The company disclosed the results reported for the third quarter of 2024. The company's revenue for the first three quarters of 2024 reached 12.043 billion yuan, an increase of 33.00% year on year, and net profit to mother reached 1.202 billion yuan, an increase of 31.38% year on year. In the Q3 quarter, the company achieved revenue of 4.563 billion yuan, a year-on-year increase of 47.74%, net profit to mother of 0.473 billion yuan, an increase of 74.00% year-on-year, and 0.467 billion yuan after deducting non-return net profit, which was a year-on-year increase of 159.28%. The company achieved a sharp increase in performance in the third quarter. On the one hand, it benefited from the spillover of distribution, and on the other hand, from the gradual commissioning of new capacity for car ships, pulp carriers, and heavy gondolas this year. We are optimistic about the increase in performance brought about by the subsequent expansion of offshore motor ship production capacity, and maintain the company's purchase rating.

Key points to support ratings

Q3 Revenue increased sharply year over year in a single quarter, and net profit after deducting non-return to mother increased sharply year over year. In the first three quarters of 2024, the company's revenue reached 12.043 billion yuan, an increase of 33.00% year on year, and net profit to mother reached 1.202 billion yuan, an increase of 31.38% year on year. 2024Q3 achieved revenue of 4.563 billion yuan, a year-on-year increase of 47.74%, net profit to mother of 0.473 billion yuan, a year-on-year increase of 74.00%, and net profit after deducting non-return to mother of 0.467 billion yuan, an increase of 159.28% year-on-year. The company achieved a sharp increase in performance in the third quarter. On the one hand, it benefited from the spillover of distribution, and on the other hand, from the gradual commissioning of new capacity for car ships, pulp carriers, and heavy gondolas this year.

The consolidated freight rate index increased sharply year-on-year in the third quarter, and the company gradually added capacity to start production. The average value of the BDI freight index for the third quarter was 1871, up 56.7% year on year from the same period last year. The average value of the CCFI and SCFI freight index for the third quarter was 1991 and 3082, up 127.3% and 212.7% year on year from the same period last year. Overall, the third quarter of shipping and distribution increased in popularity compared to last year, and some spilled over to the company's special ship transportation business. In addition, 6 new multi-purpose pulp ships and 1 heavy gondola were added in the first half of this year. In July, the company's first 7,500-parking “Liaohekou” and “Minjiangkou” car ships were named for launch. According to the company's plan, 5 new ships will be delivered in batches and put into operation in the second half of this year; 11 ships are expected to be delivered next year, and 6 ships will be delivered in 2026. 0.7 Transport capacity of one million units.

The overall supply of capacity in the multi-purpose ship and heavy gondola industry is tightening, and we are optimistic about the increase in performance brought about by the subsequent expansion of offshore motor ship production capacity. According to Clarkson data, as of the end of June, global handheld orders for multi-purpose ships and heavy gondolas accounted for 10.9% of the current fleet capacity, which is at a historically low level, and the supply of capacity is tightening. According to data from the China Automobile Association, automobile exports in September 2024 were 0.539 million vehicles, up 5.4% month-on-month and 21.4% year-on-year. In January-September, automobile exports were 4.312 million vehicles, up 27.3% year on year. While automobile exports continued to maintain a high growth rate, the car rental level also remained at a historically high level. In June, the one-year rent for Clarkson 6,500 car carriers was 0.105 million US dollars/day. We believe that in the future, as offshore motor ship production capacity expands, the company's performance is expected to increase.

valuations

Due to the spillover of the distribution boom and the gradual expansion of the company's capacity, we raised the company's profit forecast. We expect net profit to be 1.609/1.935/2.254 billion yuan for 2024-2026, +51.2%/+20.3%/+16.5%, EPS 0.75/0.90/1.05 yuan/share, corresponding to PE 10.3/8.5/7.3 times, respectively. We are optimistic about the performance increase brought about by the subsequent expansion of Ocean Motor's shipping capacity, and maintain the company's purchase rating.

The main risks faced by ratings

Demand for equipment exports fell short of expectations, automobile shipping prices fell, and the benefits of converting pulp ships to automobiles fell short of expectations.