Zhi Tong Cai Jing·2025-09-04 05:43Core Viewpoint - CICC maintains the net profit forecast for China Merchants Port (00144) for 2025, introducing a new net profit estimate of HKD 7.7 billion for 2026, with current stock price corresponding to 8.2x and 8.0x P/E ratios for 2025 and 2026 respectively [1] Group 1: Financial Performance - The company's 1H25 performance was below expectations, with revenue of HKD 6.457 billion, up 11.4% year-on-year, and net profit attributable to shareholders of HKD 3.584 billion, down 19.5% year-on-year [2] - The decline in net profit was primarily due to reduced investment income from the associate Shanghai Port Group, which was affected by dilution from a share issuance by Postal Savings Bank [2] - Excluding this one-time non-operating loss, the company's core port business revenue and profit growth exceeded expectations, driven by higher throughput [2] Group 2: Operational Metrics - The company's domestic and overseas port throughput and profitability showed year-on-year growth, with controlled terminal container throughput up 11.3% and overall throughput for associated ports up 4.3% [3] - In specific regions, throughput growth was as follows: Pearl River Delta +10.2%, Yangtze River Delta +5.9%, Bohai Rim +0.1%, and overseas terminals +5.0% [3] - The company's port business profit increased by 11.7% year-on-year, with investment income from overseas ports rising by 38.0% [3] Group 3: Cost Management - The company achieved significant operational efficiency, with a year-on-year decrease in cost expenses due to optimized port operations and increased automation [4] - The gross profit margin for 1H25 was 51%, an increase of 2.9 percentage points year-on-year, while administrative expense ratio decreased by 0.8 percentage points [4] Group 4: Growth Potential - The company is optimistic about long-term growth potential from overseas terminal throughput, with significant increases in container throughput at overseas terminals, such as a 542.9% increase at Sri Lanka's HIPG terminal [5] - Upgrades to equipment at certain overseas terminals, like a 24.6% increase in throughput at West Africa's TCP terminal, are expected to drive business volume growth [5] - The company anticipates sustained high growth in overseas port business volume due to economic growth in port hinterlands and ongoing operational enhancements [5]