\u3000\u3 Shengda Resources Co.Ltd(000603) 565 Shanghai Zhonggu Logistics Co.Ltd(603565) )
Events
Shanghai Zhonggu Logistics Co.Ltd(603565) ( Shanghai Zhonggu Logistics Co.Ltd(603565) ) released the annual report, and the company achieved an operating revenue of 12.291 billion yuan, an increase of 17.97% over the same period of last year; The net profit attributable to the shareholders of the listed company was 2.404 billion yuan, an increase of 136% over the same period of the previous year, and the net profit attributable to the parent company after deducting non profits increased by 103% year-on-year.
Comments
1. During the reporting period, although the company completed the transportation volume of 13.26 million TEU, with a year-on-year increase of 1.33%, the profit in this period increased significantly. There are two main reasons:
The company sold four container ships in the first half of 21 years, resulting in an after tax asset disposal income of 470 million. This income accounts for only 20% of the annual net profit attributable to the parent company.
> the freight rate rose in 2021, and the PDCI draw value in 2021 increased by 22% over the same period of last year. During Q1 in 2022, PDCI is still at a high level.
2. Market competition pattern of the company
The company’s main business is domestic container transportation along China’s coast. At present, it is piloting the near ocean routes of Asian neighbors.
Policies and regulations: foreign ships shall not be used to operate China’s waterway transportation business. Therefore, under this industry policy, the market is basically occupied by three Chinese enterprises Shanghai Zhonggu Logistics Co.Ltd(603565) belongs to one of them.
According to the statistics of the Ministry of transport, the compound growth rate of domestic trade container throughput of ports above Designated Size in China reached 10.67% from 2010 to 2019. Due to the epidemic in 2020, the demand for foreign trade is strong, and the domestic trade transport capacity complements the foreign trade market, resulting in a year-on-year increase of only 3.74% in the domestic trade container throughput in 2020 (see the attached figure). From January to October 2021, China’s container throughput increased by 8.03% year-on-year.
National policies guide multimodal transport, reduce the proportion of road transportation, and increase the proportion of container logistics of railway and water transportation. This is also one of the objectives of “carbon neutralization” in the transportation industry. Coastal water transport has lower carbon emissions, is greener, and is cheaper to transport than railways and roads.
The company’s shipping network covers 25 major coastal ports and more than 50 inland ports in China, and the route schedule is stable. The company has opened up ocean routes from the Yangtze River Delta to Ho Chi Minh and Vladivostok to explore the organic combination of the two cycles of “China International”. In the future, it will not rule out the possibility of Southeast Asia or Japan South Korea routes.
3. Transportation resources of the company
By the end of 2021, the company had a total capacity of 2.46 million dwt, with its own capacity accounting for 59%. The company signed 184600teu new ship contracts in 21 years. It is expected that its own transportation capacity will be further improved after being launched month by month in the fourth quarter of this year. With the delivery of its own new ships, the company will gradually return the Chartered ships. In addition to meeting their own needs, their own transport capacity can also be rented out to earn profits. At the end of 2021, the leasing cost of the same ship type of the company nearly doubled compared with the end of the previous year.
Investment rating
For the first time, give a “overweight” rating. It is estimated that the EPS of the company in the next three years will be 2.47, 2.86 and 3.1 respectively, and the corresponding PE will be 10.8, 9.3 and 8.6 respectively.
Risk tips
The duration of high oil prices is too long, and China’s coastal freight rates have fallen too fast.
