Sinotrans (601598) Investment Value Analysis Report-Logistics giant from “big” to “strong”
The short-term negative growth of foreign trade, 青岛夜网 the company’s performance under pressure, and then if foreign trade warms and the RMB depreciation cycle progresses to an end, performance will return to growth.
The company’s freight forwarding business ranks second in the world, but its profitability will greatly exceed that of foreign leaders. In the future, the company will enhance its profitability by deep cultivation of high-quality customers and extending the value chain.
At the same time, the company’s 50% stake in Sinotrans DHL’s ROE is as high as 80%, which contributes 40% of the company’s total profit, and it will continue to grow steadily.
Covered for the first time, giving A shares and Hong Kong stocks an “overweight” rating.
The company’s domestic logistics comprehensive strength is first, and freight forwarding is second in the world.
Sinotrans’ main 深圳spa会所 military cargo agency, professional logistics, warehousing terminal and other businesses have 2018 revenues of 62% / 26% / 3% and operating profits of 44% / 27% / 15%.
In recent years, the company has continued to promote asset integration. Through the parent company’s high-quality asset injection, 5.5 billion US dollars in mergers and acquisitions of China Merchants Logistics, exchange of shares to absorb the development of foreign transportation, etc., resource integration has been achieved, and its strength has been enhanced.
The company ranks first among the top 100 logistics companies in the country, and ranks second in the world in freight forwarding business (the domestic market share of maritime freight forwarding has increased in the past 5 years 2).
6 to 10 pieces.
4%), CAGR of revenue / deduction of non-net profit for the last 5 years is 10% / 3.
The company’s performance is affected by domestic economic and foreign trade fluctuations, and it is expected to enter a period of high-quality growth with improved profitability in the future.
The company’s international freight forwarding and professional logistics business volume is susceptible to foreign trade and domestic economic fluctuations.
Affected by the pressure of the macroeconomic growth rate, Q3’s ocean freight forwarder / contract logistics business volume also decreased by 0.
8% / 11.
The company’s freight forwarding operating margin is only 2.
4%, significantly lower than the foreign freight forwarder Dexun (4.
9%) and DSV (10.
We believe that the company will increase profitability and promote high-quality growth by increasing the proportion of direct customers (currently 46%), providing multi-product service portfolios and end-to-end supply chain services to core customers, reducing costs and increasing efficiency.
Sinotrans DHL’s 50% equity is the company’s core cash cow asset, and its investment income accounts for about 40% of the company’s net profit.
In the past few years, the company’s investment income from Sinotrans DHL (the company holds 50% of the shares) accounted for 40% of the company’s non-net profit.
50%, excluding the investment income, the company deducts non-net interest rate less than 1%.
SINOTRANS DHL’s major military international aging business parts were delivered. In 2018, its revenue / net profit was 12.7 billion / 21 trillion, with a net profit rate of up to 18% and outstanding profitability.
Sinotrans DHL’s 50% equity is highly profitable for Sinotrans, a core asset of cash cows. Sinotrans DHL’s 2018 ROE / cash dividend ratios were as high as 81% / 86%, and its revenue / net profit CAGR in the past 5 years were 7.
8% / 9.
The company’s current estimate is significantly lower than overseas leaders, and the expected improvement in future profitability drives the estimated repair.
1) In terms of horizontal comparison, overseas freight forwarders’ PEs are estimated to be more than 20 times the hub, while the company ‘s dynamic PE is only 12 times. 2) Historically, the company ‘s “predecessor” Sinotrans ‘s PE hub has been 14 times in the past 3 years, higher thanSinotrans total valuation; 3) Segment evaluation, the company will be evaluated in accordance with Sinotrans DHL shares and its own business segment. Since Sinotrans DHL is a highly profitable cash cow asset, 20 times PE will be given; the company’s own business will be based on 0.
8 times the conservative estimate of PB (the company’s current book value of more than 10 million square meters of land is significantly lower than the actual value), the company’s reasonable city value of 43 billion US dollars, exceeding the current market value of 31.3 billion, is expected to increase in the future.
Risk factors: Declining macroeconomic growth, foreign exchange rate; diminishing currency value; reduction in container shipping prices Investment suggestions: Although the pressure on foreign trade has caused the company’s performance to improve rapidly and the industry dividend period has passed, we are optimisticThe future recovery and improvement of the company’s profitability will drive the company from “big” to “strong”.
The company’s 2019/20/21 EPS is expected to be 0.
43 yuan, corresponding PE is 12/11/9 times, the first coverage, giving the company “overweight” grade, the company’s current Hong Kong stock is only 5 PE.
8 times, dynamic index rate 6.
2%, must be attractive, give Hong Kong stocks an “overweight” rating.