Main points of investment:

1. For the first time, the rating is "neutral". Ningbo Port has obvious geographical advantages, capacity expansion promotes the rapid growth of throughput, while the proportion of container terminals with high gross profit margin increases. We predict that the EPS in 2019-21 is 0.26,0.24,0.25 yuan. Compensation for land expropriation led to a substantial increase in net profit in 2019.

Combining the DCF valuation method and the comparable company PE, the target price is 3.93 yuan.

two。 The throughput continues to grow at a high level and the market share increases. In the past decade, the growth rate of cargo throughput of Ningbo Port (listed company caliber) is higher than that of Ningbo-Zhoushan Port, much higher than that of the Yangtze River Delta region and the whole country, and its market share has increased. The increase in the throughput of Ningbo Port is mainly driven by the capacity expansion of the home port and investment in other ports in the province, and the scope of the hinterland is expanded. However, in the future, it will also face pressure such as the decline in the growth rate of China's imports and exports, the difficulty of soliciting goods indirectly in the hinterland, and the diversion of the surrounding professional terminals.

3. The structure is optimized and the proportion of container terminals with high profit margins is increased. The profit margin of container terminals is higher than that of bulk cargo terminals. Ningbo Port focuses on the development of container terminals, and the proportion of income in terminal business has increased by nearly 20 percentage points in the past ten years. Through structural optimization, Ningbo Port alleviates the decline in the profitability of terminal business.

4. The gross profit margin of Ningbo Port tends to be stable. Over the past decade, the gross profit margin of Ningbo Port has shown a downward trend:

The natural rise in wages and the increase in depreciation driven by investment have led to a continuous rise in the cost per ton; competition in the surrounding ports has led to a decline in revenue per ton of bulk cargo. In the past two years, the unit cargo income of the terminal has rebounded, driving the terminal business gross profit margin to be stable. But the terminal business is still under pressure from rising costs.

5. Risk hint. The growth rate of foreign trade imports and exports has declined, port fees have been further reduced, large-scale investment in surrounding ports, and interest rates have risen.