Microsoft Word - Sinotrans Shipping_MAR_23_2011_CHI.doc

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1 : Sinotrans Shipping (00368 HK) 公司报告 : 中外运航运 (00368 HK) High Industry Risks Ahead, But Deeply Undervalued 未来行业风险高企, 但公司价值被过分低估 Serena Li 李雯 liwen@gtjas.com 15 March 2011 GTJA Research 国泰君安研究 FY10 net profit grew by 19.9% yoy, a bit better than expected. The Company s FY10 revenue increased 21.6% yoy to US$278 million. Net profit recorded at US$128 million, representing EPS of US3.19 cents and up 19.9% yoy. FY10 earning is 5.0% and 6.6%, respectively, higher than our estimate and the market consensus, mainly because of the gain on disposal of dry bulk vessel. Core earning is almost in line. The Company proposed a final dividend of HK6 cents per share. 53.0% and 14.7% of FY11-FY12 operation days are secured. As at the end of 2010, 53.0% and 14.7% of FY11-FY12 operation days were secured at estimated average daily charter hire rate of around US$18,000 and more than US$20,000. Depreciation will keep increasing with more new deliveries, leading to decrease in gross margin. But since the Company s breakeven point of the operated fleet is low, we estimate FY11 gross margin would remain above 35%, which is still higher than peers. Potential asset acquisition from the parent company is still waiting for a good timing. Rating: Buy Maintained 评级 : 买入 ( 维持 ) 6-18m TP 目标价 : HK$3.50 Revised from 原目标价 : HK$4.10 Share price 股价 : Stock performance 股价表现 % of return HK$2.570 Deeply undervalued, maintain Buy. Due to weak BDI performance, we decrease 11-12EPS to US$0.026 and US$0.030, and introduce 13EPS of US$ The stock is now only traded at 0.6x 10PB, or 1.0x net cash plus a discount of 57% to NBV of the operated fleet, deeply undervalued compared to peers. Maintain Buy, but due to lower earning estimates, revise down TP to HK$3.50 (36% upside potential), representing 0.8x 11PB, or 1.0x net cash plus 0.8x NBV of the fleet 年纯利同比增长 19.9%, 略好于预期 公司 2010 年收入同比升 21.6% 至 2.78 亿美元, 录得纯利约 1.28 亿美元, 对应每股盈利 3.19 美仙, 同比增长 19.9% 2010 年业绩分别好于我们和市场平均预期 5.0% 和 6.6%, 主要由于散货船出售收益 核心盈利基本符合预期 公司建议派发末期股息每股 6 港仙 年运营天数已分别锁定 53.0% 和 14.7% 截至 2010 年底, 公司已分别锁定了现有船队在 2011 年和 2012 年运营天数的 53.0% 和 14.7%, 估计平均日租金分别为 US$18,000 左右和高于 US$20,000 随着未来更多的新船交付, 预期公司折旧继续上升, 致使毛利率进一步下降 但由于船队保本点较低, 预计 11 年毛利率仍可保持 35% 以上, 依然高于同业 面向母公司的潜在收购仍在等待市场时机 公司价值被过分低估, 维持买入 由于 BDI 表现不佳, 下调 年每股盈利预测至 US$0.026 和 US$0.030, 并首次预测 2013 年每股盈利为 US$0.033 公司当前股价仅为 0.6x 10PB, 或相当于 1.0 倍净现金加上对公司船队净资产折让 57%, 相对同业已过分低估 维持评级 买入, 但由于盈利预测下调, 目标价相应调低至 3.50 港元 (36% 潜在上升空间 ), 相当于 0.8 倍 11PB, 或 1.0 倍净现金加上 0.8 倍的船队净资产 (20.0) Mar-09 Jun-09 Oct-09 Jan-10 Apr-10 Aug-10 Nov-10 Mar-11 HSI Change in Share Price 股价变动 1 M 1 个月 Sinotrans Shipping 3 M 3 个月 1 Y 1 年 Abs. % 绝对变动 % (10.5) (12.6) (33.4) Rel. % to HS index 相对恒指变动 % (9.5) (11.3) (41.0) Avg. share price(hk$) 平均股价 ( 港元 ) Source: Bloomberg, Guotai Junan International 此公司报告由翻译员佘立东所翻译. Year End 年结 Turnover 收入 Net Profit 股东净利 EPS 每股净利 EPS 每股净利变动 PER 市盈率 BPS 每股净资产 PBR 市净率 DPS 每股股息 Yield 股息率 ROE 净资产收益率 12/31 (USD m) (USD m) (USD) ( %) (x) (USD) (x) (USD) (%) (%) 2009A (69.4) A F (18.2) F F Shares in issue (m) 总股数 (m) 3,992.1 Major shareholder 大股东 Sinotrans Group 68.1% Market cap. (HK$ m) 市值 (HK$ m) 10,259.7 Free float (%) 自由流通比率 (%) month average vol. 3 个月平均成交股数 ( 000) 3,303.1 FY11 Net gearing (%) FY11 净负债 / 股东资金 (%) Net Cash 52 Weeks high/low (HK$) 52 周高 / 低 / FY11 Est. NAV (HK$) FY11 每股估值 ( 港元 ) 4.0 Source.. the Company, Guotai Junan International. See the last page for disclaimer Page 1 of 7

2 2010 年纯利同比增长 19.9%, 略好于预期 公司 2010 年收入同比升 21.6% 至 2.78 亿美元, 录得纯利约 1.28 亿美元, 对应每股盈利 3.19 美仙, 同比增长 19.9% 2010 年业绩分别好于我们和市场平均预期 5.0% 和 6.6%, 主要由于散货船出售收益达到 1,653 万美元 核心盈利基本符合预期 公司建议派发末期股息每股 0.77 美仙, 或相当于每股 6 港仙 连同中期股息,2010 年的派息比率达到 32.14% 2010 年下半年毛利率环比下跌 2010 年下半年, 波罗的海干散货运价指数 (BDI) 均值环比下半年下跌 25.5%, 但即期运费的变动一般对公司的盈利有滞后效应, 因为公司业务基于的合同由长期和短期租船合同所组成 2010 年, 公司自有干散货船队的日均期租租约对等比率 (TCE) 同比轻微上升 1.5% 至 19,332 美元, 符合预期 虽然 2010 年下半年的 BDI 表现相比上半年较弱, 公司全年的毛利率和净利率仍能分别维持在 41.3% 和 45.8% 的高水平 这主要受惠于公司的经营模式及低的实际所得税税率 我们测算 2010 年下半年的毛利率环比下半年仅轻微下降 2.1 个百分点至 40.3% 同时, 油轮的日均 TCE 为 37,737 美元, 同比上升 59.0%, 而集装箱船的日均 TCE 为 5,642 美元, 同比下跌 9.1% 油轮和集装箱船对于公司的盈利贡献很低 干散货船为公司贡献最大部分的盈利, 占总收入约 88% 以及总经营利润逾 95% 随着未来更多的新船交付, 预期公司折旧继续上升, 致使毛利率进一步下降 年, 我们预期公司的毛利率将继续降至低于 40%, 但应可维持在 35% 以上, 仍然远高于同业 图 -1: 历史收入构成 US$ million Dry bulk shipping Container shipping Oil tanker shipping Others 图 -2: 历史经营利润构成 US$ million 350 资料来源 : 公司. 资料来源 : : 公司 Dry bulk shipping Container shipping Oil tanker shipping Others 表 -1: 公司毛利率的变动 09 年 09 年环比变化 10 年 10 年环比变化同比变化 09 年 10 年上半年下半年 ( 百分点 ) 上半年下半年 ( 百分点 ) ( 百分点 ) 毛利率 (%) 净利率 (%) 资料来源 : 公司, 国泰君安国际. 公司船队保本点仍然较低 截至 2010 年底, 公司经营着一支拥有 35 艘船舶的自有干散货船队, 总运载能力达 225 万载重吨, 以及 10 艘集装箱船和 1 艘双壳超大型油轮 2010 年, 公司接收了 7 艘新的干散货船, 对应运力约 700,000 载重吨, 包括 4 艘好望角型货船和 3 艘小灵便型货船, 以及出售了 1 艘巴拿马型货船 新船舶交付后, 公司现有船队的保本点预计上升至约每天 9,100 美元 截至 2010 年底, 公司仍有 7 艘新的干散货船订单, 包括 2 艘好望角型货船 4 艘巴拿马型货船和 1 艘小灵便型货船 新船交付计划从 2011 年至 2012 年初 至 2012 年初, 公司的干散货船队的总运载能力将提升至 335 万载重吨, 相比 2010 年底提升约 50% 管理层曾表示, 公司的新船造价低于目前市场造价 就好望角型货船 巴拿马型货船和小灵便型货船而言, 公司新船的平均保本点分别预计为 17,000-18,000 美元, 低于 12,000 美元和约 9,000-10,000 美元 See the last page for disclaimer Page 2 of 7

