Port business throughput improved; investment return down yoy
Shanghai International Port Group’s (SIPG) 1H24 revenue rose 23.1% yoy to RMB19.84bn and attributable net profit (NP) increased 14.9% yoy to RMB8.42bn. The investment return for 1H24 was RMB3.81bn (-8.7% yoy). SIPG announced an interim DPS of RMB0.05, with a payout ratio of 14%. Thanks to rebounding export demand in 1H24, profits of SIPG’s port business rallied yoy; however, yoy investment return from Postal Savings Bank of China (PSBC) and Orient Overseas fell in the same period. In view of the sheer volume of SIPG’s throughput and its robust growth, we slightly lift our NP forecasts for 2024/2025/2026 by 4/4/3% to RMB15.7/15.8/16.6bn. We lift our target price by 10% to RMB6.9, based on 10.2x 2024E PE, its average PE over the past three years plus one standard deviation, as we expect an improved profit performance in 2024. Maintain BUY.
Port business profit for 1H24 up yoy on improved export demand
Thanks to rebounding export demand in 1H24, earnings of SIPG’s main port business notably enhanced yoy. In 1H24, gross profit went up 22% yoy to RMB7.8bn, while GPM fell 0.4pp yoy to 39.3%. By segment, for 1H24, revenues from containers/bulk goods/port logistics/port services grew 4.6/5.9/5.0/31.8% yoy to RMB8.06/0.81/5.60/2.04bn, with gross profits at RMB3.76/0.23/1.39/0.68bn (+2.4/+27.3/-5.7/+46.9% yoy).