Event: HNA Technology released its 2023 annual report. In 2023, the company achieved operating income of 650 million yuan, an increase of 342.9% over the previous year; net profit attributable to shareholders of the parent company was 240 million yuan for the whole year, an increase of 24.1% over the previous year. At the same time, the risk of related guaranteed debt left over from the company's history has been properly resolved. The company's balance ratio continues to drop to 16.8%, and the company's future growth potential is highlighted.
The main shipping business operates steadily, and the market strategy is flexible and effective. By the end of 2023, the company had 9 dry bulk carrier assets, with a total capacity of about 750,000 DWT, including 6 Daling ships, 2 Cape of Good Hope ships, and 1 Panama-type ship. In the second half of 2023, 5 Daling ships were added through term leasing, with a total controllable capacity of 1.05 million DWT. The company's management actively expanded supply and operating routes, continuously improved its main business capabilities, and achieved that the main routes covered South America, Australia, Southeast Asia and other regions. The fleet transported goods included iron ore, coal, grain, etc., and added transportation such as bauxite and nickel ore as demand in the domestic new energy market increased. In 2023, a total of 110 voyages were operated, and the transportation volume exceeded 7.5 million tons.
The supply and demand situation is expected to improve, and BDI is expected to fluctuate upward. In 2023, due to various factors such as the Russian-Ukrainian conflict, the Panama Canal restrictions, and the Red Sea crisis, the international dry bulk shipping market showed a V-shaped trend. The average annual BDI was 1,378 points, down 28.7% from the previous year, lower than in 2022 and 2021, but it is still in the third highest position since 2012. According to Clarkson statistics, by the end of 2023, there were 13,557 dry bulk carriers worldwide, with a total capacity of 1 billion DWT, an increase of about 3% over the previous year. On the demand side, global maritime iron ore trade volume was 1.54 billion tons, coal maritime trade volume was 1.32 billion tons, and grain shipping trade volume was 540 million tons, with increases ranging from 4% to 7%, respectively. The supply and demand situation has improved, and the dry bulk market as a whole is expected to enter an upward cycle.
Relying on our own shipping business and financial advantages, we have successfully expanded our commodity trade business. In March 2023, the company established Xuanqi Guomao to officially launch the bulk trade business. It is committed to providing customers with end-to-end integrated service capabilities of “procurement → transportation → warehousing → sales”, and is deeply involved in black energy and non-ferrous metals categories, and strives to form a competitive advantage in market segments. The company adopts a “self-purchase and self-sale” direct management model. The upstream purchases directly with well-known domestic and foreign mining companies, and the downstream sells to large domestic central enterprises and state-owned enterprises, making full use of its own capital advantages and transportation capacity to reduce procurement costs for customers, and form links with the main shipping industry to enhance overall profitability.
Profit forecast and investment advice: The company's revenue for 2024-2026 is estimated to be 10.9 billion, 1.26 billion yuan, and 1.4 billion yuan, respectively; net profit due to mother is 1.1, 1.9, and 260 million yuan, respectively; EPS is 0.04, 0.07, and 0.09 yuan, respectively. The corresponding PE is 59, 35, and 25 times, respectively. Considering that the company's main shipping business is back on track, the valuation has a margin of safety and maintains a “holding” rating.
Risk warning: risk of macroeconomic fluctuations, risk of fuel price fluctuations, risk of freight price increases falling short of expectations, etc.