COSCO Hitech (600428) first coverage report: quality improvement and efficiency waiting for industry recovery

This report reads: The company’s efforts during the industry downturn will show good profitability during the industry recovery period.

Investment Highlights: 11.

Covered for the first time, rated “Neutral”.

COSCO HITEC has continuously expanded its capacity, optimized its fleet structure, improved its operating efficiency, and tried to show good profitability when the industry picked up.

In fact, the market for multi-purpose vessels and semi-submersible vessels is affected by the global economic cycle, and demand risks have increased.

We predict EPS for 2019-21 to be zero.

06, 0.

10, 0.

14 yuan.

Based on the comprehensive DCF estimation method and the average PB of comparable companies, a target price of 3 is given.

61 yuan.


Expand fleet size and increase market share.

In 2010-18, the global capacity of general cargo ships and multi-purpose vessels decreased slightly, while the company’s own capacity increased by 124%, and capacity expansion increased significantly.

The capacity of semi-submersible vessels, automobile vessels and heavy-lift vessels has increased by 689%, 581%, and 413
%, respectively.

During the same period, the company’s total transportation volume increased by 102%, and its market share also increased significantly.

Optimize the fleet and increase economic benefits.

Improve and continuously update ships, increase the average tonnage of ships by 31%, decrease the average age of ships by 49%, and increase the competitiveness of the fleet; gradually, optimize the ship structure, semi-submersible vessels with high gross profit margins, heavy-lift vessels, and 成都桑拿网 automobile capacityThe ratio has increased significantly, making the overall gross profit margin of the past decade on the rise.


Market demand is sluggish and ships are operating efficiently.

Despite the sluggish market demand for the main ship types, the fleet still maintained efficient operation, with an operating rate of about 98%.

The cost efficiency of the fleet has also improved: in 2010-18, the operating cost per unit capacity showed a slight downward trend, and the fuel consumption per unit capacity decreased by 30%.

Once demand picks up, fleets operating efficiently will show good profitability.


risk warning.

The growth rate of foreign trade import and export has increased sharply, a large number of shipbuilding has been expanded, and the fuel price has increased significantly.