In 2009, the company realized operating income of 1.72 billion yuan, a decrease of 35.73% over the same period last year; operating cost of 1.8418988 billion yuan, a decrease of 15.69% over the same period last year; and a net profit of-410 million yuan belonging to shareholders of the parent company, a decrease of 653.91% over the same period last year. Realize earnings per share-0.6073 yuan.
Changhang Fenghuang is a dry bulk cargo transportation company under Sinotrans Changhang Group, which mainly operates bulk dry bulk cargo transportation such as ore, steel, coal, grain and so on in Yangtze River, coastal and near ocean. The company's income mainly comes from Yangtze River transportation and coastal transportation.
Both volume and price fell, and losses widened quarter by quarter. During the reporting period, the company achieved EPS-0.048,-0.097,-0.164 and-0.298 respectively in each quarter, and the loss expanded quarter by quarter. The company completed freight volume of 63.01 million tons, down 11.85% from the same period last year; freight turnover was 42.974 billion tons per kilometer, down 12.48% from the same period last year; in addition to the decline in freight volume, the sharp decline in freight rates compared with the same period last year was also an important reason.
The expansion of transport capacity is radical and the financial pressure is great. At the end of September 2009, the company has a capacity of 2.6 million deadweight tons, including coastal capacity of 700000, Yangtze River capacity of 1.8 million, ocean capacity of 100000. In 2010, it is expected to increase the transport capacity by 40 ships and 410000 deadweight tons.
According to our statistics, by the end of 2009, the order for ships under construction has reached 28 ships and 1.1119 million deadweight tons, and the amount to be delivered is 3.86 billion yuan. These orders will be delivered from 2010 to 2012, with 2010 at the peak of shipbuilding payments. According to the company's budget, it needs to allocate nearly 2.136 billion yuan in 2010, and it will face huge capital expenditure this year. At present, the company's asset-liability ratio has reached 82.1%, up from 79.4% at the end of the third quarter, ranking first in the shipping sector.
The company still faces severe challenges in 2010. On the one hand, the demand in the coastal market is unstable because the price of thermal coal is not straightened out, coupled with the transportation of imported coal and the influence of "one ship, two unloading", which have a great impact on the company's coastal production and operation; on the other hand, excessive competition in the Yangtze River is still severe. The supply of goods from Shangshui is expected to increase, but the supply of goods launched from the Yangtze River has higher requirements on ship type and quality.
Although China's coastal bulk transport demand is expected to further improve with the economic recovery in 2010, due to the competition of a large amount of transport capacity in the whole market, coastal bulk freight rates are not expected to be optimistic, coupled with the financial pressure brought about by capital expenditure, it is expected that the company will still be difficult to make a profit in 2010. From 2010 to 2012, the EPS is expected to be-0.29,0.24 and-0.16 yuan, maintaining a neutral rating.
Risk hints: 1) Freight risk: the rebound rate of coastal bulk freight is lower than expected, which will have a negative impact on the company's earnings; 2) the huge capital expenditure pressure caused by the successive delivery of new ships in the next few years; and 3) the Yangtze River transport business will continue to deteriorate in the future.