COSCO SHIP HOLD(601919) 兴业证券·2024-03-30 16:00Investment Rating - The report maintains a "Buy" rating for the company, suggesting a potential upside of more than 15% relative to the relevant market index [6] Core Views - The company's net profit attributable to the parent company declined significantly in 2023, with a year-on-year decrease of 78.25% to RMB 23.86 billion [1] - The container shipping market entered a downward cycle in 2023, leading to a 56.22% decline in the company's container shipping revenue to RMB 168.126 billion [1] - The company actively engaged in share buybacks and dividend distributions, repurchasing approximately 215 million A-shares and H-shares by the end of February 2024 and proposing a final cash dividend of RMB 0.23 per share for 2023 [2] Financial Performance - The company's revenue in 2023 was RMB 175.448 billion, a year-on-year decrease of 55.14% [1] - Gross margin for 2023 was 16.4%, with a projected increase to 17.7% in 2024E before declining to 6.3% by 2026E [2] - ROE for 2023 was 12.2%, expected to decrease to 3.3% by 2026E [2] Market and Industry Analysis - The global container shipping market faced challenges in 2023 due to high inflation and low growth, leading to a contraction in demand and increased supply from new vessel deliveries [1] - The Red Sea tensions in late 2023 caused a temporary tightening of supply and a rebound in freight rates [1] Shareholder Returns - The company distributed a total of RMB 11.866 billion in cash dividends for 2023, representing approximately 50% of the net profit attributable to shareholders [2] - The proposed final cash dividend of RMB 0.23 per share for 2023, combined with the interim dividend, results in a total dividend payout ratio of 50% [2] Valuation Metrics - The company's PE ratio for 2023 was 6.9x, expected to increase to 22.5x by 2026E [2] - PB ratio remained stable at 0.8x from 2023 to 2025E, with a slight decrease to 0.7x in 2026E [4]