CMES(SH:601872) GF SECURITIES·2024-04-09 16:00Investment Rating - The report assigns a "Buy" rating to the company [3]. Core Views - The company reported a revenue of 25.881 billion yuan in 2023, a year-on-year decrease of 12.88%, and a net profit attributable to shareholders of 4.837 billion yuan, down 4.92% year-on-year. The company has increased its dividend payout ratio to over 40% [2][9]. - The shipping industry is experiencing a divergence in performance, with oil and LNG sectors maintaining high demand while bulk and container shipping remain sluggish. The average Clarkson shipping index for 2023 was 23,629 USD/day, down 37% year-on-year, but still 33% above the 10-year average. The company managed to outperform the market through excellent operations and fleet configuration [2][12]. - The oil and bulk shipping sectors are expected to improve under supply constraints, driven by the aging fleet and increasing environmental regulations. The company is expanding its fleet to enhance future performance, having received one VLCC and signed contracts for two Aframax tankers and two Kamsarmax bulk carriers during the reporting period [2][12]. - The company is expected to enhance shareholder returns, supported by a government initiative to improve the quality of state-owned enterprises and strengthen investor returns [2][21]. - Profit forecasts indicate that the company will achieve net profits of 6.4 billion, 8.4 billion, and 9.1 billion yuan from 2024 to 2026. Given the company's strong operational capabilities and governance, a 12x PE ratio is applied for 2024, resulting in a target price of 9.42 yuan per share [2][22]. Summary by Sections Performance and Dividend - The company's performance in 2023 met expectations, with a revenue of 25.881 billion yuan and a net profit of 4.837 billion yuan, alongside an increased dividend payout ratio exceeding 40% [9][12]. Industry Trends - The oil shipping sector is expected to see tightening supply conditions, with significant issues related to aging vessels and insufficient new orders. Environmental regulations are also becoming stricter, impacting fleet compliance [12][21]. - The bulk shipping sector is anticipated to recover starting in 2024, with potential demand boosts from projects like the West Mangdu project expected to come online in 2025 [17][20]. Profit Forecast and Investment Advice - The company is projected to achieve net profits of 6.4 billion, 8.4 billion, and 9.1 billion yuan from 2024 to 2026, with a target price of 9.42 yuan per share based on a 12x PE ratio for 2024 [22][40].