NJTC(601975) Hua Yuan Zheng Quan·2024-12-19 03:17Investment Rating - The report assigns an "Accumulate" rating for the company, citing the sustained prosperity of refined oil transportation and potential cyclical dividends for shareholders [2][4][8]. Core Views - The company, China Merchants Nanjing Tanker Corporation, is a leader in refined oil transportation in the Far East, with a diversified business model that includes oil, chemical, and gas transportation. It has the largest MR refined oil fleet in the region and ranks second in domestic crude oil transportation [2][4][8]. - The report highlights that supply constraints are expected to support the continued prosperity of refined oil transportation, driven by geopolitical factors and an aging fleet that limits supply growth [2][4][8]. Summary by Sections Company Overview - China Merchants Nanjing Tanker Corporation has transitioned from inland river oil transportation to maritime oil transportation since 2007 and has become a subsidiary of China Merchants Group, which provides strong backing [24][40]. - The company operates a diversified business model focusing on liquid cargo transportation, including crude oil, refined oil, chemicals, and gas, enhancing its core competitiveness and risk resilience [40][41]. Market Conditions - The refined oil transportation market is experiencing sustained demand due to geopolitical tensions, particularly the ongoing Red Sea situation, which has increased transportation times and costs, thereby boosting demand for shipping capacity [92][94]. - The report anticipates that the demand for refined oil transportation will continue to grow, supported by increased oil demand and refining capacity, particularly in the Asia-Pacific region [81][85]. Financial Projections - The company is projected to achieve net profits of 2.102 billion, 2.193 billion, and 2.245 billion RMB for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 35.00%, 4.31%, and 2.40% [4][8]. - The report indicates that the company's earnings per share (EPS) will correspond to price-to-earnings (P/E) ratios of 7.13, 6.83, and 6.67 for the years 2024, 2025, and 2026, respectively [4][8]. Supply and Demand Dynamics - The report notes that the aging fleet poses a significant challenge to supply growth, with a substantial portion of the fleet being over 15 years old, which is expected to limit new supply from replacing older vessels [76][77]. - The global refining capacity is shifting eastward, which is expected to benefit long-distance maritime transportation demand, as longer shipping routes will be required [81][85]. Investment Logic - The company is well-positioned to benefit from cyclical dividends as the refined oil transportation market remains robust. The report suggests that the company could potentially distribute dividends of around 1 billion RMB annually, corresponding to a dividend yield of approximately 6% [8][55].