The deep-water port in the north is world-class in anchoring. The main results are as follows: 1) the location advantage is remarkable and the operation efficiency is first-class. Qingdao Port, located at the golden latitude of 36 degrees north latitude, occupies the central position of the port group in Northeast Asia, is an important bridgehead at the intersection of "Belt and Road Initiative", the fourth largest coastal port in the world, and the largest foreign trade port in northern China. The company operates and manages Qingdao Qianwan Port area, Huangdao Oil Port area, Dongjiakou Port area, Dagang Port area and Weihai Port area. The operation efficiency of containers, iron ore, pulp and other goods remains the leading in the world. The fully automated container terminal set a world record of 60.18 natural containers per hour. 2) the hinterland is strong and the transportation network is well developed. In 2022, the total economic output of Shandong Province ranked third in the country, the total value of imports and exports of goods increased by 13.8% over the same period last year, and the total value of imports and exports to countries and regions along the "Belt and Road Initiative" increased by 38.0% over the same period last year, providing a strong supply support for the company to expand its business. At the same time, backed by a large province of traffic, the company has a convenient and efficient railway, highway, waterway, pipeline and other collection and distribution network. 3) leading the profitability industry. In the first half of 2023, the company achieved a net profit of 2.564 billion yuan, an increase of 10.85% over the same period last year. The weighted average rate of return on net assets was 6.63%, an increase of 0.3 percentage points over the same period last year, ranking in the forefront of listed companies in China's coastal ports.
Price: the port is integrated and the rate is better. According to the Port charging method (Jiaoshui (2019) No. 2), port charges include operational service charges that are fixed by the government, guided by the government and regulated by the market. among them, the port charges with market-regulated prices are independently determined by the port operators according to market supply and demand and competition, production and operation costs and service content. Shandong has more than 3000 kilometers of coastline, 30 coastal counties (cities, districts) are dotted with more than 20 large and small ports, almost one county and one port, the port density is large, the phenomenon of hinterland intersection is prominent, and there are some problems such as repeated construction and disorderly competition before integration. In August 2019, the Shandong Port Group, formed by Qingdao Port, Rizhao Port, Yantai Port and Bohai Bay Port, was formally established, and the development direction of the characteristics, differentiation and large-scale development of the ports in the province was clearly defined. With the deepening of port integration reform, the company's comprehensive competitiveness and bargaining power are expected to be further enhanced, and the development trend of port rates is improving.
Quantity: actively expand, growth can be expected. 1) increase the number of routes and build land ports, and continue to add new momentum. In the first half of 2023, the company added 15 new container routes, focusing on building two boutique route groups: "Belt and Road Initiative", RCEP route and European and American ocean direct route. The volume of transit containers increased by 10.1% over the same period last year, and the volume of empty containers increased by 17%. Four new inland ports and two sea-rail intermodal transport trains were opened, and the volume of sea-rail intermodal transport containers increased by 18.6%. 2) High-quality projects have been landed one after another, and the increment can be expected after the release of production capacity. The first, second and third phases of Dongjiakou Port crude Oil Commercial Reserve Project a total of 5.2 million cubic meters of crude oil storage tanks and supporting facilities have been completed and put into operation, and the service capacity of the company's liquid bulk cargo plate has been further improved.
3) with the planning of major asset reorganization, the effectiveness of integration and coordination is expected to be further released. Shandong Port Group plans to inject the company's high-quality port assets, which has a significant synergistic effect with the company's existing port business, which will help the company to improve the geographical layout of the port area, integrate customer resources, expand business scale and market share.
Earnings forecast, valuation and investment rating: from 2023 to 2025, the company is expected to achieve operating income of 198.48 yuan, 216.15 yuan and 23.549 billion yuan respectively, net profit of 49.02 yuan, 54.19 yuan and 6.014 billion yuan respectively, and earnings per share of 0.76,0.83,0.93 yuan respectively. The current stock price is 6.05 yuan, corresponding to PE is 8.0X/7.2X/6.5X respectively. Considering the company's prominent status as a hub port, the dividend of Shandong port integration reform continues to be released, the cargo throughput is expected to achieve stable growth, the development trend of premium rates is improving, and the operating performance has a certain degree of growth, the current valuation still has a lot of room for improvement. For the first time, coverage was given a "buy" rating.
Risk hints: macroeconomic downside risk, hinterland economic fluctuation risk, industry rate adjustment risk, lower-than-expected port integration risk, model assumption and measurement error risk, untimely information data update risk.