The super bull market of centralized transportation in 2021 makes the capital market feel the huge cyclical charm of the shipping industry again after ten years.
From the ten times “Sea King” Cosco Shipping Holdings Co.Ltd(601919) (01919) earning 89.2 billion a year, to the sharp rise of 2.32 times in the share price of Orient Overseas International (00316) in 2021, and now the CCFI index has risen to a high level one after another, the marine sector of Hong Kong stocks has not stopped.
In time for the Spring Festival in the year of the tiger, Zoomlion shipping, the “dragon 2” of the container transportation industry, also submitted a listing application to the main board of the Hong Kong stock exchange, China International Capital Corporation Limited(601995) and Citigroup as joint sponsors in order to become a member of the capital market.
Bring 9-month revenue of 3.4 billion to Hong Kong
Zhitong finance app learned that Zoomlion shipping is a leading and fastest-growing container shipping enterprise in China. It was established in 2005. Its business models mainly include: integrated route network, fleet and container, port operators, suppliers and strategic partners, customers, pricing and payment, sales and marketing and science and technology infrastructure. The company mainly operates two types of routes: near ocean routes (including routes in Asia) and ocean routes (including Asia Europe, trans The Pacific Securities Co.Ltd(601099) and Asia India subcontinent and Middle East routes).
During the period, the company’s transportation capacity increased rapidly from about 3971 TEU in 2019 to 64582 TEU in the first three quarters of 2021 From 2019 to 2020 and the first three quarters of 2021, the company’s total cargo volume is 140635teu, 182495teu and 299473teu respectively. With the improvement of transportation capacity, its financial performance has also increased strongly.
In terms of finance, the revenue of Zoomlion shipping from 2019 to 2020 and the first three quarters of 2021 was about 401 million yuan, 612 million yuan and 3.431 billion yuan respectively. It can be seen that the company earned nearly six times the revenue of 2020 in the first nine months of 2021. In terms of net profit, it recorded about 20.4 million yuan, 87.2 million yuan and 1.179 billion yuan respectively during the period, and successfully achieved a breakthrough of 1 billion yuan.
For the significant growth of revenue and profit, Zoomlion explained that the significant growth of revenue mainly reflected the growth of revenue from container shipping and extended logistics driven by the significant growth of shipping volume and freight and the opening of new routes. In fact, over the years, the company’s revenue mainly comes from container shipping and related logistics services, which has not changed much.
If divided by region, the company’s revenue will mainly come from Asia before 2020, accounting for as much as 80%. In the first three quarters of 2021, the company’s revenue sources were more balanced. Asia Europe, cross The Pacific Securities Co.Ltd(601099) , within Asia, Asia India subcontinent and the Middle East accounted for 42.2%, 25.8%, 25.7% and 5.7% of revenue respectively.
Among them, the shipping volume between Asia and Europe increased from about 13.3 million TEU in 2012 to about 16.3 million TEU in 2019, with a CAGR of about 2.9%. Shipping volume decreased by about 5.4% in 2020, and then increased to about 9.2% in the first ten months of 2021 due to increased demand. Asia Europe routes became the company’s main source of revenue.
From the perspective of cost, the fluctuation of the components of sales cost is generally consistent with the company’s revenue growth, traffic volume fluctuation and the change of ships used due to business expansion. Among them, the cost of equipment and freight has increased rapidly to 53.7% with the company’s business expansion, and the voyage cost and ship cost have also increased simultaneously.
In terms of gross profit margin, from 2019-2020 to the first September of 2021, the gross profit margin of Zoomlion shipping increased from about 15.1% to about 28.4% at the end of 2020, mainly due to the rise of freight, which is consistent with the sharp rise of market freight rate caused by the surge of market demand and the shortage of transport capacity. At the same time, the net profit margin of the company also rose again and again, from the original single digit to about 34% in the first three quarters of 2021.
In terms of fleet size, most of the company’s ships are small and medium-sized ships with a transport capacity of less than 5300teu. Increase their port selection and make them cover near sea and ocean operations. As of January 24, 2022, the company operates a fleet of 33 ships with a total capacity of 83103teu, of which 31 are chartered ships.
In addition, the company has reached strategic cooperation with other major players in the global container shipping industry (such as large container shipping companies, logistics companies and global technology platforms) to improve service coverage and operational efficiency. The company also gradually improves the value-added service capacity of characteristic logistics to meet the “port to end” logistics and delivery needs of customers, increase diversified revenue and cross sales opportunities, and enhance competitiveness. Well known strategic partners include container shipping companies (such as Antong and Peter Dohle).
Significant dependence on cycle needs attention
Since the fourth quarter of 2020, the centralized transportation market has entered a state of disorder and continues to this day. The “unexpected” high growth on the demand side has become the root cause of this round of “centralized transportation cattle”. With the sharp improvement of the industry business cycle, the enterprises growing together have also ushered in a rare golden period of development.
According to Alphaliner, the company ranked second in the container shipping company which is located in Chinese mainland and provides both ocean and ocean routes as of January 24, 2022. What is more noteworthy is that from October 2, 2020 to January 24, 2022, the company’s international transport capacity ranking rose from 95th to 22nd, and its speed can be called “leap”.
According to the data from the German road, about 30.1% of the container throughput in the world came from Chinese mainland ports, and six of the ten major ports in the world are located in Chinese mainland. China Unicom has operations in these 6 ports. The total number of ports in the world’s ten ports is six.
At the same time, the company has an integrated shipping network composed of 52 routes, providing container shipping services for major routes in Asia, Asia Europe, cross The Pacific Securities Co.Ltd(601099) and Asia India subcontinent and the Middle East. From January 1, 2021 to January 24, 2022, the company’s container shipping services cover 57 ports in 21 countries and regions around the world.
In addition, China is the world’s largest container producer, and about 90% of the global containers produced in 2020 were made in China. In the first three quarters of 2021, the number of containers used by the company increased by more than three times. The percentage of the company’s own shipping containers in the total number of shipping containers in operation increased from about 8.1% at the end of 2020 to about 32.2% in the first three quarters of 2021. With the continuous rise of the industry prosperity, it is understandable for the company to expand its business in time.
In time to go to Hong Kong at the climbing stage of prosperity, Zoomlion shipping is also expected to enjoy a completely different value revaluation from the previous one. It still needs to be noted that at present, the global container shipping industry may fluctuate significantly and be highly cyclical, and may be very vulnerable to the supply of transportation capacity and the change of demand for container shipping services. Almost all the income of Zoomlion shipping comes from centralized transportation. Behind the “prosperity and prosperity” with high concentration, the risk of “loss to all” is also eyeing.
According to the current freight rate and supply and demand situation of centralized transportation, the prosperity of the centralized transportation market remained in the fourth quarter of 2021. The epidemic situation in the United States was serious, the global epidemic continued to spread, the west American port was still congested, consuming a lot of effective transport capacity, the shortage of supply in the centralized transportation market has not been alleviated, and the freight rate remained high due to factors such as shipping schedule delay and port congestion.
However, it can be seen that the delivery time of global suppliers has begun to shorten and the production efficiency has improved, or it means that the efficiency of overseas inland logistics has begun to improve marginally. If the efficiency of inland logistics continues to improve, the congestion pressure at the port end is expected to ease compared with the current one, which will continue to promote the shipping link to achieve a new volume price balance.