3 年运营天数已分别锁定 53.0% 和 14.7% 截至 2010 年底, 公司已分别锁定了现有船队在 2011 年和 2012 年运营天数 53.0% 和 14.7% 预计 2011 年锁定的平均日租金下跌至 18,000 美元左右, 但依然远高于现有船队的保本点约每天 9,100 美元 预计 2012 年锁定的运营天数合同租金超过每天 20,000 美元, 但我们相信这应该主要是来自好望角型船舶 鉴于 2011 年 1 季度 BDI 下跌以及随着更多的灵便型散货船 ( 其建造价格远低于好望角型船舶 ) 在随后签下合同, 我们预期 2012 年其余更多锁定的运营天数的合同租金将低于上述金额 2011 年 1 季度,BDI 表现不佳, 尽管最近一个月该指数显著反弹 根据截至 2011 年 3 月 14 日波罗的海交易所数据, 好望角型 巴拿马型 大灵便型和小灵便型船舶的平均日租金分别为 10,845 美元 17,070 美元 16,034 美元和 11,010 美元 目前, 好望角型船舶的市场平均日租金甚至低于巴拿马型和小灵便型船舶的租金, 也低于公司新好望角型船舶的保本点 但巴拿马型和小灵便型船舶的市场租金目前仍然高于公司相应船舶的保本点 幸运的是, 公司 2010 年交付的 4 艘新好望角型船舶此前已获得合同并锁定利润, 管理层表示计划 2011 年交付的另外两艘新好望角型船舶目前也已经取得合同 因此, 好望角型船舶目前低迷的市场租金水平可能不会明显影响公司的现有船队 在所有干散货船舶类型中, 好望角型未来将面对的供给过剩之挑战最大, 但我们认为其市场费率不应该长期如此低, 特别是在澳洲水灾后以及日本地震重建工作开始以后 图 -3: 波罗的海干散货运价指数 (BDI) 的表现 12,000 BDI BDI Yearly Av g. 10,000 8,000 6,000 4,000 2, ,510 3,371 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 资料来源 : 彭博, 国泰君安国际. 数据截至 2011 年 3 月 14 日. 图 -4: 公司目前散货船的保本点和锁定合同价 USD/day 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 3, av g. daily TCE Av g. charter hire rate for 14.7% of FY12 operation day s Av g. charter hire rate for 53.0% of FY11 operation day s Breakev en point f or exsiting f leet 7,070 6,399 2,617 2,758 图 -5: 当前市场租金和公司的新船订单成本 USD/ day 资料来源 : 公司, 国泰君安国际. 资料来源 : 公司, 彭博, 国泰君安国际. 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 市价截至 2011 年 3 月 14 日. YTD 1,316 Latest av g. market charter hire rate f or Capesize Av erage cost f or Capesize orderbook Latest av g. market charter hire rate f or Handysize Av erage cost f or Handy size orderbook Latest av g. market charter hire rate f or Panamax Av erage cost f or Panamax orderbook See the last page for disclaimer Page 3 of 7

4 未来将出售油轮, 以避免与姐妹公司长航油运 ( CH) 之间的竞争 为了避免长航油运 ( CH) 和公司旗下合营公司的油轮业务之间的竞争, 中外运航运去年底已从其合营公司处收购了油轮, 总代价达到 1 亿美元 目前公司只拥有一艘双壳超大型油轮,2010 年录得 230 万美元的经营亏损 亏损主因是由于购买价格低于净账面值, 由此分担了 370 万美元的油轮减值亏损 公司管理层表示油运业务实际上已于去年恢复盈利 ( 剔除减值亏损影响 ) 同时, 今年初公司和同系附属公司签订了一份租船协议, 按日租 25,800 美元的价格, 每月供款的形式, 向该公司出租上述油轮, 为期五年 至租船协议期满, 承租人将以 8,000 万美元的代价收购该油轮 此合同费率预示着 2011 年该油轮的日均 TCE 相比 2010 年的日均费率将下跌约 30%, 但未来该费率将获得锁定并将持续五年, 可为公司提供稳定收入 出售此船舶后, 公司未来将不再涉及油运业务 与另一家姐妹公司长航凤凰 ( CH) 之间的竞争仍然存在 除了与长航油运 ( CH) 之间的内部竞争, 中外运航运也存在与另一姐妹公司长航凤凰 ( CH) 之间的竞争, 该姐妹公司主要从事于国内长江流域的干散货运输, 但也有一些国际航运的船舶 中外运航运将有可能整合长航凤凰 ( CH) 的资产, 以免去未来的内部竞争 我们认为最简单的方式是, 中外运航运向长航凤凰 ( CH) 收购其国际干散货船舶, 那么两家公司将可以在不同市场内经营干散货航运业务并且免去互相竞争 目前该姐妹公司的盈利能力逊于中外运航运, 我们并不认为中外运航运适合在当前去收购该公司 与管理层沟通后, 我们相信公司也倾向于将国际和国内业务划分给两家公司独立经营 也就是说, 我们认为中外运航运收购长航凤凰 ( CH) 的机会很低 然而, 中外运航运未来仍有可能向姐妹公司收购旗下的国际干散货船舶 在整合长航凤凰 ( CH) 的相关资产以前, 预期公司可能会先进行收购中国租船公司, 此潜在收购自公司上市时已有所谈及 面向母公司的潜在资产收购仍在等待市场时机 公司拟向母公司收购中国租船公司的事宜已计划已久 中国租船公司 2009 年收入估计大概约人民币 50 亿元, 而净利约人民币 2-3 亿元 中国租船公司的毛利率远低于公司目前的业务, 因为其业务是先租入船舶再进行转租 如果未来公司收购中国租船公司, 我们预期公司整体的毛利率将大幅下降, 但 ROE 可能提升, 因为目标公司是一家轻资产公司, 其干散货航运业务主要基于程租合约并依赖第三方提供船舶租赁 管理层曾提到, 他们可能不会同时进行对中国租船公司的收购和整合其它资产 目前收购中国租船公司的事宜仍在等待好的市场时机 由于租金费率下降, 下调 年每股盈利 25%-26% 由于 BDI 表现不佳, 我们在测算中下调所预期的日均租金费率 同时, 我们也根据公司最新的订单时间表调整了未来经营运力 由于折旧上升和租金价格下调, 分别下调 年每股盈利 25.7% 和 25.3% 至 美元和 美元, 并预测 13 年每股盈利为 美元 表 -2: 盈利预测变动 旧预测 新预测 变动 2011F 2012F 2013F 2011F 2012F 2013F 2011F 2012F 2013F 干散货日均 TCE ( 美元 ) 19,584 21,180 n.a. 16,677 17,305 18, % -18.3% n.a. 毛利 ( 美元百万 ) n.a % -25.2% n.a. 毛利率 (%) n.a n.a. 净利 ( 美元百万 ) n.a % -25.3% n.a. 每股盈利 ( 美元 ) n.a % -25.3% n.a. 资料来源 : 国泰君安国际. See the last page for disclaimer Page 4 of 7

5 净现金相当于目前股价的 77%, 或目前股价对现有船队折让 57% 截至 2010 年 12 月 31 日, 公司的净现金达到 亿美元, 对应每股 1.97 港元, 相当于最近收市价 2.57 港元的 77% 公司目前仍有资本承担约 亿美元, 主要用作支付新船舶未来的建造费用 由于相当于该资本承担的现金金额将会转变成船舶, 我们以此金额数目调整目前的净现金, 以更准确的反映公司资产实质 从表 -3 可见, 剔除资本承担, 且未包括未来现金收入, 公司仍有 7.81 亿美元净现金, 相当于每股 1.52 港元, 可作进一步资本开支之用 剔除资本承担的每股净现金约占目前股价的 59% 根据公司数据, 截至 2010 年底, 其现有船队的净账面价值约 亿美元 经调整上述用作新船建造费用的资本承担金额, 调整后的现有船队净账面价值为 亿美元, 相当于每股 2.45 港元 目前, 公司股价为 2.57 港元 如果我们对经调整后的每股净现金 1.52 港元给予 1.0 倍 PB, 则目前 2.57 港元的股价相当于给予了公司现有船队净资产 57% 的大折让 鉴于公司的船队仍然年轻, 我们认为公司当前股价非常吸引 表 -3: 公司的净现金结余和现有船队的净账面价值截至 2010 年 12 月 31 日 美元百万 美元每股 港元每股 净现金结余 1, 资本承担 现有船队的净账面价值 1, 经调整的资本承担 经调整的净现金结余 经调整的现有船队的净账面价值 ( 包括资本承担 ) 1, 年 3 月 15 日的收市价 ( 港元 ) 股价相对于对现有船队的折让 57.4% 资料来源 : 公司, 国泰君安国际. 注 : 截至 2011 年 3 月 15 日, 假设港元 / 美元 = 表 -4: 公司的自有船队 干散货船 货船数目 运力 平均船龄 ( 年 ) 35 艘 2.25 百万 艘新建散货船 0.7 百万载重吨 0.00 集装箱船 10 艘 6,667 标箱 10.2 油轮 1 艘双壳超大型油轮 310,444 载重吨 2.70 资料来源 : 公司. 维持买入, 但由于调低盈利预测, 目标价从 4.10 港元下调至 3.50 港元 干散货航运市场未来将面对非常巨大的挑战, 但我们相信公司将受益于其强劲的资产负债表 对于一家拥有大量现金的公司比如中外运航运来说, 目前可能是其在行业低点扩张船队和为将来争取潜在增长的一个机会 公司当前股价仅为 0.6 倍 10 年 PB 和 0.6 倍 11 年 PB, 相对同业已过分低估 其每股净现金 1.97 港元相当于目前股价的 77%, 比较同业享有更安全的估值 维持 买入 评级, 但由于盈利预测下调以及干散货航运市场的高风险, 我们将目标价从 4.10 港元下调至 3.50 港元 (36% 潜在上升空间 ), 相当于 0.8 倍 11 年 PB, 或对应 11 年 NAV 3.97 港元有 12% 折让 我们 3.50 港元的目标价也相当于 1.0 倍净现金加上 0.8 倍的船队净资产 See the last page for disclaimer Page 5 of 7

