Revenue in 2014 rose 51.8 per cent year-on-year to HK $33.56 billion, higher than we expected, mainly due to rapid sales growth during the period. Non-container cargo throughput in the cargo handling business increased by 12.0% year-on-year, while container throughput increased by 5.5% year-on-year. Net profit for shareholders rose slightly by 1.0 per cent year-on-year to HK $819 million, equivalent to our forecast of 100.4 per cent.

The company's non-container handling business is mainly involved in domestic coal trade and iron ore imports, and their throughput is expected to maintain a low growth rate due to China's economic slowdown and transformation. The throughput of the company's port is expected to grow by a single unit in 2015.

Due to the sale of two subsidiaries and weak import and export data based on China, we have lowered our net profit forecasts for 2015 and 2016 by 3.2% and 8.7%, respectively. Earnings per share for 2015-2017 are expected to be HK $0.143, HK $0.143 and HK $0.154, respectively.

Based on the low growth potential, we believe that the current valuation of the company is reasonable. We expect revenue from cargo handling business to continue to grow, but we are concerned that non-container business throughput will be dragged down by China's economic transformation. Therefore, we maintain the investment rating "neutral". Taking into account the current valuation of the port interbank, we raise our target price to HK $1.95, which is equivalent to 13.6x, 13.6x and 12.6x 2015-2017.