The company released the 2023 semi-annual report: 1) 2023H1 achieved revenue of 9.158 billion yuan, a year-on-year decrease of 7.93%; realized net profit of 2,564 million yuan, an increase of 10.85% over the previous year; achieved non-net profit of 2,521 billion yuan, an increase of 12.6% over the previous year. Achieved a gross profit margin of 36.87%, an increase of 5.05 pct over the previous year; a net profit margin of 27.99% was achieved, an increase of 4.76 pct over the previous year. 2) Quarterly view: 23Q2 achieved revenue of 4.606 billion yuan, down 14.65% year on year, up 1.19% month on month; achieved net profit of 1,305 billion yuan, up 11.61% year on year, and 3.62% month on month; achieved gross profit margin of 36.25%, up 6.33% year on year; achieved net interest rate of 28.32%, up 6.66 pct year on year.
The main port business is growing steadily. The reason for the decline in revenue is the fall in freight forwarder shipping charges and the adjustment of consolidated business. Looking at the business structure, the main factors for the decline in revenue in the first half of the year were: 1) The logistics and port value-added services sector saw a decrease of 676 million yuan in revenue from freight forwarding business due to lower shipping charges; and the port supporting services sector, a decrease of 467 million yuan in revenue from the port construction business due to the change of Qinggang Equipment from a holding subsidiary of the company to a joint venture company in the second half of 2022. 2) The company's liquid bulk business revenue increased by 199 million yuan due to the release of production capacity from the crude oil commercial reserve that was put into operation in the Dongjiakou port area; revenue from the dry bulk business increased by 89 million yuan; and revenue from the container business increased by 67 million yuan. 3) Operating data: 2023H1, its joint ventures and associated enterprises achieved cargo throughput of 330 million tons, an increase of 5.4% over the previous year; achieved a container throughput of 14.52 million TEU, an increase of 11.6% over the previous year.
Net profit of each business grew steadily, and 23H1 Company's share of profit before tax in each business: liquid bulk goods (35.4%) >
Containers (24.2%) > Logistics and port value-added services (21.5%) > Port supporting services (9.9%) >
Dry bulk cargo (9%).
1) Container 23H1 had a net profit of 794 million yuan, an increase of 7.70% over the previous year. The 2023Q1 and 2023Q2 container throughput achieved 688 and 7.64 million TEU, respectively, up 16.6% and 7.5% year-on-year respectively, and increased 11.0% from 2023Q2 to 2023Q1. Consolidated container revenue was 601 million yuan, an increase of 12.49% over the previous year, and a gross profit of 475 million yuan was realized, an increase of 27.85% over the previous year. 2) Liquid bulk 23H1 net profit was 1,085 million yuan, up 8.63% year on year, and reported revenue of 2,031 billion yuan, up 10.84% year on year, and achieved gross profit of 1,244 billion yuan, up 6.31% year on year. 3) Dry bulk 23H1 net profit was 310 million yuan, up 17.92% year on year, and reported revenue of 2.137 billion yuan, up 4.35% year on year, achieving gross profit of 513 million yuan, up 14.55% year on year.
4) Net profit of logistics and port value-added services was 607 million yuan, -0.55% year-on-year. 5) Net profit of port supporting services was 312 million yuan, an increase of 51.54% over the previous year.
The dividends of regional integration are expected to be realized, and high-quality port leaders have the opportunity to reinvent value. Currently, the company is still planning a major asset restructuring. Prior to the integration, Qingdao Port, Rizhao Port, and Yantai Port showed a “trifecta” situation with regard to dry bulk goods. After the restructuring, the competitiveness of Qingdao Port Co., Ltd. in dry bulk and liquid bulk will be further enhanced. Collaboration with the already competitive container business will drive Qingdao Port to become a first-class port with stronger comprehensive strength.
Investment suggestions: 1) Profit forecast: Due to the company's asset restructuring and the proposed share capital to be issued, we maintain the profit forecast for the time being. That is, we expect the company to achieve net profit of 50.8, 56.7 billion yuan, and 6.35 billion yuan respectively in 2023-25, up 12.2%, 11.6%, and 12.1% year-on-year respectively. The corresponding EPS is 0.78, 0.87 and 0.98 yuan, respectively, and PE is 8, 7, and 6 times, respectively. 2) Target price: We maintain the valuation method proposed in depth in the industry, that is, the valuation of leading high-quality ports should be close to the highway, maintain PB 1.5 times the estimated net assets of the company in 2023. The corresponding target price is 9.4 yuan, which is expected to be 52% space compared to the current price, and maintain the “recommended” rating.
Risk warning: There is a risk that the economy will decline and that the hinterland economy will fluctuate significantly.