6 财务报表和比率 Income Statement Balance Sheet Year end Dec (USD m) 2009A 2010A 2011F 2012F 2013F Year end Dec (USD m) 2009A 2010A 2011F 2012F 2013F - Dry bulk vessel Property Plant & Equipment 816 1,029 1,191 1,225 1,260 - Oil tanker Interest in Jointly controlled entities Container vessel Other non-current assets Other revenue Non-current Assets 1,291 1,114 1,273 1,306 1,339 - Derived by JCEs at proportional basis (12) (14) (11) (11) (11) Revenue Inventory Trade and other Receivable Cost of operations (127) (164) (177) (201) (210) Cash & Equivalents 753 1, Gross profit Other short-term assets Current Assets 784 1, ,033 SGA expenses (17) (16) (17) (18) (19) Other income Trade and other Payable Operating profit Short-Term borrowings Other Current Liabilities Net financial income/cost Current Liabilities Share of associates and JVs (1) (1) Pre-tax profit Long-Term borrowings Other non-current liabilities Tax (0.2) (0.8) (0.3) (0.4) (0.4) Non-current Liabilities After-tax profit Minority Interest Minority interests Net profit Share capital Reserves 1,982 2,074 2,122 2,180 2,267 EPS (USD) Total Shareholders' Equity 2,034 2,126 2,173 2,231 2,318 yoy (%) (69.4) 19.9 (18.2) BPS (USD) Cash Flow Statement Year end Dec (USD m) 2009A 2010A 2011F 2012F 2013F Financial Ratio 2009A 2010A 2011F 2012F 2013F Pre-tax profit Adjustments Gross margin (%) Cash from Operations Operating margin (%) Cash from Investing 13 (198) (219) (100) (100) Net margin (%) Cash from Financing (179) (36) (33) (38) (41) ROA (%) Cash and cash equivalents at 1st Jan , ROE (%) Net change in cash (22) (93) (102) Net gearing ratio (%) Net Cash Net Cash Net Cash Net Cash Net Cash effect of FX rate changes (0.0) 0.4 (0.3) Interest coverage (x) Net inst inc. Net inst inc. Net inst inc. Net inst inc. Net inst inc. Term deposits with initial term > 3 mths Current ratio(x) Cash and cash equivalents at 31st Dec 1,153 1, Quick ratio (x) 资料来源 : 公司, 国泰君安国际. See the last page for disclaimer Page 6 of 7

7 公司评级定义相对指标 : 香港恒生拍指数投资期 : 6 至 18 个月 投资评级 定义 买入相对表现 >15%; 或公司 行业基本面良好. 收集相对表现 5% to 15%; 或公司 行业基本面良好. 中性相对表现 -5% to 5%; 或公司 行业基本面中性. 减持相对表现 -5% to -15%; 或公司 行业基本面不理想. 沽出相对表现 <-15%; 或公司 行业基本面不理想. 行业评级定义相对指标 : 香港恒生拍指数投资期 : 6 至 18 个月投资评级 定义 跑赢大市相对表现 >5%; 或公司 行业基本面良好. 中性相对表现 -5% to 5%; 或公司 行业基本面中性. 跑输大市相对表现 <-5%; 或公司 行业基本面不理想. 利益披露事项 (1) 分析员或其有联系者并未担任本研究报告所评论的上市法团的高级人员 (2) 分析员或其有联系者并未持有本研究报告所评论的上市法团的任何财务权益 (3) 除晨鸣纸业 (1812) 外, 国泰君安或其集团公司并未持有本研究报告所评论的上市法团的市场资本值的 1% 以上的财务权益 (4) 国泰君安或其集团公司在现在或过去 12 个月内没有与本研究报告所评论的上市法团存在投资银行业务的关系 免责声明本研究报告内容既不代表国泰君安证券 ( 香港 ) 有限公司 ( 国泰君安 ) 的推荐意见也并不构成所涉及的个别股票的买卖或交易之要约 国泰君安或或其集团公司有可能会与本报告涉及的公司洽谈投资银行业务或其它业务 ( 例如 : 配售代理 牵头经辨人 保荐人 包销商或从事自营投资于该股票 ) 国泰君安的销售员, 交易员和其它专业人员可能会向国泰君安的客户提供与本研究部中的观点截然相反的口头或书面市场评论或交易策略 国泰君安集团的资产管理部和投资业务部可能会做出与本报告的推荐或表达的意见不一致的投资决策 报告中的资料力求准确可靠, 但国泰君安并不对该等数据的准确性和完整性作出任何承诺 报告中可能存在的一些基于对未来政治和经济的某些主观假定和判断而做出预见性陈述, 因此可能具有不确定性 投资者应明白及理解投资证券及投资产品之目的, 及当中的风险 在决定投资前, 如有需要, 投资者务必向其各自专业人士咨询并谨慎抉择 此为中文译本, 如中文与英文版本有不同之处, 内容以英文版本为准 国泰君安证券 ( 香港 ) 有限公司版权所有, 不得翻印香港中环皇后大道中 181 号新纪元广场低座 27 楼电话 (852) 传真 (852) 网址 : See the last page for disclaimer Page 7 of 7

8 : Sinotrans Shipping (00368 HK) 公司报告 : 中外运航运 (00368 HK) High Industry Risks Ahead, But Deeply Undervalued 未来行业风险高企, 但公司价值被过分低估 Serena Li 李雯 liwen@gtjas.com 15 March 2011 GTJA Research 国泰君安研究 FY10 net profit grew by 19.9% yoy, a bit better than expected. The Company s FY10 revenue increased 21.6% yoy to US$278 million. Net profit recorded at US$128 million, representing EPS of US3.19 cents and up 19.9% yoy. FY10 earning is 5.0% and 6.6%, respectively, higher than our estimate and the market consensus, mainly because of the gain on disposal of dry bulk vessel. Core earning is almost in line. The Company proposed a final dividend of HK6 cents per share. 