Dalian Port publishes 15-year annual report. The annual income was 8.89 billion yuan, an increase of 11.9% over the same period last year; the net profit attributed to shareholders of listed companies was 480 million yuan, down 7.0% from the same period last year, and the non-net profit was 420 million yuan, down 8.9% from the same period last year. The company plans to pay 0.75 yuan (including tax) for every 10 shares, 3 stock dividends and 10 shares for every 10 shares in the capital accumulation fund.
The oil throughput outperformed others, the bulk grain business continued to plummet, and the performance of other businesses was lacklustre: the growth rate of oil throughput for the whole year was relatively high, with a cumulative increase of 18.9%. Bulk grain continued its decline, with a cumulative decline of 34.3%. Container business was under pressure, with containers falling by 6.0%, automobile business picking up somewhat, and car throughput increasing by 5.7%.
The throughput of ores and groceries decreased by 11.7% and 7.9%, respectively. In addition, passenger transport business fell by 5.0%, and the throughput of ro-ro vehicles dropped by 1.7%. The oil business was the main driver of the company's revenue growth for the whole year, but due to the downturn in the bulk grain and ore sectors and the increase in the cost of production capacity, the company's gross profit margin fell 1 point year-on-year to 16.4%, achieving a gross profit of 1.58 billion. If the macroeconomic growth rate does not exceed expectations in 2016, the port throughput growth rate and the operating situation of listed companies will hardly be significantly improved.
Financial and management costs are the main reasons for the decline in net profit: in 2015, the company's financial expenses increased by 6.4% year-on-year to 660 million, and management expenses increased by 6.9% to 710 million, a total increase of more than 200 million yuan over last year, which is the main reason for the decrease of 38 million yuan in net profit compared with the same period last year.
A high-quality platform for the integration of northern ports. Under the background of the current depressed domestic economic situation and the lack of unified port planning, we think that the deepening integration of the northeast port is expected. Dalian Port, as the largest port in the northeast, is very likely to become the core of the integration of port resources in the northeast region in order to coordinate development.
Opening up the international logistics channel, Belt and Road Initiative went out. Dalian Port is one of the 15 key coastal ports in the national "Belt and Road Initiative" development strategy. at present, it has interconnected with more than 300 ports and regions around the world. the existing foreign cooperation projects include the cold-chain logistics channel with the Russian far East Transport Group, the "Liaoning overseas warehouse" built with the Malmer port in the Baltic Sea to explore cross-border e-commerce, and the free trade zone invested in the African port of Djibouti with China Merchants.
Investment advice: we expect revenue growth of 10.8%, 12.7% and 14.0% for 2016-2018, and net profit growth of 5.0%, 8.2% and 10.5%, respectively. Given a-A rating, the six-month target price is 4.8 yuan, equivalent to 53 times 2016 price-to-earnings ratio.
Risk hint: northeast port integration is lower than expected and overseas market development is lower than expected.