Changjiang Securities·2024-08-10 14:59Investment Rating - The investment rating for Qingdao Port is "Buy" with a first-time recommendation [5]. Core Views - Qingdao Port is one of the few port-listed companies that maintains a low debt ratio while achieving high asset turnover and net profit margin. The container business is the fastest-growing segment, and in 2023, Qingdao Port became China's third-largest container port. The company is expected to benefit from the integration of ports in Shandong Province, presenting new opportunities [2][5]. Summary by Sections Company Overview - Qingdao Port International Co., Ltd. is the main operator of Qingdao Port and has been indirectly controlled by Shandong Port Group since 2018. The company provides various port-related services and operates five major port areas with clear divisions of labor. It has a unique business model that involves introducing partner shareholders to secure cargo sources [5][6]. Financial Performance - In 2023, Qingdao Port achieved a total cargo throughput of 664 million tons, a year-on-year increase of 5.8%. The company reported operating revenue of 18.17 billion yuan and a net profit attributable to shareholders of 4.92 billion yuan, reflecting a 9% increase year-on-year. The company has maintained a compound annual growth rate of 13% in net profit over the past decade [29][36]. Container Business - The container business is expected to grow steadily due to the developed hinterland economy and a dense network of shipping routes. Qingdao Port's container throughput growth rate is significantly higher than the national average, supported by favorable policies from Shandong Province to attract new shipping routes. The company became the third-largest container port in China in 2023, with a profit contribution rate exceeding 55% in recent years [5][38][39]. Liquid Bulk Business - The liquid bulk business is the largest profit contributor, benefiting from a developed petrochemical industry in the hinterland. The high utilization rate of terminals and low costs have maintained a gross profit margin above 50%. The expansion of oil terminals and pipelines is expected to further extend the port's hinterland [5][36]. Strategic Positioning - Qingdao Port is positioned as a leading hub port in northern China, benefiting from the integration of ports in Shandong Province. The company is expected to gain from the collaborative development framework established by the provincial government, which positions Qingdao Port as the leading entity [6][29]. Future Outlook - The forecasted net profit attributable to shareholders for 2024, 2025, and 2026 is expected to be 5.47 billion yuan, 5.65 billion yuan, and 6.09 billion yuan, respectively, with corresponding price-to-earnings ratios of 10.5, 10.2, and 9.4 [6].