53.0% and 14.7% of FY11-FY12 operation days are secured. As at the end of 2010, 53.0% and 14.7% of FY11-FY12 operation days were secured at estimated average daily charter hire rate of around US$18,000 and more than US$20,000. Depreciation will keep increasing with more new deliveries, leading to decrease in gross margin. But since the Company s breakeven point of the operated fleet is low, we estimate FY11 gross margin would remain above 35%, which is still higher than peers. Potential asset acquisition from the parent company is still waiting for a good timing. Rating: Buy Maintained 评级 : 买入 ( 维持 ) 6-18m TP 目标价 : HK$3.50 Revised from 原目标价 : HK$4.10 Share price 股价 : Stock performance 股价表现 % of return HK$2.570 Deeply undervalued, maintain Buy. Due to weak BDI performance, we decrease 11-12EPS to US$0.026 and US$0.030, and introduce 13EPS of US$ The stock is now only traded at 0.6x 10PB, or 1.0x net cash plus a discount of 57% to NBV of the operated fleet, deeply undervalued compared to peers. Maintain Buy, but due to lower earning estimates, revise down TP to HK$3.50 (36% upside potential), representing 0.8x 11PB, or 1.0x net cash plus 0.8x NBV of the fleet 年纯利同比增长 19.9%, 略好于预期 公司 2010 年收入同比升 21.6% 至 2.78 亿美元, 录得纯利约 1.28 亿美元, 对应每股盈利 3.19 美仙, 同比增长 19.9% 2010 年业绩分别好于我们和市场平均预期 5.0% 和 6.6%, 主要由于散货船出售收益 核心盈利基本符合预期 公司建议派发末期股息每股 6 港仙 年运营天数已分别锁定 53.0% 和 14.7% 截至 2010 年底, 公司已分别锁定了现有船队在 2011 年和 2012 年运营天数的 53.0% 和 14.7%, 估计平均日租金分别为 US$18,000 左右和高于 US$20,000 随着未来更多的新船交付, 预期公司折旧继续上升, 致使毛利率进一步下降 但由于船队保本点较低, 预计 11 年毛利率仍可保持 35% 以上, 依然高于同业 面向母公司的潜在收购仍在等待市场时机 公司价值被过分低估, 维持买入 由于 BDI 表现不佳, 下调 年每股盈利预测至 US$0.026 和 US$0.030, 并首次预测 2013 年每股盈利为 US$0.033 公司当前股价仅为 0.6x 10PB, 或相当于 1.0 倍净现金加上对公司船队净资产折让 57%, 相对同业已过分低估 维持评级 买入, 但由于盈利预测下调, 目标价相应调低至 3.50 港元 (36% 潜在上升空间 ), 相当于 0.8 倍 11PB, 或 1.0 倍净现金加上 0.8 倍的船队净资产 (20.0) Mar-09 Jun-09 Oct-09 Jan-10 Apr-10 Aug-10 Nov-10 Mar-11 HSI Change in Share Price 股价变动 1 M 1 个月 Sinotrans Shipping 3 M 3 个月 1 Y 1 年 Abs. % 绝对变动 % (10.5) (12.6) (33.4) Rel. % to HS index 相对恒指变动 % (9.5) (11.3) (41.0) Avg. share price(hk$) 平均股价 ( 港元 ) Source: Bloomberg, Guotai Junan International Year End 年结 Turnover 收入 Net Profit 股东净利 EPS 每股净利 EPS 每股净利变动 PER 市盈率 BPS 每股净资产 PBR 市净率 DPS 每股股息 Yield 股息率 ROE 净资产收益率 12/31 (USD m) (USD m) (USD) ( %) (x) (USD) (x) (USD) (%) (%) 2009A (69.4) A F (18.2) F F Shares in issue (m) 总股数 (m) 3,992.1 Major shareholder 大股东 Sinotrans Group 68.1% Market cap. (HK$ m) 市值 (HK$ m) 10,259.7 Free float (%) 自由流通比率 (%) month average vol. 3 个月平均成交股数 ( 000) 3,303.1 FY11 Net gearing (%) FY11 净负债 / 股东资金 (%) Net Cash 52 Weeks high/low (HK$) 52 周高 / 低 / FY11 Est. NAV (HK$) FY11 每股估值 ( 港元 ) 4.0 Source.. the Company, Guotai Junan International. See the last page for disclaimer Page 1 of 7

9 FY10 net profit grew by 19.9% yoy, a bit better than expected. The Company s FY10 revenue increased 21.6% yoy to US$278 million. Net profit recorded at US$128 million, representing EPS of US3.19 cents and up 19.9% yoy. FY10 earning is 5.0% and 6.6%, respectively, higher than our estimate and the market consensus, mainly because of the gain on disposal of dry bulk vessels which amounts to around US$16.53 million. Core earning is almost in line. The Company proposed a final dividend of US0.77 cents per share, equivalent to HK6 cents per share. Including the interim dividend, the FY10 dividend payout ratio is 32.14%. 23 March 2011 Profit margins decreased hoh in 2H10. BDI average declined by 25.5% hoh in 2H10, but the change in spot rate generally has lagging effect on the Company s earning, because it is based on a mix of long and short-term chartering contracts. In FY10, average TCE of the Company s self-owned dry bulk vessels slightly increased by 1.5% yoy to US$19,332, in line with expectation. Although BDI was weaker in 2H10 than in 1H10, the Company s gross margin and net margin remained as high as 41.3% and 45.8% in FY10, respectively, mainly thanks to the Company s business model and its low effective tax rate. In our calculation, the gross margin in 2H10 only slightly decreased by 2.1 pts hoh to 40.3%. Meanwhile, average daily TCE (time charter equivalent rate) for the oil tanker was US$37,737, up 59.0% yoy, and average daily charter hire rate for container vessels was US$5,642, down 9.1% yoy. Earning contributions from the oil tanker and container vessels are low to the Company, and dry bulk shipping is the largest earning contributor which accounts for around 88% of total revenue and over 95% of total operating earning. Depreciation increased due to more new deliveries as a result of the fleet expansion, leading to a decrease in profit margin. We estimate that the Company s gross margin will continue to fall below 40% in FY11-FY13, but should be able to remain above 35% which is still much higher than