Investment suggestion: reiterate the recommendation of Beibu Gulf Port, the indicator stock for the development of central and western China and ASEAN. Guangxi is the only province in China that borders both land and sea with ASEAN countries (Vietnam). As a new land and sea channel in the west, Beibu Gulf Port is a bridgehead facing ASEAN countries and is the target that benefits most from the development of trade between China and ASEAN. We maintain the profit forecast for the company, reiterate the target price of 21.6 yuan per share, and reiterate the "buy" rating.

We maintain the profit forecast of the company's return net profit for 2020-22, which is 11.7, 14.5 / 1.74 billion yuan respectively, and the EPS is 0.72, 0.89, 1.07 respectively. According to the closing price of 11.61 yuan per share on November 27, 2020, the corresponding PE is 15.7, 12.7 and 10.5 times, respectively. We reaffirm the company's target price of 21.6 yuan per share and reiterate its "buy" rating.

Risk hints: there is a possibility that the macroeconomic environment may be lower than expected; the duration of the epidemic; the short-term announcement of the Beibu Gulf Port convertible bond conversion stock price has not yet been determined; in the short term, the company's per ton cargo income may fluctuate.