COSCO Hite (600428) Quarterly Report Comment: Performance in line with expectations

2 Apr by admin

COSCO Hite (600428) Quarterly Report Comment: Performance in line with expectations

COSCO Hite (600428) Quarterly Report Comment: Performance in line with expectations

The performance was in line with expectations, and the performance of each segment’s business segment was different. COSCO Hite released the 2019 first quarter report results.

In the first quarter of 19, the company achieved operating income of 19.

US $ 600 million, an annual increase 厦门夜网 of 21%; net profit attributable to mothers was 30.9 million yuan, an annual increase of 57%; net profit attributable to non-mothers was 31.74 million yuan, which could increase by 119%, in line with our expectations.

The substantial increase in profits was mainly contributed by the semi-submersible vessel business.

We maintain our profit forecast for the company for 2019/2020/2021 unchanged (the forecast EPS is 0 respectively.

13/0.

16/0.

17 yuan).

Considering the slow recovery of the company’s multi-purpose vessel business, the company’s valuation is under pressure.

We lower our estimated multiples to 0.

94x-1.

00x 2019E PB (The initial three-year average value of the company’s PB is 1 standard deviation, and the previous value is 1.

10x-1.

15x 2019E PB, 2019E BVPS is 4.

60 yuan), cut the target price range to 4.

3-4.

6 yuan to maintain the “overweight” level.

The semi-submersible ship business has grown significantly, and the project ship model has returned to fruition. The company completed freight turnover in 1Q19.

3 billion tons, an annual increase of 7%; operating operations 99.

5%, an increase of 1 per year.

1 unit.

In terms of different types of vessels, the volume of multi-purpose vessels decreased by 18% each year, but the volume of heavy-lift vessels increased by 10% each year, and the volume of semi-submersible vessels increased by 36%.

Due to the high gross profit margins of semi-submersibles and heavy lift vessels (27% / 15% in 2018 respectively), the substantial increase in traffic volume has significantly driven the company’s profits.

The contract period of the TCO project carried by the company is from 2018 to 2020.

In 2018, the semi-submersible ship business was located in the transition period between the new and old projects, resulting in a decrease in profits. In 2019, the company fully invested in the semi-submersible ship and delivered the project through chartered ships.

With the recovery of international oil prices, we expect the company’s semi-submersible business profit to increase significantly in 2019.

The “Belt and Road” strategic reorganization, the company’s related business accounted for a high proportion. In 2018, the company’s “Belt and Road” line accounted for 43% of the cargo volume, and machinery and equipment transportation revenue accounted for 46%.

The second “Belt and Road” summit forum is focused on complex infrastructure, and the company is the leader in domestic special vessel transportation (as of 2018, the company has 39 multi-purpose vessels with a capacity of 1.1 million dwt, ranking first in the world),Efforts to continue to benefit from the “Belt and Road” national strategy.

Cut target price to 4.

3-4.

6 yuan, maintaining the “overweight” rating. In view of the company’s overall recovery of the multi-purpose vessel business is slow, and the semi-submersible vessel business has steadily recovered, we maintain our company’s profit forecast for 2019/2020/20212.

9/3.

4/3.

7 trillion is unchanged.

Due to the slow recovery of the company’s core multi-purpose vessel business, the company’s valuation is under pressure.

We lower our estimated multiples to 0.

94x-1.

00x2019E PB (The company’s three-year average PB minus 1 standard deviation, the previous value is 1.10-1.

15x2019E PB), cut target price to 4.

3-4.

6 yuan to maintain the “overweight” level.

Risk reminders: 1) The freight rate rises less than expected; 2) Geopolitical risks; 3) Oil price rises; 4) Natural factors; 5) The “Belt and Road” policy is gradually pushed ahead of expectations.