peers. Figure-1: Historical Revenue Breakdown Figure-2: Historical Operating Profit Breakdown Dry bulk shipping Oil tanker shipping US$ million Container shipping Others Source: the Company. Dry bulk shipping Oil tanker shipping US$ million Container shipping Others Source: the Company. Table-1: Change in Profit Margins of the Company 1H09 2H09 hoh (pts.) 1H10 2H10 hoh (pts.) FY09 FY10 yoy (pts.) Gross margin (%) Net margin (%) Source: the Company, Guotai Junan International. Breakeven point of the Company s fleet is still low. As at the end of 2010, the Company operated a self-owned dry bulk fleet of 35 ships with an aggregate capacity of 2.25 million DWT, 10 container vessels and 1 double-hull VLCC. During 2010, the Company took delivery of 7 new dry bulk vessels with aggregate capacity of around 0.7 million DWT, including 4 Capesize and 3 Handysize, and sold 1 Panamax. After the delivery of new vessels, the Company s breakeven point of the operated fleet is estimated to increase to around US$9,100 per day. As at the end of 2010, the Company still has 7 new dry bulk vessels in orderbook, including 2 Capesize vessels, 4 Panamax vessels and 1 Handysize vessels. The new deliveries are planned to be from 2011 to early As at the early of 2012, the Company s dry bulk fleet will increase to 3.35 million DWT, up by nearly 50% compared to that at the end of The management mentioned that the building prices for their new vessels are lower than current market prices. Average breakeven points for the new deliveries is estimated to be US$17,000-18,000, less than US$12,000 and around US$9,000-10,000, respectively, for Capesize, Panamax and Handysize. See the last page for disclaimer Page 2 of 7

10 53.0% and 14.7% of FY11-FY12 operation days are secured. As at the end of 2010, 53.0% of the Company s FY11 operation days and 14.7% of FY12 operation days were already secured by contracts. The average daily charter hire rate for FY11 secured days is estimated to decrease to around US$18,000, but still much higher than the operated fleet s daily breakeven points of around US$9,100. Contract rates for the secured days in FY12 is estimated to be more than US$20,000 per day, but we believe it should be mainly for the Capesize vessels. In views that BDI decreased in 1Q11 and more Handysize (whose building prices are much cheaper than Capesize) will be contracted, we expect the secured rates will be lower for more FY12 operation days in the future. 23 March 2011 BDI was weak in 1Q11, although it has rebounded obviously in recent one month. According to data from Baltic Exchange as at 14 March 2011, the average time charter rate for Capesize, Panamax, Handymax and Handysize was US$10,845, US$17,070, US$16,034 and US$11,010, respectively. Currently the average market charter hire price for Capesize vessels are even lower than the prices of Panamax and Handysize, and also lower than the Company s breakeven of new Capesize vessels. But the market prices for Panamax and Handysize are still higher than the breakeven points of the Company s corresponding vessels. Fortunately, the Company s 4 new Capesize delivered in 2010 have already been secured by contracts and locked in profit, and the management said that the other 2 new Capesize planned to be delivered in 2011 were also with contracts already. Therefore, the current low market price of Capesize might not influence much the Company s operated fleet. Among all the dry bulk vessel types, Capesize is the one which will face the highest challenge of oversupply in the future, but we think its market price should not be such low for a long time, especially after the Australia flood and the rebuilding work for Japan earthquake begins. Figure-3: Baltic Dry Index(BDI) Performance 12,000 10,000 8,000 6,000 4,000 2,000 0 BDI BDI Yearly Av g. 4,510 3,371 3,180 7,070 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 6,399 2,617 2,758 YTD 1,316 Source: Bloomberg, Guotai Junan International. Data are as at 14 March Figure-4: The Company s Existing Bulker s Breakeven and Contract prices USD/day 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 Source: the Company, Guotai Junan International av g. daily TCE Av g. charter hire rate for 14.7% of FY12 operation day s Av g. charter hire rate for 53.0% of FY11 operation day s Breakev en point f or exsiting f leet Figure-5: Market Prices and the Company s New Orderbook s Costs USD/ day 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 Latest av g. market charter hire rate f or Capesize Av erage cost f or Capesize orderbook Latest av g. market charter hire rate f or Handysize Av erage cost f or Handy size orderbook Latest av g. market charter hire rate f or Panamax Av erage cost f or Panamax orderbook Source: the Company, Bloomberg, Guotai Junan International. Note: the market prices are as at 14 March See the last page for disclaimer Page 3 of 7

