occurrences

The company released financial results for the third quarter of 2023. The first three quarters of this year achieved operating income of 19.22 billion yuan, a year-on-year decrease of 2.72%, and net profit of 4.026 billion yuan, an increase of +15.31% over the previous year. Among them, Q1, Q2, and Q3 achieved revenue in a single quarter: 57.4/64.8/6.99 billion yuan, and net profit of 9.9/12.0/1.83 billion yuan in a single quarter, respectively. The report revealed that the diluted EPS for the first three quarters of this year was 0.21 yuan/share, and the weighted ROE was 5.49%.

reviews

The company's business model focuses on terminal operation and port logistics and capital management development. Its main business mainly includes port handling and related business of containers, iron ore, crude oil, coal, liquefied oil, food, mining materials and other goods, while also engaging in other business such as integrated logistics, trade and sales.

Looking at the past 2 years, the container business has accounted for about 30% of revenue, 38% of gross profit, and an average gross margin of about 40%. This is the company's core business; integrated logistics and agency accounts for more than 35% of revenue, about 30% of gross profit, and an average gross margin of about 27%; the rest of the business includes the handling of bulk minerals and dry bulk goods, accounting for 21% of revenue and 22% of gross profit. The average gross margin is about 35-38%.

In the first three quarters of 2023, the company completed a total container throughput of 33.5 million TEUs, a year-on-year increase of 4.0%, and a cumulative cargo throughput of 841.85 million tons, an increase of 5.6% over the previous year.

In the third quarter of this year, the company acquired 45% of Ningbo Daxie Container Terminal's shares. The original 35% of its shares were re-measured at fair value, generating value-added income of 724 million yuan.

Investment ratings

We are optimistic about the company's strength in integrating port resources in the Yangtze River Delta region, combined with the expansion of procurement methods for the basic supply market in the hinterland, covering the first time and giving it an “increase in holdings” rating.

Risk warning

Cross-regional competition in ports has escalated, foreign trade volume has declined more than expected, and port charging policies have changed.