On March 28, 2024, Tangshan Port released its 2023 annual report. In 2023, the company's revenue was 5.845 billion yuan, up 4.0% year on year; net profit to mother was 1.925 billion yuan, up 13.9% year on year. Among them, Q4 achieved operating income of 1,395 million yuan, an increase of 14.3% over the previous year, and realized net profit of 311 million yuan, an increase of 2.55% over the previous year.

Port throughput increased year-on-year, and the company's revenue increased year-on-year. The company's revenue increased 4% year over year in 2023, mainly due to increased cargo throughput. The company's annual cargo throughput was 230 million tons, an increase of 10.7% over the previous year. In terms of main products: 1) Ore completed 107 million tons, an increase of 11.4% over the previous year. The main reason is that steel mills in the hinterland of the company are highly motivated to produce, while the company is actively developing supplies in the northwest and northeast regions. 2) Coal completed 694.86 million tons, an increase of 74.6% year on year, of which coking coal completed 12.812 million tons, an increase of 74.6% year on year. 3) Steel completed 18.3.46 million tons, an increase of 25.8% over the previous year. Among them, foreign trade steel completed 10.781 million tons, an increase of 129.9% over the previous year. Mainly due to strong steel exports, the company strengthened the construction of mixed routes for foreign trade parts. In terms of domestic and foreign trade, the company's foreign trade cargo throughput was 130 million tons, an increase of 22.6% over the previous year.

The gross margin improved year over year, and the cost ratio increased year over year. In 2023, the company's gross margin was 45.65%, up 6.91 pct year on year. It is mainly due to the company taking the initiative to reduce product sales business with low gross margin, and operating costs decreased by 7.7% year on year. The company's expense ratio increased by 0.56 pct year on year, of which the company's sales expense ratio was 0.02%, the same year on year; the management expense ratio was 8.39%, up 1.59 pct year on year; the R&D expense ratio was 1.2%, up 0.42 oct year on year; and the financial expense ratio was -2.33%, down 1.45 pct year on year. The year-on-year decline in the company's financial expense ratio was mainly due to the year-on-year increase in deposit interest income. Due to the significant year-on-year improvement in the company's gross margin, the company's net profit margin was 4.15%, up 0.41% year over year.

Promote the construction of berths, with a design throughput of 25.6 million tons. In March 2024, the board of directors of the company deliberated and passed the “Proposal on Investing in the Construction of Bulk Cargo Berths No. 51 and No. 52 in the Jingtang Port Area of Tangshan Port”. The construction scale of the project is 2 300,000 ton bulk cargo berths and supporting facilities. The annual design approval capacity is 25.6 million tons, and it is planned to use 826 meters of port shoreline. The total investment is estimated to be no more than 5.4 billion yuan. The funding source is 25% of the company's own financing, and the rest is bank loans.

The construction period of the project is 30 months. Looking ahead to 2024, according to the company's business plan, it is expected to complete a throughput of 230 million tons of bulk goods; an estimated operating income of 5.850 billion yuan; and a total profit of 2,598 billion yuan.

The company's 2024-2025 net profit forecast was adjusted to be 2.61 billion yuan and 2,324 billion yuan, and the 2026 net profit forecast was added to the 2026 net profit forecast of 2,605 billion yuan. Maintain a “buy” rating.

Risk warning

The risk of rising labor costs, the risk of port rate control, and the risk of tightening environmental protection policies.