11 Will dispose of oil tanker in the future to eliminate competition with its sister company NJSC ( CH). In order to eliminate competition in the oil tanker business between Nanjing Tanker Corporation (NJSC, CH) and a JV held by the Company, Sinotrans Shipping has purchased the oil tanker from its JV for an aggregate consideration of US$100 million late last year. The Company currently only owned the one double-hull VLCC, which recorded at an operating loss of US$2.3 million in FY10. The loss was mainly because of the share of impairment loss for the oil tanker of US$3.70 million, resulting from the purchasing price lower than the net book value. The management indicated that the oil shipping business has actually turned around into profit in FY10, excluding the impairment loss. 23 March 2011 Meanwhile, the Company entered into a charter agreement with its fellow subsidiary early this year, to charter out the oil tanker for a term of 5 years at a daily rate of US$25,800 by monthly installments. Upon expiry of the charter agreement, the charter will purchase the oil tanker at a consideration of US$80 million. The contract rate signals a decrease of around 30% in average daily TCE for the oil tanker in FY11, compared to the average rate in FY10. But the fixed rate will continue for the next five years and provide stable income for the Company. After the vessel is sold, the Company will not be involved in oil shipping business in the future. Competition still exists with another sister company CSC Phoenix ( CH). Besides internal competition with NJSC( CH), Sinotrans Shipping also faces competition with another sister company, CSC Phoenix( CH) who is mainly engaged in domestic dry bulk shipping along the Yangtze River but also has a few vessels for international shipping. Sinotrans Shipping will probably integrate assets with CSC Phoenix ( CH) to eliminate internal competition in the future, and we think the easiest way for Sinotrans Shipping is to acquire the international dry bulk vessels from CSC Phoenix( CH), so that the companies will be able to operate dry bulk shipping in different markets and eliminate competition. Profitability of the sister company is weaker than Sinotrans Shipping, and we do not think it good for Sinotrans Shipping to acquire the sister company currently. In our communication with the management, we believe they would also prefer to separate the international business and domestic business under two different companies. That is to say, we think the possibility for Sinotrans Shipping to acquire CSC Phoenix ( CH) is low. Instead, Sinotrans might acquire the international dry bulk vessels from the sister company in the future. But before the asset integration with CSC Phoenix ( CH), we expect the potential acquisition of Sinochart, which has been discussed since the Company was listed, should go first. Potential asset acquisition from the parent company is still waiting for good market timing. The Company has been planning to acquire Sinochart (China National Chartering Corporation, 中国租船公司 ) from the parent company for a long time. Sinochart s FY09 revenue is roughly estimated to be around RMB5 billion and net profit to be around RMB million. Profit margin of Sinochart is much lower than the Company s existing business, because its business is to charter in vessels and then charter them out. If the Company acquires Sinochart in the future, we expect the Company s overall profit margin will decrease highly, but ROE might increase because Sinochart is a light-asset company whose dry bulk shipping business is primarily based on voyage chartering contracts and a third party for vessel source. The management ever mentioned that they might not execute the acquisition of Sinochart and other asset integration at the same time. The acquisition of Sinochart is still waiting for good market timing. Decrease 11-12EPS by 25%-26% due to lower time charter hire rates. Due to weak BDI performance, we decrease the expected average daily charter hire rate in our calculation. Meanwhile, we also adjust the operating capacities according to the Company s latest schedule for orderbook. Due to higher depreciation and lower charter hire prices, 11-12EPS are decreased by 25.7% and 25.3%, respectively, to US$0.026 and US$ Introduce 13EPS of US$ Table-2: Change in Earning Estimates Old Estimates New Estimates Change 2011F 2012F 2013F 2011F 2012F 2013F 2011F 2012F 2013F Dry bulk average daily TCE (USD) 19,584 21,180 n.a. 16,677 17,305 18, % -18.3% n.a. Gross Profit (USD m) n.a % -25.2% n.a. Gross Margin (%) n.a n.a. Net Profit (USD m) n.a % -25.3% n.a. EPS (USD) n.a % -25.3% n.a. Source: Guotai Junan International. See the last page for disclaimer Page 4 of 7

