Investment Rating - The report assigns a "Buy" rating for China Ship Leasing (3877) [4]. Core Views - The company benefits from the rising oil transportation market, and its dividend payout ratio is expected to increase [3]. - The company is the first shipyard-based leasing company in Greater China, backed by China Shipbuilding Group, which provides a long-term competitive advantage [3][8]. - The company has established a cost advantage through counter-cyclical shipbuilding and is expected to enjoy asset appreciation and operational profitability during favorable market conditions [3][8]. Summary by Sections 1. Counter-Cyclical Shipbuilding Establishes Long-Term Cost Advantages - China Ship Leasing has a strong foundation in counter-cyclical shipbuilding, which has created a long-term cost advantage [8]. - The company focuses on optimizing its fleet structure, maintaining a young fleet with an average age of only 3.8 years, which minimizes environmental regulatory risks [19][20]. - The fleet consists of 155 vessels, with 124 in operation and 31 under construction, indicating a compound annual growth rate of 15% since its listing [15][19]. 2. Pro-Cyclical Operations Enhance Asset Appreciation and Profitability - The shipping industry has seen a gradual recovery since 2020, with significant increases in asset prices and charter rates, particularly in the oil transportation sector [24][25]. - The company has actively engaged in short-term and spot operations, which have contributed approximately 30% to net profit, showcasing the profitability elasticity of the leasing industry [24][33]. - The oil transportation market is expected to continue its upward trend, with the company poised to benefit from this sustained growth [35][41]. 3. Cautious Ordering Expected in the Coming Years, Dividend Payout Ratio Likely to Increase - The company has slowed its order pace since 2022 due to tightening shipyard capacity and high ship prices, leading to a cautious approach in new orders [3][41]. - The dividend payout ratio has been decreasing since the company's listing, but it is anticipated to increase as the company delivers its existing orders and maintains a cautious ordering strategy [3][41]. - The projected PE ratio for 2024 is 4.2, with an expected dividend yield of 9%, which could rise to 13% if the payout ratio increases from 36% to 50% [3][41]. 4. Profit Forecast and Valuation - The forecasted net profit for the company is expected to be HKD 2 billion, HKD 2.2 billion, and HKD 2.4 billion for the years 2023, 2024, and 2025 respectively [3][6]. - The company's revenue is projected to grow from HKD 4.488 billion in 2023 to HKD 4.802 billion in 2024, before slightly declining to HKD 4.590 billion in 2025 [6].
中国船舶租赁首次覆盖：受益油运景气上升，分红率或有望提升