The company announced the 24H1 performance forecast: 24H1's net profit is expected to be 2.55 billion yuan, down 9.1% year on year; net profit after deducting non-return to mother is 2.55 billion yuan, up about 5.4% year on year.
Net profit corresponding to 24Q2 was 1.314 billion yuan, a year-on-year increase of 6%, a year-on-year decrease of 23%; 24Q2 deducted non-return net profit of 1.314 billion yuan, a year-on-year decrease of 14%.
24Q2 freight rates increased month-on-month and year-on-year. The year-on-year increase in the company's operating performance in the international oil transportation market reflected a trend where supply and demand were basically favorable. According to Baltic Exchange data, 24Q2, VLCC TD3C-TCE $44,392/d (considering industry characteristics, the performance corresponds to the average freight rate for March to March), down 14% year on year and 6% month on month.
The company has fully captured market opportunities for different ship types, scientifically adjusted the global capacity layout and ship docking to increase overall fleet revenue, and the sale of 5 ships by the company 23H1 generated disposal revenue of 0.398 billion yuan, while 24H1 did not sell ships.
Continuing to be optimistic about the oil transportation boom cycle interpretation. The 2024 peak season is worth looking forward to (1) Determining the rigidity of the industry's supply, laying the foundation for an upward cycle. According to Clarkson's forecast, the global VLCC capacity growth rate will be close to zero in 2024. It is expected that 2 VLCCs will be delivered throughout 2024, and 1 ship has already been dismantled in January. Currently, ships in the industry are aging seriously. As environmental regulations become stricter, subsequent dismantling is expected to increase. Furthermore, in order to meet environmental requirements, deceleration of the current fleet will also limit effective capacity.
(2) The Red Sea crisis brought about a new wave of shipping boom, and shipowners followed up or increased orders, thereby increasing the tension on the fleet. Short-term deliveries of new tankers are still limited, which is expected to drive the current oil transport boom cycle to last longer than expected.
(3) OPEC+ announced in June that it would extend the 2.2 million barrels per day production reduction announced in November 2023 until the end of September 2024, after which production cuts will gradually be retracted depending on market conditions. Subsequent production is expected to increase or provide additional surprises on the demand side.
(4) Continued global geopolitical disturbances and energy supply security are the primary factors to consider. Loss of supply efficiency and lengthening of delivery distances are expected to generate demand for more tons of nautical miles; moreover, future increases in crude oil demand will mainly come from the Asia-Pacific region, while production increases mainly come from long-distance Atlantic regions such as the United States, Brazil, and Guyana, and longer transportation distances are expected to be a long-term trend.
Profit forecasting and valuation
The company focuses on the main oil and LNG transportation business, with a complete range of ships and leading global capacity. Currently, the ship asset value and ship leasing level are solid, and it is expected to fully enjoy the profit flexibility in the international oil transportation market. At the same time, the company's domestic trade and transportation sector brings stable profits, a stable LNG fleet and rapid growth. It has maintained a high dividend ratio in recent years, and the investment value is prominent. It is expected to achieve net profit of 5.8, 6.6, and 7.1 billion yuan in 2024-2026, maintaining an “increase in holdings” rating.
Risk warning
The global economy is in recession, oil-producing countries have drastically cut production, shipowners have placed large-scale orders to build ships, etc.