COSCO SHIP HOLD(601919) 国信证券·2024-03-30 16:00Investment Rating - The investment rating for COSCO SHIPPING Holdings (601919.SH) is "Buy" [1][3][13]. Core Views - COSCO SHIPPING Holdings has demonstrated a strong commitment to returning value to shareholders through significant dividends and share buybacks, with a total cash dividend of approximately RMB 118.66 billion for 2023, representing about 50% of the net profit attributable to shareholders [1][6]. - The company reported a revenue of RMB 1754.5 billion in 2023, a decrease of 55.1% year-on-year, and a net profit of RMB 237.5 billion, down 78.2% year-on-year. The fourth quarter alone saw a revenue of RMB 408.9 billion, down 45.1% year-on-year, with a net profit of RMB 17.7 billion, down 85.5% [1][6]. - Despite a stable cargo volume of 24.4 million TEU in 2023, the average revenue per container significantly declined, with foreign trade routes averaging only USD 1055.1 per TEU, a drop of approximately 60% compared to 2022 [1][8]. - The report anticipates a marginal improvement in 2024 due to the tightening of supply in the Red Sea region, which could boost demand by approximately 9% across the industry [1][11]. - The Federal Reserve is expected to initiate interest rate cuts in June, which may stimulate consumer activity and set the stage for increased demand during the peak season [1][11]. Summary by Sections Financial Performance - In 2023, COSCO SHIPPING Holdings achieved a revenue of RMB 1754.5 billion, down 55.1% from the previous year, and a net profit of RMB 237.5 billion, down 78.2% [1][4]. - The company plans to distribute a total cash dividend of approximately RMB 118.66 billion for 2023, which is about 50% of the net profit attributable to shareholders [1][6]. - The cargo volume for 2023 was 24.4 million TEU, a decrease of 3.5% year-on-year, with significant declines in average revenue per container [1][8]. Market Outlook - The global economic environment in 2023 was weak, leading to a decline in freight rates. However, the situation in the Red Sea may lead to a recovery in 2024 [1][11]. - The anticipated interest rate cuts by the Federal Reserve could enhance consumer spending and inventory replenishment, potentially benefiting demand in the shipping sector [1][11]. Earnings Forecast - The earnings forecast for 2024 has been revised upward from RMB 276.5 billion to RMB 291.0 billion, while the forecast for 2025 has been adjusted downward from RMB 313.5 billion to RMB 295.8 billion [1][13]. - The projected earnings for 2026 are estimated at RMB 307.3 billion, with corresponding PE ratios of 5.7, 5.6, and 5.4 for 2024, 2025, and 2026 respectively [1][4][13].