NJTC(SH:601975) Huachuang Securities·2024-08-21 08:39Investment Rating - The report maintains a "Recommended" investment rating for the company, with a target price of 4.5 CNY, representing a potential upside of 49% from the current price of 3.02 CNY [1][2]. Core Insights - The company's net profit attributable to shareholders for the first half of 2024 reached 1.22 billion CNY, a year-on-year increase of 44.8%. The second quarter net profit was 550 million CNY, up 25.7% year-on-year but down 18.2% quarter-on-quarter [1]. - Revenue for the first half of 2024 was 3.53 billion CNY, reflecting an 11.8% year-on-year growth. The second quarter revenue was 1.69 billion CNY, showing a 9.8% year-on-year increase but an 8.1% decrease quarter-on-quarter [1]. - The company disposed of three old vessels in the first half of 2024, generating asset disposal gains of 210 million CNY, with 72 million CNY in the second quarter [1]. - The report highlights that the product tanker market remains in a favorable cycle due to geopolitical tensions and manageable supply levels, which support demand growth [1]. Financial Performance Summary - Net Profit: 2024H1 net profit was 1.22 billion CNY, with a 44.8% increase year-on-year. The second quarter net profit was 550 million CNY, a 25.7% increase year-on-year [1][4]. - Revenue: 2024H1 revenue was 3.53 billion CNY, up 11.8% year-on-year. The second quarter revenue was 1.69 billion CNY, reflecting a 9.8% year-on-year increase [1][4]. - Cost and Expenses: The total expense ratio for 2024H1 was 1.5%, down 0.56 percentage points year-on-year, primarily due to a decrease in financial expenses [1][4]. - Earnings Forecast: The report adjusts the profit forecast for 2024-2026, estimating net profits of 2.16 billion CNY, 2.30 billion CNY, and 2.40 billion CNY respectively [1][6]. Market and Pricing Insights - Freight Rate Index: The average MR-TCE for Q1 2024 was approximately 35,000 USD/day, a year-on-year increase of 11.6%. For Q2 2024, it remained around 35,000 USD/day, reflecting a 26% year-on-year increase [1][4]. - Supply and Demand Dynamics: The report notes that geopolitical factors and the aging fleet are expected to drive demand for tanker services, while new capacity additions remain controlled [1][4].