Overview of events

The company released January 2021 throughput data, in January the company completed cargo throughput of 21.9922 million tons, + 12.27% year-on-year, of which container throughput was 468200 TEUs, an increase of 37.59% over the same period last year.

In the new year, the cargo throughput and container growth rate of Beibu Gulf Port rebounded month-on-month in January.

With the weakening of the negative impact of factors such as coal import restrictions on the throughput of the Beibu Gulf Port, the growth rate of the company's cargo and container throughput in January 2021 was higher than that in December last year, among which the growth rate of cargo throughput returned to more than double digits after the short-term fluctuation of Q4 in 2020, which was 3 percentage points higher than the 9.3% growth rate in December 2020. Containers are 12.6 percentage points higher than the 25% growth in December 2020.

The long-term investment value attracts northward capital to continue to increase its positions, and the number of shares held by the Shanghai-Shenzhen-Hong Kong Stock Connect has increased nearly eightfold since the end of 2019.

With the continuous verification of the investment logic by the company's steady growth in throughput and performance, the company has been continuously allocated with northward funds. as of February 3, 2021, the number of shares held by Beibu Gulf Hong Kong, Shanghai and Shenzhen Stock Connect was about 25.28 million shares. accounting for about 6% of the company's freely tradable shares, the number of shares held by Shanghai and Shenzhen Stock Connect on December 31, 2019 was 3.37 million shares, accounting for about 0.67% of the company's freely tradable share capital. The number of shares held by northward funds in Beibu Gulf Port has increased nearly eightfold in a year or so.

The throughput of the three terminals of your port will no longer be included in the company's statistical caliber, and the throughput data will more directly reflect the situation of Hong Kong in Beibu Gulf.

According to the company announcement, in January 2021, the company completed the transfer of ownership from Beibu Gulf Port Guigang Terminal Co., Ltd., Beibu Gulf Port Guigang Container Terminal Co., Ltd., Beibu Gulf Port transfer Terminal Co., Ltd. to Guangxi Beigang Xijiang Port Co., Ltd., since January 2021, the company will no longer include the port throughput data of the above three companies and inland river hosting terminals in the statistical scope. At the same time, the data of last year was adjusted to the same caliber as this year.

Investment suggestion: the steady growth of throughput in January once again confirms the company's long-term investment logic under the background of "three structural adjustments". The adjustment of stock price makes Beibu Gulf Port a rare investment opportunity. We believe that the company's performance will grow at a compound annual growth rate of about 15% over the next five years. According to our profit forecast for 2020, the company's PE valuation is only 11.6 times, and the company's value is significantly undervalued. We maintain our profit forecast for 2020-22 and reaffirm our "buy" rating.

We maintain the profit forecast of the company's return net profit for 2020-22, which is 11.7 yuan 14.5 / 1.74 billion yuan respectively, and the EPS is 0.72 yuan 0.89 yuan per share respectively. According to the closing price of 8.3 yuan per share on February 4, 2021, the corresponding PE is 11.6 pm 9.47.79 times. We reaffirm the company's target price of 21.6 yuan per share and reiterate its "buy" rating.

Risk hint

The macroeconomic environment may decline more than expected; the duration of the epidemic; the short-term announcement of the Beibu Gulf Port convertible bond conversion stock price has not yet been determined; the company's per ton cargo income may fluctuate in the short term.