12 Net cash is equivalent to 77% of current stock price, or current price implies a discount of 57% to the operated fleet. According to data as at 31 December 2010, the Company had net cash of US$1,008 million. The net cash amount is equivalent to HK$1.97 per share and accounting for 77% of the latest closed share price of HK$2.57. The Company still has capital commitment of around US$226.7 million, which is mainly for the future payment for construction of new building vessels. Since the cash amount of CAPEX commitment will be changed into vessels, we adjust the current net cash amount with the CAPEX commitment to reflect the assets more factually. As shown in Table-3, excluding the CAPEX commitment and even not including future cash income, the Company still has net cash of US$781 million, equivalent to HK$1.52 per share, for further CAPEX. Net cash per share excluding CAPEX commitment accounts for 59% of current stock price. 23 March 2011 According to the Company, net book value of its operated fleet was around US$1,030 million as at the end of Adjusted for the above CAPEX commitment which is for construction of new building vessels, the adjusted NBV of the operated fleet is US$1,257 million, representing HK$2.45 per share. Currently the Company is traded at share price of HK$2.57. If we assume 1.0x PB for the adjusted net cash amount of HK$1.52 per share, then the current price of HK$2.57 implies a high discount of 57% to the Company s owned fleet. In views that the Company s fleet is still young, we think the Company is now traded at a very attractive share price. Table-3: The Company s net cash balance and NBV of the operated fleet As at Dec 31, 2010 US$ million US$ per share HK$ per share Net cash balance 1, Capital commitment NBV of the operated fleet 1, Adjusted for capital commitment Adjusted net cash balance Adjusted NBV of the owned fleet (including commitments) 1, Closed price at 15 March 2011 (HK$) Implying discount to the owned fleet 57.4% Source: the Company, Guotai Junan International. Note: Assuming HKD/USD=7.795 as at 15 March Table-4: The Company s Owned Fleet No. of Vessels Capacity Average age (years) million 9.24 Dry bulk vessels 7 new building bulkers 0.7 million DWT 0.00 Container vessels 10 6,667 TEUs 10.2 Oil tanker 1 double-hull VLCC 310,444 DWT 2.70 Source: the Company. Maintain Buy, but revise down TP from HK$4.10 to HK$3.50 due to lower earning estimates. Dry bulk shipping market is facing very high challenges ahead, but we believe the Company would benefit from its solid balance sheet. It may be an opportunity for a shipping company who owns abundant cash at the moment, just like Sinotrans Shipping, to expand fleet in the market downturn and earn a potential growth in the future. The stock is now only traded at 0.6x 10PB and 0.6x 11PB, deeply undervalued as compared to peers. Its net cash of HK$1.97 per share, which accounts for 77% of current stock price, also provides a much safer valuation than peers. Maintain investment rating of Buy. But because of the decrease in earning estimates and high risks in the dry bulk shipping industry, we revise down TP from HK$4.10 to HK$3.50 (36% upside potential), representing 0.8x 11PB, or 12% discount to 11NAV of HK$3.97. Our TP of HK$3.50 is also equal to 1.0x adjusted net cash per share plus 0.8x adjusted NBV of the Company s owned fleet. See the last page for disclaimer Page 5 of 7

