Key points of investment
The company announced net profit of 3.351 billion yuan for the year 23, an increase of 129.95% over the previous year; corresponding net profit to mother for 23Q4 - 363 million yuan. (22Q4 was 817 million yuan) Net profit after deducting non-return to mother in '23 was 4.134 billion yuan, an increase of about 197% over the previous year. Corresponding net profit of 23Q4 after deducting non-attributable net profit of 811 million yuan, an increase of 8% over the previous year.
Division of business
Foreign trade oil transportation: OPEC cut production and boosted oil prices, causing peak season freight rates to fall short of expectations. The average TCE value for TD3C routes in 2023 was $35,416/d, up 110% year over year. Among them, the average TD3C TCE in 23Q4 was $37,998/d, up 86% from 23Q3, and down 38% from 22Q4. Contributed gross profit of 4.1 billion yuan in 23 years.
Domestic oil transportation contributed gross profit of 1,488 billion yuan/year over year, and net profit of LNG to mother was 790 million yuan.
24 years of oil transportation is worth looking forward to
1) The Russian-Ukrainian war continues to escalate, the geographical situation is tense, the importance of oil is highlighted, and sector risk premiums continue to rise.
2) The rigidity of supply is prominent. VLCC was ordered in batches in February, but the fuel route was not agreed upon, and the probability of subsequent industry-scale orders is still low. The duration of the boom cycle is expected to exceed expectations.
3) We believe that the sector has gradually moved away from being driven by short-term tariff games, and that underlying asset prices and term rental prices continue to be high, driving the company's NAV to continue to rise.
4) Supply and demand in the oil transportation sector are improving. We believe that the performance of the oil transportation sector is highly deterministic. At the same time, the company has introduced an equity incentive plan to show confidence. The company's dividend ratio was close to 50% in '23.
Profit forecasting and valuation
We expect the company's net profit to be 61.38 billion yuan, 66.19 billion yuan, and 7.082 billion yuan in 2023-2025, respectively, maintaining the “increase in holdings” rating.
Risk warning
Sudden events such as the global economic recession, production cuts in oil-producing countries, large-scale shipbuilding by shipowners, and geographical conflicts.