Shanghai International Port (Group) Co.Ltd(600018) (600018)
China’s leading port enterprise, the world’s largest container throughput for 11 consecutive years: Shanghai International Port (Group) Co.Ltd(600018) is the world’s largest container port operator and China’s largest port listed company. Shanghai port is located at the estuary of the Yangtze River, connecting the Yangtze River with the South and north coasts of China, and connecting all the oceans in the world. It has significant geographical advantages. Taking the most developed regions in China such as southern Jiangsu and Northern Zhejiang as the economic hinterland, the container business has developed steadily. In 2020, the container throughput will reach 43.5 million TEUs, making it the only port in the world to achieve a throughput of more than 40 million TEUs. With the promotion of Shanghai free trade zone and the construction of Shanghai international shipping center, the status of Shanghai port as an international container hub will be further consolidated and strengthened. In May 2020, Yangshan special comprehensive bonded zone was officially unveiled, striving to become an international transit hub in 2035, which will bring momentum to the development of transit business in Shanghai International Port (Group) Co.Ltd(600018) Yangshan deepwater port area. The container throughput of Yangshan port area will be about 20 million TEUs in 2020, and the throughput target of Yangshan port area will be 24 million TEUs in 2025.
Under the epidemic, the global port congestion is serious, and the port rate is expected to increase: since 2020, the epidemic has led to the disorder of the global collection and distribution system and the decline of transportation efficiency. Some container ports are seriously congested and a large number of container ships are stranded. The extension of the ship’s time in port has led to the decline of the capacity turnover rate and the shortage of effective capacity, which has promoted the doubling of the container shipping price. Container port rates are expected to enter an upward period. The main profit of Shanghai International Port (Group) Co.Ltd(600018) comes from container terminal business and investment income. The natural monopoly attribute of container terminal determines that the rate is affected by the policy. In 2021, the tariff reduction for port enterprises will end periodically, some tariff reduction policies will be cancelled when they expire, the superimposed demand will rise, and the port tariff will rise in the first half of 2021. In the stage of global port congestion, port enterprises need to obtain profit incentives to improve port handling capacity. This will also help to improve the efficiency of global container transportation and reduce the cost of export logistics.
Profit forecast and investment suggestions: the growth rate of container throughput and rates have rebounded, and the investment income has increased significantly. It is estimated that the operating revenue in 2021, 2022 and 2023 will be 33354 / 33843 / 36.251 billion yuan respectively, with a year-on-year increase of 27.7% / 1.47% / 7.11%; The net profit attributable to the parent company was RMB 14.681/12.775/12.698 billion respectively, with a year-on-year increase of 76.73% / – 12.98% / – 0.61%; The corresponding PE is 8.81/10.14/10.22 times respectively, giving a “recommended” rating.
Risk tip: the growth rate of Global trade has declined, the port fee reduction policy has been issued, the house price in Shanghai has dropped sharply, and the return on reinvestment has declined.
