China Merchants Shipping (601872): Q1 Performance Verification Oil Tanker Recovery A New Cycle Is Coming

China Merchants Shipping (601872): Q1 Performance Verification Oil Tanker Recovery A New Cycle Is Coming

Event: China Merchants Shipping released the first quarter report to achieve operating income31.

3.6 billion, an increase of 34 in ten years.

68%; net profit attributable to mother 2.

8.1 billion, 上海夜网论坛 an annual increase of 87.

81%; net profit after deducting non-attribution is 2.

7 ppm, a 459-year increase.

5%.

Analysis: 1.

The oil tanker crossed the bottom in 18 years. In 19 years, it is likely that the upward cycle will start in the first quarter. The oil tanker segment achieved operating income of 16.

19 trillion, an increase of 59% in ten years; net profit attributable to mothers is 2.

56 trillion, expected last year 0.

6.6 billion.

In 18 years, the macroeconomic downturn was obvious, the demand continued to be sluggish, the oil company’s overcapacity was obvious, and the overall performance of the oil operation industry was under pressure.

This situation gradually changed under the circumstances that the changes in the global crude oil trade structure promoted the continued growth of freight demand and environmental protection regulations to promote the dismantling of old ships, and the company realized a loss in oil transportation business in the second half of 2018.

In 19 years, the upward cycle is expected to start after digesting the pressure of transportation capacity delivery and is expected to last for 2-3 years. The company’s overall performance is highly deterministic.

2.

The scale advantage of the VLCC fleet is obvious, and the structure continues to be optimized to help the recovery of oil transportation business continue to the first quarter of 2019. The company has 50 VLCCs, the largest scale in the world.

Another three new orders are expected to be delivered in 2019.

In addition, the dismantling of old ships will be accelerated, and the overall supply structure will be optimized.

On the demand side, due to the continued structure of China’s natural gas imports, the continued increase in crude oil exports from the Caribbean Sea, the increase in the transportation distance, and the improvement of the Sino-US layout, the overall industry demand has picked up, and the objective growth rate of the oil transportation business in 19 years is strong.
3.

The international dry bulk and liquefied natural gas business has a two-pronged approach to supply and demand, with strong revenue certainty. Based on the performance, the main VLOC fleet of the company’s dry bulk shipping fleet has been shipping agreements for many years. Freight rates are not affected by market fluctuations, and performance is highly deterministic.

As of the end of the first quarter, the company had 27 VLOCs and another 7 new ships were ordered.

In the first quarter, due to the downturn in the BDI and domestic trade markets, the acquisition of Changhang International suffered a setback in dry bulk performance, a significant decline in profitability, and net profit attributable to mothers declined 67.

3%.

In the LNG sector, investment income increased by 106 in the first quarter.

18%.

Due to the steady growth of China’s natural gas imports, the demand environment is stable.

In fact, the company’s supply continued to follow up. The number of LNG vessels increased by more than eight, the capacity was steadily improved, and the performance increased strongly.

4.

Investment suggestion: The company’s operating income is expected to be 126 in 2019-2021.

17, 134.

69, 158.

880,000 yuan, net profit is 17 respectively.

69, 28.

45, 34.

2.7 billion, corresponding to PE of 16.

39, 10.19, 8.

46 times.

No level is maintained.

Risk Warning: Crude oil demand exceeds expectations, oil tanker-dry bulk shipping capacity growth exceeds expectations, unexpected safety accidents, and changes in oil prices