Highton Development(SH:603162) Hua Yuan Zheng Quan·2024-11-07 07:14Investment Rating - The report assigns an "Accumulate" rating to the company, marking its first coverage [2]. Core Views - Haitong Development, as a leading private dry bulk shipping company, is expected to continue expanding its fleet at a low cost, benefiting from the recovery in the dry bulk shipping market, which highlights its growth potential [3][5]. - The company is projected to achieve significant growth in net profit from 518 million RMB in 2024 to 922 million RMB in 2026, reflecting a strong rebound in the dry bulk shipping sector [3]. Summary by Sections Financial Performance and Valuation - Revenue projections for Haitong Development are as follows: 1,705 million RMB in 2023, increasing to 3,406 million RMB in 2024, with a year-on-year growth rate of 99.72% [2]. - The net profit attributable to shareholders is expected to rise from 185 million RMB in 2023 to 518 million RMB in 2024, with a significant year-on-year growth of 180.15% [2]. - The company's earnings per share (EPS) is forecasted to increase from 0.20 RMB in 2023 to 0.57 RMB in 2024 [2]. Key Assumptions - The report anticipates that the company's charter business will see revenue growth from 10.96 billion RMB in 2024 to 14.61 billion RMB in 2026, with net profit projections of 0.06 billion RMB in 2024 and 0.31 billion RMB in 2026 [4]. - For the period of 2024 to 2026, the report expects the revenue from the company's foreign trade business to grow significantly, with projections of 20.59 billion RMB in 2024 and 36.54 billion RMB in 2026 [4]. Investment Logic - The report emphasizes that the recovery in the dry bulk shipping market, driven by the timely renewal of fleets and environmental regulations, positions Haitong Development for strong future performance [5][20]. - The company is noted for its excellent cost control capabilities and strategic fleet expansion, which are expected to enhance profitability [16]. Market Outlook - The dry bulk shipping market is anticipated to recover, supported by a combination of increased demand from domestic policies and the easing of monetary policies by the Federal Reserve, which is expected to stimulate demand for bulk commodities [21][25]. - The report highlights that the supply side is constrained by environmental regulations and the aging fleet, which will likely drive freight rates upward [21][27].