Excluding the impact of the trade business, revenue fell 1.0% year on year in 2015. The decline was mainly due to a decline in throughput from the bulk grain business, ore business, and groceries business, and was also offset by increased revenue from the oil business, container business, and value-added services. Shareholders' net profit fell 7.0% year over year to 484 million yuan, in line with expectations.

The oil terminal is expected to remain stable in 2016. On the other hand, ore terminals and grain terminals are expected to remain weak; container terminal throughput is unlikely to increase. Overall, the company's profitability is expected to remain low in 2016.

The total number of new H shares planned to be issued will dilute earnings per share by about 20%. Considering profit forecasts, even considering all the growth potential from the additional capital raised, we still think that the current valuation of the company is significantly overvalued. We maintained our investment rating of “Reduced” and our target price of HK$2.50. Our target price is equivalent to 21.5 times, 23.0 times and 21.8 times the price-earnings ratio 2016-2018, or 0.7 times the 2016 net price-earnings ratio.