Introduction to this report:

As a leader in the container industry, the company is involved in various fields such as energy equipment and logistics equipment. We judge the upward cycle of the container industry, compounded by the boost in downstream offshore demand, and we are optimistic about the company's performance growth.

Key points of investment:

Investment advice: The company's performance is in line with expectations, the core business is improving steadily, the volume and price of containers have risen sharply, and the prosperity of the marine and logistics and transportation business is picking up, and I am optimistic about the company's performance growth. Maintain the company's 2024-2026 EPS of 0.47/0.78/0.95 yuan, maintain the target price of 10.66 yuan, and increase its holdings.

Incident: The company released the 2024 three-quarter performance forecast. It is expected to achieve net profit of 16.5 to 2 billion yuan/year on year increase of 233% to 304% in the first three quarters; the company's estimated net profit for the third quarter of 2024 is 7.84 to 1.134 billion yuan/708% to 1,069% year-on-year/ 0.3% to 45% month-on-month increase. The company announced that net profit after deducting non-return to mother for the first three quarters was 7.8-1.13 billion yuan/year-on-year increase of 241% to 394%.

The increase in procyclical container demand and offshore demand helped increase net profit to the mother, and the optimization of exchange rate hedging strategies improved deduction of non-net profit. The company's net profit to mother and net profit not deducted to mother increased due to high growth:

1) Shipping was in an upward cycle in the first three quarters of 2024. Affected by the Red Sea incident, demand in the container industry improved, and the company's dry container sales increased year-on-year; 2) The offshore industry was affected by increased downstream demand, and revenue and net profit for the first three quarters of 2024 increased compared to the same period in 2023; 3) The company optimized exchange rate hedging strategy, and exchange losses were significantly reduced compared to the same period in 2023.

Container sales have increased rapidly in 24 years, and we are optimistic that the medium- to long-term boom will continue in the context of trade restructuring. Since the end of inventory removal in the container industry in 2023, considering the 12-15 year service life of containers, we judge that the 2024 industry renewal demand is about 2-2.5 millionTEU; in the context of global trade frictions brought about by regional conflicts such as the Red Sea, shipping distance growth is a mid-term trend, and downstream container demand is in an upward cycle. Container demand is expected to reach 4.5 millionTEU in 2024. According to the new container inventory index published by the China Container Association, the new container inventory index has continued to operate at a low level since 2024, corresponding to the boost in container prices, and it is optimistic that dry container prices will remain at a high level in 2025.

Risk warning: economic cycle fluctuations, overseas trade protection risks.