Nanjing Shenghang Shipping Co.Ltd(001205) (001205)
High industry threshold creates high profit
Coastal dangerous chemicals shipping has high access threshold, tight balance between supply and demand, and strong profitability. For coastal liquid cargo dangerous goods shipping, the threshold for new enterprises and new transport capacity is high. The new capacity mainly comes from new shipbuilding, and the scale and index distribution of new shipbuilding capacity are approved by the Ministry of communications every year. The high threshold makes the roe and ROIC of leading companies in the industry generally above 10%.
Transportation demand increased and concentration increased
The shipping enterprises of dangerous chemicals benefited from the growth of transportation demand and the improvement of market concentration. On the one hand, economic development drives the continuous growth of the demand for chemicals. There is a large space for domestic substitution of some chemicals. Large refining and chemical projects have been put into operation one after another, driving the growth of the demand for coastal dangerous chemical shipping. On the other hand, the centralized and large-scale development of the petrochemical industry has led to the improvement of the concentration of downstream transportation links; The comprehensive evaluation system of transport capacity is helpful for the head transport enterprises to obtain new shipbuilding capacity indicators, and the concentration of transport capacity is also improving.
Buying ships and shipbuilding drive the company’s growth
Nanjing Shenghang Shipping Co.Ltd(001205) expand the transportation capacity and increase the share by buying ships and shipbuilding. The transportation capacity of Nanjing Shenghang Shipping Co.Ltd(001205) expanded rapidly, especially the chemical ship. The expansion of transport capacity mainly comes from the purchase of peer ships, which are often rented in advance and then purchased; The second is to build new ships. The concentration of China’s coastal chemical ship shipping market is low, and it is expected to continue to purchase peer ships in the future Nanjing Shenghang Shipping Co.Ltd(001205) . Nanjing Shenghang Shipping Co.Ltd(001205) ranks high in the review of new shipbuilding capacity, and is expected to continue to obtain new shipbuilding indicators in the future.
Profit forecast and Valuation: Ship purchase and shipbuilding expand transportation capacity, achieve high performance growth, and the net profit attributable to the parent company is expected to be RMB 133, 172 and 229 million in 2021-23. According to the discount of excess profit and the average PE of comparable companies, the target price of 2022 is 32.89 yuan, which is covered for the first time and rated as “buy”.
Risk tip: the entry threshold of coastal dangerous chemicals shipping has decreased, the output of chemical industry is at risk of fluctuation, the company’s dangerous chemicals transportation has safety accidents, the fuel price has increased sharply, and the business has diversified rapidly.
