成品油运输市场供需向好，奠定周期向上基础。根据Clarksons 数据，截至2024 年3 月MR 船在手订单占运力比为10.6%，而20 岁以上老船运力占比为10%，2024/2025 年MR 新船交付占年初运力比分别为1.5%、3.3%，成品油吨英里需求端增速分别为7.3%、0.3%。此外，我们认为随着环保要求趋严、欧美对俄罗斯油品运输制裁加强，后续老船拆解有望加速，或进一步限制MR 船运力增速，MR 船2024 年年初至今尚未拆解，2023 年拆船4 艘。2023 results fell slightly short of our expectations
The company announced its 2023 results: revenue of 6.197 billion yuan, down 1.08% year on year, net profit of 1.557 billion yuan, corresponding to profit of 0.32 billion yuan per share, up 8.55% year on year; corresponding 4Q23 revenue of 1,549 billion yuan, down 17.4% year on year and 3.9% month on month, achieving net profit of 356 million yuan, down 26.2% year on year and 2.0% month on month. The company's performance was slightly lower than our expectations, mainly due to freight rates for the fourth quarter slightly lower than our expectations. The average freight rate of the TC7 (Singapore-Australia) route mainly operated by 4Q23 was US$21,300 per day, down 14.3% from the previous month and 52.5% from the previous year. In 4Q23, the freight price of refined oil products in the Pacific region fell 0.7% month-on-month and 44.3% year-on-year.
Development trends
Supply and demand in the refined oil transportation market are improving, laying the foundation for an upward cycle. According to Clarksons data, as of March 2024, on-hand MR ship orders accounted for 10.6% of capacity, while those aged 20 and over accounted for 10% of the capacity. New MR ship deliveries in 2024/2025 accounted for 1.5% and 3.3% of the capacity at the beginning of the year, respectively, and the demand-side growth rates of tonnon-mile refined oil products were 7.3% and 0.3%, respectively. Furthermore, we believe that as environmental requirements become stricter and European and US sanctions on Russian oil transportation are strengthened, the subsequent dismantling of old ships is expected to accelerate or further limit the growth rate of MR ships' capacity. Since the beginning of 2024, MR ships have not been dismantled, and 4 ships will be scrapped in 2023.
Influenced by the Red Sea, the center and bottom of small boat freight rates have increased since the beginning of the year, and I am optimistic that the company's profit flexibility will be released. Under the influence of the Red Sea detour, the freight rate center for small and medium-sized tankers has risen markedly. As of March 29, the average freight rate for MR vessels has increased by 60,000 US dollars/day from the beginning of the year to date compared to the same period last year, up 21%. Among them, the year-to-date average price of TC7 routes increased by 11,500 US dollars/day over the same period last year, up 45%. We are optimistic that the company's profitability will be released as the freight center moves up. Furthermore, starting in 2024, we will gradually expand operations in the western market. We believe that with the expansion of the company's operating routes and the increase in MR POOL capacity operated by the company, the company's supply and premium capacity are expected to increase, which will help the company further optimize profitability.
Profit forecasting and valuation
We kept our profit forecast for 2024 unchanged and introduced net profit of 2025 of 2,277 billion yuan for the first time. The current stock price corresponds to 7.5 times the 2024 price-earnings ratio and 7.5 times the 2025 price-earnings ratio. Maintaining an outperforming industry rating, but due to rising freight rates and upward valuations, we raised our target price by 15.4% to 4.5 yuan/share, which corresponds to 9.6 times the 2024 price-earnings ratio and 9.5 times the 2025 price-earnings ratio. There is 26.8% upside compared to the current stock price.
risks
Global demand for oil has declined, geopolitical changes, and orders for new ships have increased dramatically.
