\u3000\u3 Guangdong Shaoneng Group Co.Ltd(000601) 919 Cosco Shipping Holdings Co.Ltd(601919) )
Event:
Cosco Shipping Holdings Co.Ltd(601919) released the annual report of 2021: during the reporting period, the company achieved a revenue of 333694 billion yuan, a year-on-year increase of 94.85%, and the net profit attributable to the parent company was 89.296 billion yuan, a year-on-year increase of 799.52%. The revenue and freight volume of container business have reached a record high, with brilliant performance, which is basically consistent with the previously disclosed performance forecast.
At the same time, the board of Directors recommended that the company pay a cash dividend of RMB 0.87 per share (including tax) in 2021. Based on the total share capital of the company of 16.014 billion shares by the end of 2021, the total cash dividend is RMB 13.932 billion, which is 15.60% of the company’s net profit attributable to the parent company in 2021 and 50.15% of the distributable profit of the parent company in 2021.
Key investment points:
1. In the year of performance explosion, the length of profit distribution shall be considered
2021 is a year of concentrated outbreak of various contradictions in the global supply chain. The container transport capacity is seriously in short supply, so the shipping price has increased significantly. The annual average of CCFI index in 2021 increased by 165.69% year-on-year. As a global leader in centralized transportation, the company achieved extremely brilliant performance, with a net profit attributable to the parent company of 89.296 billion yuan, a year-on-year increase of 799.52%. On this basis, the company’s dividend per share is 0.87 yuan, with a total dividend of 13.932 billion yuan. According to the company’s closing price of 16.09 on March 30, 2022, the dividend rate can reach 5.41%, which is a relatively good return level. At the same time, the company decided to retain part of its earnings to consolidate its competitive strength and invest in end-to-end networks, digital construction, low-carbon environmental protection transformation and other fields in line with the long-term development trend of the industry, so as to ensure the long-term creation of greater value for shareholders.
2. The freight rate is expected to remain prosperous in 2022, and the long-term association will be gradually implemented to further enhance its performance
The off-season in the first quarter of 2022 was not light, and the CCFI and SCFI indexes increased by 7.41% and 3.26% respectively compared with the fourth quarter of last year. At present, the number of queuing ships in west American ports (Long Beach and Los Angeles ports) is basically stable at 80-90. Considering the coming peak season and the intensification of the epidemic in Asia, it is difficult to significantly alleviate the global port congestion, and the operation of high freight rates still has the support of supply and demand. At the same time, the signing of the company’s long-term association is also gradually implemented. With the signing of European and American long-term associations, the performance certainty and growth of the company in 2022 will be further strengthened. Under neutral expectation, the European and American long-term association will generate nearly 40 billion net profit attributable to the parent this year, so as to provide a higher performance basis for the company.
3. From a long-term perspective, the industry is expected to break away from disorderly competition and stably earn due profits
Considering that 202324 is the period of centralized production of ships, there are hidden worries about surplus at the supply end, and the proportion of orders of container ships in hand in the current total transport capacity has increased significantly, close to the level of 25%. However, considering that IMO will soon implement the detailed rules for carbon reduction in 2023 and the aging of container ships is serious, the actual investment pressure of transport capacity in the future may be offset by the dismantling of old ships. Moreover, the industry has passed the key reshuffle period, and the CR10 / Cr5 of the industry has reached 82.8% / 65%. The position of the head liner company is becoming more and more stable. The alliance operation of liner companies has once again strengthened the market head effect, and Maersk, the leader, has repeatedly stated that it will not put in transport capacity disorderly. Driven by the optimization of the pattern, the demand for cooperation between liner companies is gradually stronger than the willingness to compete. With the continuous enhancement of industry coordination, the industry is expected to move towards a new era of mutually beneficial and win-win development.
4. Profit forecast and investment rating
It is estimated that the operating revenue of Cosco Shipping Holdings Co.Ltd(601919) 20222024 will be 381783 billion yuan, 290499 billion yuan and 241702 billion yuan respectively, the net profit attributable to the parent company will be 121798 billion yuan, 59.990 billion yuan and 33.839 billion yuan respectively, and the corresponding PE will be 2.60, 4.85 and 8.60 yuan respectively, maintaining the “overweight” rating.
5. Risk warning
Risk of large-scale expansion of transport capacity; The risk of world economic recession; Risk of sharp rise in oil prices; Exchange rate fluctuation risk; Natural disaster risk; Industry boom uncertainty.
