Guolian Securities·2024-03-12 16:00Investment Rating - The report assigns a "Buy" rating for the company with a target price of 19.75 CNY, based on a 2.5x PB valuation for 2024 [9][15]. Core Views - The company is a global leader in energy shipping, with stable profitability from domestic oil and LNG operations, providing a safety net for earnings. The external oil shipping business is expected to benefit from demand elasticity due to future supply constraints, with VLCC rates likely to rise, offering significant upside potential for earnings [2][12]. Summary by Sections 1. Global Energy Shipping Leader - The company operates the largest fleet of oil tankers globally, with a total capacity of 22.74 million deadweight tons, including 52 VLCCs. As of September 30, 2023, the company has 155 oil tankers in operation [3][22]. - In the first three quarters of 2023, the company achieved a revenue of 16.535 billion CNY, a year-on-year increase of 33.4%, and a net profit of 3.714 billion CNY, up 480% year-on-year [4][24]. 2. External Oil Shipping: Demand May Exceed Expectations - The external oil shipping business is primarily influenced by market rates. Global oil shipping capacity is expected to grow only by 0.6% in 2024, while demand is anticipated to rebound due to economic recovery and inventory replenishment, potentially leading to higher rates [4][34]. - The gross profit from crude oil transportation in the first three quarters of 2023 reached 2.024 billion CNY, a year-on-year increase of 580% [4][32]. 3. Domestic Oil Shipping: Leading Position and Stable Contribution - The domestic oil shipping segment has stable rates and is expected to see steady demand growth. The company holds a leading position in the domestic crude and refined oil transportation market, maintaining a stable cargo source ratio of over 90% [5][24]. - The gross profit from domestic oil shipping has consistently exceeded 1.2 billion CNY annually from 2019 to 2022 [5][32]. 4. LNG Shipping: Long-term Contracts Stabilize Earnings - The LNG shipping business is supported by long-term contracts with project partners, ensuring stable rental income and investment returns. The average gross profit margin from 2017 to 2022 was 53.9% [6][12]. - The company expects the LNG segment to contribute a net profit of 800 to 1.1 billion CNY from 2023 to 2025 as the fleet expands [6][15]. 5. Profit Forecast, Valuation, and Rating - Revenue projections for 2023-2025 are 22.59 billion CNY, 25.99 billion CNY, and 28.93 billion CNY, representing year-on-year growth rates of 21.1%, 15.1%, and 11.3%, respectively. The net profit is forecasted to be 3.64 billion CNY, 6.04 billion CNY, and 6.91 billion CNY, with a CAGR of 68% over three years [7][15]. - The report utilizes a PB valuation method due to the cyclical nature of the industry, leading to a target price of 19.75 CNY based on a 2.5x PB for 2024 [15][19].