2020 performance slightly exceeded our expectations
The company announced its 2020 results: revenue of 13.43 billion yuan in 2020, an increase of 4.2% over the same period last year; net profit of 690 million yuan, an increase of 14.0% over the same period last year, and earnings per share of 0.31 yuan. Due to the improvement of the company's 4Q gross profit margin, the performance slightly exceeded our expectations. Corresponding to 4Q20's operating income of 3.824 billion, an increase of 10.5% over the same period last year, and a net profit of 61 million yuan, which was significantly higher than a small loss in the same period last year.
Slight increase in cargo throughput: Tianjin Port completed cargo throughput of 421 million tons in 2020, an increase of 2.2% over the same period last year, accounting for 99.8% of the annual plan of 422 million tons. Of this total, the bulk cargo throughput was 228 million tons, an increase of 2.7% over the same period last year, and the container throughput was 1835 TEU, an increase of 6.3% over the same period last year, benefiting from the strong recovery of 2H20 foreign trade demand.
Driven by throughput growth, the company achieved loading and unloading revenue of 6.34 billion yuan in 2020, an increase of 3.1% over the same period last year. The proportion of container business increased the gross profit margin of drive loading and unloading business increased by 1 percentage point to 33.4%.
Trend of development
Thanks to the rebound in global demand and the share of Chinese manufacturing, import and export trade has continued to be resilient. According to CICC Macro, overseas resumption of production may mean that the comparative advantage of China's supply chain may be weakened, but overseas resumption of production may form a support for the export of capital goods.
Coupled with the implementation of a new round of US fiscal stimulus, exports will remain relatively strong in the first half of the year.
The company's business volume continues to grow again. The company's business plan expects to complete cargo throughput of 442 million tons in 2021, an increase of 5% over 2020, including 233 million tons of bulk cargo, an increase of 2% over the same period last year, and 1980 TEU containers, an increase of 8% over the same period last year. According to the data of the Ministry of Communications, from January to February, the cargo throughput of Tianjin Port was 83.32 million tons, an increase of 15.6 percent over the same period last year, and the container throughput was 2.74 million TEUs, an increase of 20.2 percent over the same period last year (the national coastal port growth rate was 21.0 percent).
Considering the low base in the first half of last year, we expect the company to maintain high growth in the first half of this year and slow down in the second half of this year.
Profit forecast and valuation
As throughput is expected to continue to grow, we raise our 2021 net profit forecast by 16.4% to 800 million yuan, and introduce a net profit of 889 million yuan in 2022. The current share price corresponds to a price-to-earnings ratio of 14.5 / 13.1 times 2022. We maintain a neutral rating, taking into account the dilution effect of 2020 companies on EPS after offering shares (10 get 2 free), so we still maintain the target price of 5.93 yuan, corresponding to 17.9 times 2021 price-to-earnings ratio (valuation multiple remains basically unchanged) and 16.1 times 2022 price-to-earnings ratio, which has 23.0% upside compared to the current share price.
Risk
Throughput growth was lower than expected and the global recession led to a decline in trade volume.
