As its 07 Annual Report showed, turnover was 39.134 billion yuan, up 26.61 percent yoy; net profit attributable to the shareholders of listed companies: 3.324 billion yuan, an increase of 396.66 percent yoy; the latest fully diluted EPS: 0.285 yuan. Distribution plan: 0.04 yuan (before tax) cash dividends for each share.
In 07, as growth of global new capacity saw slowdown and demand for transport became stronger, the container transport industry slightly experienced a boom which benefited the company. Annual container transportation completed a total of 7.2988 million TEU, an increase of 29.0 percent yoy; revenue: 39.134 billion yuan, up 26.6 percent yoy. In aspect of specific routes, European and Asian routes and domestic routes gained rapid growth. The company has large fleet of ships which are very new and can reduce operating costs. International oil prices changing from low level to high level also possessed a certain positive significance and the company’s gross margin substantially upgraded by 6.9 percentage points to 13.7 percent, thus achieving substantial growth of performance.
In 08, global economic downturn will slow down the demand for container transport and bring the impact on the industry. On the basis of the expectation that average oil price will rise by 20 percent, we believe that the company may see a noticeable decline in gross margin. In addition, terminal assets injection will not improve performance in the short term.
Without consideration of assets injection, EPS for 08-09 will be 0.21 yuan and 0.36 yuan respectively. With higher risks in the cyclical industry, "neutral" rating is reiterated.