23/24Q1 net profit to mother +1621%/+821% YoY, maintaining the “Buy” rating
In 2023, the company achieved a total operating income of 74.839 billion yuan/yoy +25.7%; net profit to mother of 2,957 million/yoy +1621%; net profit after deducting non-return to mother - 296 million yuan, an increase of 2,458 billion yuan over the previous year, in line with previous performance advance announcements. With 2024Q1, the company achieved operating income of 15.270 billion yuan, +68.8% year over year; net profit attributable to mother was 401 million, +821% year over year; net profit without return to mother changed to 338 million yuan, an increase of 374 million over the previous year. We estimate that the company's net profit for 24-26 will be 54/90/117 billion yuan, and the corresponding PE will be 31/19/14. Comparable to the 24-year Wind, the average PE was expected to be 20 times higher. Considering the major recovery cycle of the shipbuilding industry, the company, as a global shipbuilding leader, continues to break through in the middle and high-end market, giving 38 times PE in 24 years, corresponding to a target price of 45.60 yuan (previous value was 34.20 yuan), maintaining a “buy” rating.
Profitability gradually improved, and 24Q1 net profit after deducting non-return income turned into a profit of 10.6% /yoy+2.97pp; net profit margin of 3.95% /yoy+3.66pp; net interest rate after deducting non-return of -0.39% /yoy+4.23pp. Among them, non-recurring revenue mainly came from 2,659 billion yuan of revenue generated by the subsidiary Waigaoqiao Shipbuilding and disposing of offshore platform assets.
2024Q1 gross margin was 7.2%, -2.20pp; net profit margin was 2.63%, +2.15pp year on year; net margin after deduction of non-return mother was 2.22%, +2.62pp year on year. In terms of the period cost ratio, the total cost rate for the 2023 period was 7.48% /yoy-2.07pp, and the corresponding sales/management/finance/R&D expenses rates were 0.9%/4.1%/-1.8%/4.2%, respectively, +0.47/ -2.01/+0.45/-0.97pp.
The global shipbuilding market is progressing steadily, and new shipbuilding prices continue to rise
Demand in the global new shipbuilding market was active in 2023, and the average production guarantee factor (number of handheld orders/average shipbuilding completion volume in the past 3 years) reached 3.5 years. According to Clarkson data, the world received 109 million new DWT orders in 2023, up 4.8% year on year; by the end of 2023, global handheld orders reached 268 million dwt, up 7.3% year on year, increasing for three consecutive years. Meanwhile, the Clarkson New Shipbuilding Price Index continued to rise, reaching 178 points by the end of 2023, 10.2% year over year, up 42% from the end of 2020, and a new high since 2009. Under the booming trend in the shipbuilding industry, the price of raw materials for marine steel sheets remains stable and the exchange rate of RMB against the US dollar is declining, and the company's performance is expected to be further released.
The middle and high-end market has a comprehensive layout. The international market share of new green ship orders has reached 57%. Over the years, it has accurately assessed the large-scale, high-end, and greening trends in the shipbuilding industry, continuously optimizing the layout of its shipyards, targeting middle and high-end product fields such as large LNG ships, large cruise ships, dual-fuel oversized container ships, and luxury Ro-Ro ships. In 2023, Waigaoqiao Shipbuilding successfully delivered the first large-scale domestic cruise ship “Aida Mordu”; Jiangnan Shipbuilding actively promoted environmentally friendly fuel, receiving 6 15,000 boxes and 6 13,000 cases of methanol dual-fuel container ships; Guangzhou Shipbuilding International delivered 2 luxury Ro-Ro ships with fully localized interior materials, driving the domestic decoration materials industry to the ocean. The company's new ship order structure continues to be optimized. The international market share of new green ship orders has reached 57%, and the middle and high-end market layout has achieved remarkable results.
Risk warning: risk of fluctuations in raw material prices; risk of exchange rate fluctuations.