13 Financial Statements and Ratios Income Statement Balance Sheet Year end Dec (USD m) 2009A 2010A 2011F 2012F 2013F Year end Dec (USD m) 2009A 2010A 2011F 2012F 2013F - Dry bulk vessel Property Plant & Equipment 816 1,029 1,191 1,225 1,260 - Oil tanker Interest in Jointly controlled entities Container vessel Other non-current assets Other revenue Non-current Assets 1,291 1,114 1,273 1,306 1,339 - Derived by JCEs at proportional basis (12) (14) (11) (11) (11) Revenue Inventory Trade and other Receivable Cost of operations (127) (164) (177) (201) (210) Cash & Equivalents 753 1, Gross profit Other short-term assets Current Assets 784 1, ,033 SGA expenses (17) (16) (17) (18) (19) Other income Trade and other Payable Operating profit Short-Term borrowings Other Current Liabilities Net financial income/cost Current Liabilities Share of associates and JVs (1) (1) Pre-tax profit Long-Term borrowings Other non-current liabilities Tax (0.2) (0.8) (0.3) (0.4) (0.4) Non-current Liabilities After-tax profit Minority Interest Minority interests Net profit Share capital Reserves 1,982 2,074 2,122 2,180 2,267 EPS (USD) Total Shareholders' Equity 2,034 2,126 2,173 2,231 2,318 yoy (%) (69.4) 19.9 (18.2) BPS (USD) Cash Flow Statement Year end Dec (USD m) 2009A 2010A 2011F 2012F 2013F Financial Ratio 2009A 2010A 2011F 2012F 2013F Pre-tax profit Adjustments Gross margin (%) Cash from Operations Operating margin (%) Cash from Investing 13 (198) (219) (100) (100) Net margin (%) Cash from Financing (179) (36) (33) (38) (41) ROA (%) Cash and cash equivalents at 1st Jan , ROE (%) Net change in cash (22) (93) (102) Net gearing ratio (%) Net Cash Net Cash Net Cash Net Cash Net Cash effect of FX rate changes (0.0) 0.4 (0.3) Interest coverage (x) Net inst inc. Net inst inc. Net inst inc. Net inst inc. Net inst inc. Term deposits with initial term > 3 mths Current ratio(x) Cash and cash equivalents at 31st Dec 1,153 1, Quick ratio (x) Source: the Company, Guotai Junan International. 23 March 2011 See the last page for disclaimer Page 6 of 7

14 Company Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Definition Buy Relative Performance >15%; or the fundamental outlook of the company or sector is favorable. Accumulate Relative Performance is 5% to 15%; or the fundamental outlook of the company or sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the company or sector is neutral. Reduce Relative Performance is -5% to -15%; or the fundamental outlook of the company or sector is unfavorable. Sell Relative Performance <-15%; or the fundamental outlook of the company or sector is unfavorable. 23 March 2011 Sector Rating Definition The Benchmark: Hong Kong Hang Seng Index Time Horizon: 6 to 18 months Rating Definition Outperform Relative Performance >5%; or the fundamental outlook of the sector is favorable. Neutral Relative Performance is -5% to 5%; or the fundamental outlook of the sector is neutral. Underperform Relative Performance <-5%; or the fundamental outlook of the sector is unfavorable. DISCLOSURE OF INTERESTS (1) The Analysts and their associates do not serve as director in the listed corporation mentioned in this Research Report. (2) The Analysts and their associates have no financial interests in the listed corporation mentioned in this Research Report. (3) Except for Shandong Chenming (01812), Guotai Junan and its group companies do not hold more than 1% of the market capitalization of listed corporation mentioned in this Research Report. (4) Guotai Junan and its group companies have not had investment banking relationships within the preceding 12 months for the listed corporation mentioned in this Research Report. DISCLAIMER This Research Report does not constitute an invitation or offer to acquire, purchase or subscribe for securities by Guotai Junan Securities (Hong Kong) Limited ("Guotai Junan"). Guotai Junan and its group companies may do business that relates to companies covered in research reports, including investment banking, investment services and etc. (for example, the placing agent, lead manager, sponsor, underwriter or invest proprietarily). Any opinions expressed in this report may differ or be contrary to opinions or investment strategies expressed orally or in written form by sales persons, dealers and other professional executives of Guotai Junan group of companies. Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the asset management and investment banking groups of Guotai Junan. Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report, Guotai Junan does not guarantee the accuracy and completeness of the information and data herein. This Research Report may contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation, so uncertainty may contain. Investors should understand and comprehend the investment objectives and its related risks, and where necessary consult their own financial advisers prior to any investment decision. This Research Report is not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction Guotai Junan Securities (Hong Kong) Limited. All Rights Reserved. 27/F., Low Block, Grand Millennium Plaza, 181 Queens Road Central, Hong Kong. Tel.: (852) Fax: (852) Website: See the last page for disclaimer Page 7 of 7