Incidents:
On October 26, 2023, Beibu Gulf Port released its third quarter report. In the first three quarters of 2023, the company achieved operating income of 4.896 billion yuan, +7.50% year-on-year; net profit attributable to the parent company was 848 million yuan, +9.25%; non-net profit attributable to the parent company was 732 million yuan, +5.08% year-on-year.
Among them, in the third quarter, the company achieved operating income of 1,720 million yuan, +11.86% year-on-year; net profit attributable to the parent company was 243 million yuan, +9.31%; and non-net profit attributable to the parent company was 232 million yuan, +14.76% year-on-year.
Investment highlights:
Operations were steady in the third quarter, and performance increased as scheduled. In the first three quarters, the company's cargo throughput reached a total of 22,9714,400 tons, an increase of 12.40% over the previous year, and containers completed 5.7495 million TEUs, an increase of 15.43% over the previous year. Among them, in the third quarter, the company's cargo throughput reached 806.078 million tons, an increase of 22.48% over the previous year, and containers completed 2.1421 million TEUs, an increase of 17.96% over the previous year. The growth rate remains among the highest among ports in the country, and the growth value is prominent. At the same time, in terms of profit margin, net profit margin for the first three quarters was 17.31%, up 0.27pct year on year, and gross margin was 34.52%, up 0.22pct year on year. Net profit margin for the third quarter was 14.11%, down 0.33pct year on year, while gross margin was 32.15%, up 0.56pct year on year.
While maintaining rapid growth, pricing capacity remains relatively stable.
Guangxi's imports and exports are booming, and the Pinglu Canal opened up room for growth. In the first three quarters, Guangxi's foreign trade exports and imports both achieved growth rates of more than 13%. Total import and export volume increased 18.4% year on year, ranking 6th out of 31 provinces (cities and autonomous regions) in the country. As Guangxi's import and export hub port, Beibu Gulf Port continues to enjoy the dividends of growing imports and exports in the hinterland. Currently, Guangxi sea-rail intermodal trains cover 138 stations in 69 cities in 18 provinces in China, and the Beibu Gulf Port container route reaches more than 200 ports in more than 100 countries and regions around the world. In order to speed up the completion of infrastructure shortcomings in the new land and sea corridors in the west and further improve the efficiency of channel operations, especially cross-border logistics, Guangxi has further strengthened the radiation capacity of the hinterland region and played a role in connecting the world through the Pinglu Canal. The Pinglu Canal is expected to be completed in 2026, which will enhance the transportation capacity and efficiency of the new land and sea corridors in western China. When goods from the southwest region go out to sea via the Pinglu Canal, the distance entering the sea will be shortened by about 560 kilometers compared to going out to sea via Guangzhou. It is estimated that transportation costs for the entire western region along the new land and sea corridor will be reduced by more than 5.2 billion yuan per year, which will unleash the shipping advantages and potential of the Beibu Gulf international hub seaport and better serve the southwest and south-central regions entering the sea directly to ASEAN. Beibu Gulf Port will become a high-growth hub for the southwest region facing the world.
Profit forecast and investment rating The port with good growth in the southwest region. We expect the operating income of Beibu Gulf Port in 2023-2025 to be 65.97, 71.66 and 7.785 billion yuan, respectively, and net profit of 11.50, 12.70 and 1,418 billion yuan respectively. The corresponding PE is 11.39, 10.31, and 9.24 times, respectively, covering the first time, giving it an “increase in holdings” rating.
Risks indicate unexpected events such as economic growth falling short of expectations, import and export demand falling short of expectations, global macroeconomic deterioration, goods volume growth falling short of expectations, and natural disasters