\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 018 Shanghai International Port (Group) Co.Ltd(600018) )
Key investment points
Port business: the container throughput in 2021 was + 8.1% year-on-year, driving the revenue of the port sector + 21.11%. Overall: in the whole year, under the background of the company’s efforts to optimize production, explore potential and high growth of foreign trade demand, as the largest container port in China, the cargo throughput of the company’s home port in 2021 was 539 million tons, a year-on-year increase of 5.7%; Among them, the container throughput reached 47.033 million TEUs, a year-on-year increase of 8.1%, ranking first in the world for 12 consecutive years. Meanwhile, the company achieved revenue of 34.289 billion yuan, yoy + 31.28%. The annual revenue of container, miscellaneous bulk cargo, port logistics and port services totaled 29.3 billion yuan, yoy + 21.11%.
By cargo type: in 2021, the container throughput of the company’s home port reached 47.033 million TEUs, a year-on-year increase of 8.1%. Among them, the container throughput of Yangshan port area was 22.813 million TEUs, accounting for 48.5% of the container throughput of the whole port, of which 23.307 million TEUs were transferred from water to water, with a year-on-year increase of 3.8%, and the proportion of water to water transfer was 49.6%; In terms of bulk cargo, the throughput was 82.388 million tons, a year-on-year increase of 8.9%. By business: in 2021, the company’s container / miscellaneous bulk cargo segment achieved revenue of 14.906 billion yuan / 1.365 billion yuan respectively, yoy + 11.70% / + 7.34%. Driven by the steady increase in container throughput, the company’s port logistics / port services achieved revenue of 10.372 billion yuan / 2.657 billion yuan, yoy + 41.81% / + 17.45%. Continue to pay attention to the adjustment of container handling rate of the company. On December 3, 2021, Shanghai International Port (Group) Co.Ltd(600018) announced that the transfer fee for 20 foot heavy containers in domestic trade will increase by about 50%. The company’s container revenue in 2021 will be 14.906 billion yuan, and the total net profit attributable to the parent company will be 14.682 billion yuan. We calculate that if the comprehensive price increases by 10%, the static profit elasticity will be about 8%.
Non port business: the real estate performance increased year-on-year, the shipping industry benefited from high prosperity, and the income of real estate business increased year-on-year. By the end of 2021, 99.8% / 89.1% of the investment plan has been completed for the long beach project / military industrial road project, and the corresponding cumulative completed area accounts for 45.0% / 34.9% respectively. The Jungong road project began to release profits, superimposed with the carry forward and acceleration of the early-stage sales area of the long beach project. In 2021, the above two projects achieved revenue of 777 million yuan / 194 million yuan respectively, totaling 971 million yuan, far exceeding the revenue of 151 million yuan in the same period in 2020. Benefiting from the high prosperity of the industry, the performance of consolidated shipping business increased. In 2021, China’s container freight index averaged 262641 points, a year-on-year increase of 166.80% over 2020. Benefiting from the high prosperity of the industry, Jinjiang shipping, a wholly-owned subsidiary of Shanghai International Port (Group) Co.Ltd(600018) company (mainly engaged in container liner transportation in East Asia, Southeast Asia and across the Taiwan Strait), achieved a revenue of 5.366 billion yuan in 2021, a year-on-year increase of 57.92%; The net profit attributable to the parent company was 1.304 billion yuan, a year-on-year increase of 233.50%. In order to further enhance the profitability and comprehensive competitiveness of Jinjiang shipping, the company announced on January 14, 2022 that it plans to plan the spin off and listing of Jinjiang shipping.
Equity investment: the performance of participating banks and shipping sectors was good, and the investment income increased by 89.65% year-on-year. Overall, the profit of benefiting participating banks and shipping companies increased significantly. In 2021, the company realized an investment income of 9.717 billion yuan in joint ventures, an increase of 89.53% year-on-year. Finally, the company’s total investment income in 2021 was 10.093 billion yuan, a year-on-year increase of 89.65%.
Banking sector: by the end of 2021, the company held Postal Savings Bank Of China Co.Ltd(601658) 3.887% and Bank Of Shanghai Co.Ltd(601229) 8.323% equity respectively. Benefiting from China’s good macro-control and stable and high-quality economic development, the above two banks contributed 1.747 billion yuan / 2.762 billion yuan respectively in 2021, totaling 4.509 billion yuan, a year-on-year steady increase of 10.46%. Shipping sector: by the end of 2021, the company held 9.068% equity of OOCL. OOCL is the world’s leading comprehensive international container transportation and logistics company, with a service network covering Asia, Europe, the Americas, Africa and Australasia. It also benefited from the high outlook of shipping. In 2021, OOCL achieved a net profit of 46.009 billion yuan, yoy + 654.63%, with a corresponding contribution of 4.328 billion yuan, yoy + 624.23%.
Multi party cooperation enables the growth of the main business of the port, especially in the face of the epidemic
On March 8, 2022, the company held a high-level video conference with EVA shipping company and signed a joint venture agreement on “Shanghai Port Northeast Asia empty container transportation center”. The two sides will further deepen the strategic partnership, jointly build Shanghai Port empty container transportation center and improve the service function of Shanghai port as a shipping hub radiating the world. In addition, the company plans to strategically invest Jiangsu Lianyungang Port Co.Ltd(601008) 372 million shares. After this issuance, the company is expected to hold 23.08% of Jiangsu Lianyungang Port Co.Ltd(601008) shares. In addition, a new round of segmented and grid nucleic acid screening has been carried out in Shanghai since March 27, 2022. However, the company has benefited from a high level of automation. In addition to the impact of extreme weather, all production units in Hong Kong still maintain 24-hour operation and production.
Profit forecast and valuation
Comprehensively considering the development of the company’s business lines, we expect the net profit attributable to the parent company from 2022 to 2024 to be 14.797 billion yuan, 12.478 billion yuan and 13.262 billion yuan respectively, corresponding to 8.5 times, 10.1 times and 9.5 times of the current share price PE respectively, maintaining the “overweight” rating.
Risk warning: the global covid-19 epidemic lasted longer than expected; Port related policies are not as expected; Global trade has deteriorated.
