Qingdao Port released its report for the first quarter of 2024 on April 26, 2024:
In Q1 2024, the company achieved operating income of 4.430 billion yuan, down 2.67% year on year; realized net profit of 1,317 billion yuan, up 4.60% year on year; net cash flow from operating activities was 561 million yuan, down 45.17% year on year; basic earnings per share was 0.20 yuan, up 5.26% year on year; and weighted average return on net assets was 3.22%, down 0.16 percentage points year on year.
Throughput and net profit achieved both growth. 1) In Q1 2024, the company and its branches, subsidiaries, joint ventures and joint ventures (not taking into account the company's shareholding ratio in related subsidiaries, joint ventures and joint ventures) completed a total cargo throughput of 172.04 million tons, an increase of 6.9% year on year; completed container throughput of 7.67 million TEUs, an increase of 11.5% year on year. 2) In Q1 2024, the company achieved net profit of 1.32 billion yuan, an increase of 4.6% year on year; investment income of 420 million yuan, an increase of 10.4% year on year.
Continuously strengthen its status as an international hub port. Qingdao port has remarkable location advantages. Relying on the advantages of Shandong port integration reform, the company seizes strategic opportunities such as the “Belt and Road”, RCEP, Shandong Free Trade Zone, and SCO Demonstration Zone, vigorously expands overseas routes, continues to encrypt inland trains, and continuously consolidates its status as an international hub port. In the container sector, in 2023, the company added 20 new container routes, foreign trade exports increased 13% year on year, international transit container volume increased 14% year on year, and the total number and density of routes steadily ranked first in northern China; 9 inland ports and 7 sea-rail intermodal trains were added, and sea-rail intermodal transport volume reached 2.2 million TEU, an increase of 16% year on year, maintaining the top position of China's coastal ports for nine consecutive years. In the dry and scattered grocery sector, in 2023, the company continued to expand its service methods and hinterland range, enriching new blending business formats. The pulp business volume accounted for 14% of the country's pulp imports, and the market share continued to rank first in the country. In the liquid bulk sector, in 2023, the company put into operation 2.6 million cubic meters of crude oil storage tanks, with its own tank capacity reaching 12.85 million cubic meters. The Dongjiakou crude oil commercial reserve became the largest single storage area in northern China's coastal port, and the synergy between wharves and warehousing was amplified.
The dividend effect may continue to unleash. 1) The company plans to purchase some assets of Shandong Port Rizhao Port Group and Shandong Port Yantai Port Group by issuing shares and paying cash. It is expected that after the restructuring is completed, the overall competitiveness of the company's dry bulk goods and liquid bulk goods sector will be further strengthened, and the position of the hub port is expected to further improve, thus driving the company's profits to increase. This transaction has not yet been completed, so it is recommended to keep an eye on subsequent developments. 2) According to the “2022 2024 Three-Year Shareholder Dividend Return Plan” issued by the company, the annual cash dividend is not less than 40% of the profit that can be used to distribute the current year. In 2023, the company plans to pay a cash dividend of 0.2927 yuan (tax included) per share, an increase of 8.7% over the previous year, with a total dividend of 1.9 billion yuan, accounting for 45% of the current year's distributable profit and 38.59% of net profit attributable to mother. Based on the closing price of 8.06 yuan on April 29, 2024, the estimated dividend rate is about 3.6%.
Profit forecast, valuation and investment rating: Without considering the company's proposed major asset restructuring, the company is expected to achieve net profit of 54.19 billion yuan, 60.14, and 6.593 billion yuan in 2024-2026, with earnings per share of 0.83, 0.93, and 1.02 yuan respectively. The current stock price is 8.06 yuan, and the corresponding PE is 9.7X/8.7X/7.9X respectively, maintaining the “buy” rating.
Risk warning: macroeconomic downturn risk, hinterland economic fluctuation risk, industry rate adjustment risk, port integration falling short of expectations, risk of model assumptions and calculation errors, risk of untimely information data updates.