SITC(HK:01308) Ge Long Hui·2025-08-18 02:47Core Viewpoint - Haifeng International reported strong financial performance for 1H25, with revenue increasing by 28.0% to $1.66 billion and net profit rising by 79.7% to $630 million, exceeding expectations of $600 million [1] Financial Performance - The company announced an interim dividend of HKD 1.3 per share, with a payout ratio of 72%, resulting in a current dividend yield of 4.8% [1] - Gross margin and net profit margin improved to 40.2% and 37.8%, respectively, reflecting increases of 9.3 and 10.9 percentage points year-on-year [1] - The average container shipping price for the company was $776 per TEU, up 22.8% year-on-year, while the shipping volume reached 1.83 million TEUs, a 7.3% increase [1] Market Dynamics - The supply of small and medium-sized container ships is tightening, leading to a significant increase in rental rates, with a 1-year lease for a 2,000 TEU vessel rising by 83.6% to $26,610 per day [2] - The demand for small and medium-sized vessels is driven by industry restructuring, red sea detours, and adjustments in shipping routes [2] - The supply growth for small and medium-sized ships is projected at 2.2% for 2025, while demand is expected to grow by 3.6%, indicating a favorable supply-demand balance in the Asian container market [2] Future Outlook - The company has raised its net profit forecast for 2025 by 7% to $1.17 billion and maintained profit forecasts for 2026 and 2027 [3] - The target price has been increased by 11% to HKD 31.0, based on a 9.2x PE ratio for 2025, reflecting a strong investment case [3] - The company maintains a 70% dividend payout assumption for 2025-2027, with current stock prices corresponding to dividend yields of 8.8%, 6.9%, and 8.3% for the respective years [3]