Synopsis

Beibu Gulf Port announced a bond conversion issue, with a scale of 3 billion yuan, with shareholder placement and online subscription. The T date is scheduled for June 29 (2). We think its listing position may be around 112 yuan, with a winning rate of about 0.0188%. Key purchase information

1. The issuance scale is 3 billion yuan, with shareholder placement and online subscription. The T date is scheduled for June 29 (2); 2. The original shareholders will place the conversion of bonds according to the amount of 1.8468 yuan per share, code 080582, Beigang debt allocation; 3. There is no deposit for online purchases, with a maximum limit of 1 million yuan, code 070582, and Beigang issues bonds.

Underlying stock analysis

The company is a state-owned port enterprise in the North Bay Area. It has now integrated the core coastal ports of North Qinfang, benefiting overall from policies such as new land and sea corridors in the west. Performance growth can be expected. The company's core business is port handling promotion (90.03%). Cargo throughput has achieved high growth in recent years (21.03% 3Y CAGR). On the basis that gross profit remains high (38.39%), revenue/net profit has increased 12.85%/29.06% on a compound annual basis over the past three years. Looking specifically at two aspects, 1) Positive impact on the policy side: According to the “Western Land and Sea New Corridor Master Plan” issued by the National Development and Reform Commission in 2019, by the end of 2025, the railway and sea intermodal container traffic will reach 500,000 TEUs, and the container throughput of Beibu Gulf Port will reach 10 million TEUs (5.3837 million boxes in 2020, implying 13.18% 5Y CAGR). As an important transportation hub for ASEAN trade and sea-rail intermodal transport in the Greater West, we believe its capacity is expected to maintain a high level of growth. At the same time, as major projects at the national and autonomous region levels were implemented one after another, the synergistic benefits of industrial transfer in the east and Qinfang integration in the north developed. Based on the traditional advantages of bulk dry bulk cargo transportation such as ore and coal, the overall performance of the company was highly resilient to risks; 2) In recent years, the port industry generally had a conflict between large-scale port demand and the current slight excess port capacity, while the company acquired a 300,000-ton oil terminal in Qinzhou through this fund-raising project to consolidate the company's ability to handle bulk cargo handling at ports in the southwest region. At the same time, the company's subsidiary shoreline resources were utilized and automated. Transportation engineering further enhances operating capacity. Port throughput has continued to grow at a high level in the past two years, ranking first among the top ten port companies. We believe that in the medium term, as the strategic core enterprise of the Beibu Gulf International Gateway Port, the company's performance growth is clear.

The underlying stock is undervalued, the elasticity is average, the interest of institutional investors is low, and the bottom safety pad is clear. The company's current P/E (TTM) is 13.1x and P/B (LF) is 1.36x, all at historically low levels. The 180-day volatility is 35.44%. The total market capitalization is 13.9 billion yuan, and the circulation volume is 10.8 billion yuan. Institutional attention is low. In August, the controlling shareholder lifted the previous targeted additional ban. Considering the circumstances of the shareholders, we think the pressure caused by the lifting of the ban is limited. The stock price platform from March to April was not maintained. Overall, it shows that the market's recognition of it is limited. However, the turnover rate has recently dropped to a low level, and there is still a certain distance from the chip-intensive area above, so there is a high probability of a short-term rebound. The terms and pricing of debt conversion are medium, and debt bottom protection is strong. The current debt conversion scale was 3 billion yuan, the initial conversion price was 835 yuan, and the latest average price was about 102.04 yuan. The conversion rate is AAA, with a term of 6 years. The coupon interest rate is 0.20%, 0.50%, 1.00%, 1.50%, 1.80%, and 2.00% respectively. The maturity and redemption price is 108 yuan. The YTM corresponding to the face value is 2.09%, the debt bottom is about 90.83 yuan. The debt base protection is strong, and the other terms remain mainstream.

At the pricing level, the company's performance growth is excellent, and the country's policy is highly skewed. The valuation of the underlying stock is fair. Previously, the rate of decline was relatively fast, the turnover rate reached a low level, and there was limited room for downside, so allocation can be considered moderately. Debt transfer clauses remain regular, and debt bottom protection is strong. We think its listing position may be around 112 yuan, the shareholder placement ratio is .50%, and the online purchase rate of 8 trillion yuan is about 0.0188%.