The controlling shareholder can increase its holdings by up to 3 billion! 10 times the high level of shipping bull stocks cut in half, BDI has a continuous rise on the sixth week of the week
Financial Associated Press, May 21 (Editor Muzi) COSCO SHIPPING Holdings, the leading A-share shipping company with a total market value of over 200 billion yuan, announced last night that the controlling shareholder COSCO SHIPPING Group and its wholly-owned subsidiaries plan to increase their holdings on the day of the start. Within 12 months from the beginning, the company will increase its holdings of A shares and H shares of the company by 1.5 billion to 3 billion yuan.
Among them, the controlling shareholder has increased its holdings of the company’s A shares by 500,000 shares on May 20; from May 19 to May 20, it has increased its holdings of the company’s H shares by a total of 3,025,500 shares. After the completion of this increase in holdings, COSCO SHIPPING Group and its subsidiaries collectively hold 46.91% of the company’s total share capital.
It is worth noting that this is not the first time that controlling shareholders have increased their holdings. According to the announcement last year, on October 18, 2021, COSCO SHIPPING Group increased its holdings by 7.9 million shares (the “first increase”), and as of April 15, 2022, the increase in holdings was completed. It is 1.892 billion yuan of shares (including 1.074 billion yuan of A shares and 818 million yuan of H shares).
The purpose of the two holdings increases is based on confidence in the company’s future development prospects and recognition of the company’s investment value.
Benefiting from the continuous outbreak of shipping business under the epidemic situation in the previous two years, COSCO SHIPPING Holdings once jumped to a big bull stock that rose 10 times in one year. 966%. Since then, the high correction has also been very tragic, with the largest cumulative decline so far as high as 49%.
After-hours data on Friday showed that against the backdrop of a net purchase of 14.236 billion yuan by northbound funds, COSCO SHIPPING Holdings received a net purchase of 336 million yuan, ranking ninth in the single-day net purchase of Shanghai Stock Connect.
On the news, the Baltic Dry Index (BDI) rose for the sixth week in a row, as freight rates for various types of ships rose. The Baltic Dry Index rose to 3,344 points, the highest since December 13 last year, up 7.7% for the week. The index has been on an upward trend since its lows this year.
BDI is known as an economic indicator of the shipping industry, and is calculated by weighting the spot freight rates of several major shipping routes, and the level of freight rates is closely related to the earnings of shipping stocks.
CITIC Construction Investment believes that the impact of the Russian-Ukrainian conflict may lead to the diversion of import and export trade to other countries, bringing about changes in the average transportation distance, and the state of trade rebalancing may be more chaotic. Judging from the impact of events such as trade disputes and epidemic crises in history, it often brings additional costs for commodity supply substitution, resulting in price increases including transportation.
COSCO SHIPPING Holdings is mainly engaged in container shipping and terminal business. According to Alphaliner’s statistics, the company’s container fleet ranks third in the world. In 2021, the revenue of container shipping business will be 327.927 billion yuan, accounting for 98.27% of the total revenue; from a regional perspective, the overseas revenue of containers will account for more than 90%.
According to the first quarterly report of COSCO SHIPPING Holdings, the revenue was 105.53 billion yuan, a year-on-year increase of 62.75%; the net profit attributable to the parent was 27.617 billion yuan, a year-on-year increase of 78.73%.
Among them, the container shipping business showed a trend of decreasing volume and increasing prices. The company’s revenue per container on international routes was US$2,975.14/TEU, a year-on-year increase of US$1,366.36/TEU, showing the industry’s high prosperity. Benefiting from this, the company’s airline revenue in Q1 was US$15.625 billion, a year-on-year increase of 67.54%. The freight volume of international routes fell by 7.7%, and the domestic volume fell by 15.6% year-on-year, which was more obvious than the decline of international routes, mainly due to the repeated domestic epidemics in the first quarter.
Regarding the shipping boom in the second half of the year, Han Yichao of Changjiang Securities believes that with the gradual control of the domestic epidemic, the release of the backlog of transportation demand in the early stage and the gradual arrival of the traditional peak season, there may be a rebound in cargo volume and a rebound in the freight index, which will promote the industry boom pick up. On the other hand, since May 1, the new long-term freight rate will be widely used on the US line, which will further strengthen the Q2 price factor.
Guohai Securities License believes that the next key point is whether the industry can overcome the cycle. 2023-24 is the period of concentrated production of ships, and there is currently a concern of oversupply on the supply side. As the demand for cooperation between liner companies gradually becomes stronger than the willingness to compete, the leading Maersk has repeatedly stated that it will not deploy capacity in a disorderly manner. If the industry can maintain orderly competition in the next year and the next year, it may usher in a new round of value revaluation.
According to profit forecasts and valuation calculations, Wang Kai of Industrial Securities predicts that COSCO SHIPPING Holdings’ net profit attributable to its parent in 2022-2024 will be 101.563 billion yuan, 49.868 billion yuan and 10.528 billion yuan, and the net profit growth in 2023 and 2024 will drop by 50.9% and 50.9% year-on-year respectively. 78.9%.