Incident: In the first half of 2024, the company achieved revenue of 2.66 billion yuan, a year-on-year decrease of 0.5%, net profit to mother of 0.192 billion yuan, an increase of 2.8% year-on-year, and EPS of 0.18 yuan.
Terminal throughput continued to grow, but revenue declined slightly due to insufficient container demand: the efficiency of the Xijiang Shipping Main Line waterway continued to improve after the opening of the Grand Tengxia Lock, and the Pearl River water traffic continued to grow in the first half of the year. The company's terminals completed cargo throughput of 25.605 million tons, an increase of 10.5% over the previous year. However, when broken down into business types, it can be seen that the cargo throughput growth rate of most of the company's ports is high and the container growth rate is low. For example, the cargo and container throughput growth rate of Xinghua Port was 2.2% and -9.1%, respectively; the growth rate of Yunfu Port was 21.7% and -2.6%, respectively; and the growth rate of Wuzhou Port was 19.2% and -12.7%, respectively. It can be seen that demand for the container handling business was weak in the first half of the year.
In the first half of the year, the company's port sector achieved revenue of 0.393 billion yuan, a year-on-year decrease of 3.2%, gross profit margin of 47.2%, and a year-on-year decrease of 1.1 pct. Due to the decline in demand for high-rate container handling services, the throughput of the company's terminal business increased in the first half of the year, but revenue and gross profit declined slightly.
Demand in the shipping sector is weak: domestic terminal procurement demand was relatively weak in the first half of the year, the coastal bulk transportation market did not perform well, and freight rates were low. In the first half of the year, the company's fleet achieved 5.299 million tons of bulk cargo transportation, a year-on-year decrease of 31.0%, and container transportation of 0.099 million TEUs, a year-on-year decrease of 51.3%. The company's shipping business revenue was 0.217 billion yuan, down 29.1% year on year. The gross margin was negative, and it was still in a state of loss.
The overall performance of the energy sector was steady. The wind power business was under pressure in the short term, and photovoltaic power plants continued to be put into operation: in the first half of the year, the company's energy sector achieved revenue of 1.19 billion yuan, up 4.4% year on year, gross profit margin 27.7%, down 0.6 pct year on year.
The decline in gross profit is mainly due to the wind power business being affected by extreme weather in some regions. Combined with the decline in the comprehensive electricity price of the Dali Wind Farm, the seven subordinate wind farms achieved operating profit of 46.957 million yuan, a year-on-year decrease of 42.3%.
In the photovoltaic sector, Xiuqiang Co., Ltd. achieved net profit of 0.121 billion yuan in the first half of the year, which is basically the same as the same period last year. In addition, in the first half of the year, the company added 6 distributed photovoltaic power plants. The number of distributed photovoltaic projects reached 18, and the total installed capacity of PV Holdings reached 74.36 megawatts.
The increase in investment income is due to an increase in dividend income and an increase in interest income from structured deposits: the company's investment income in the first half of the year was 0.144 billion yuan, a significant increase from 0.105 billion yuan in the same period last year. It is mainly due to the increase in dividend income from equity investment, and the company's use of temporary idle funds to purchase bank structured deposits to obtain interest income. Corresponsibly, due to idle funds purchasing structured deposits, the amount of interest income in the company's financial expenses decreased year-on-year, leading to a slight increase in financial expenses.
Company profit forecast and investment rating: The company's net profit for 24-26 is estimated to be $3.0, 3.4 billion, and 380 million yuan, respectively, and EPS of 0.27, 0.30 and 0.35 yuan, respectively. The company's port and shipping supply chain logistics system around the Xijiang River has been gradually improved, forming a pattern of joint development between upstream and downstream parties in the industrial chain; the clean energy sector continues to achieve breakthroughs as the company's second main business, and the photovoltaic and wind power business is expected to continue to increase profits. We believe that the company has been operating well for a long time and maintains a “recommended” rating.
Risk warning: macroeconomics fall short of expectations; shipping prices fluctuate greatly; participating companies' performance fluctuate, policy changes; commodity prices fluctuate greatly.