COSCO SHIP HOLD(601919) 国信证券·2024-04-30 06:32Investment Rating - Buy rating maintained for COSCO Shipping Holdings (601919 SH) [1][4] Core Views - Q1 2024 results show significant sequential growth, with Q2 expected to see further elasticity release [1] - COSCO Shipping Holdings achieved Q1 2024 revenue of RMB 48 27 billion, up 1 94% YoY and 18 05% QoQ Net profit attributable to shareholders was RMB 6 755 billion, down 5 23% YoY but up 277 59% QoQ [1][5] - Freight volume remained stable in Q1, with international route revenue per TEU at USD 1,172 06, down USD 99 45 YoY, likely due to long-term contract execution during the Red Sea crisis [1][7] - Red Sea tensions and potential restocking in Europe and the US could reverse industry supply-demand dynamics, potentially boosting annual freight rates [1][10] Financial Performance - Q1 2024 freight volume reached 6 0273 million TEU, up 10 53% YoY, with growth across most routes except Asia-Europe due to Red Sea disruptions [1][7] - CCFI and SCFI indices showed significant YoY growth in Q1 2024, at 18 76% and 107 45% respectively, despite COSCO's underperformance in international route revenue per TEU [1][7] - 2024-2026 net profit forecasts are RMB 29 1 billion, RMB 29 58 billion, and RMB 30 73 billion respectively, with PE ratios of 6 2X, 6 1X, and 5 9X [1][12] Industry Outlook - Red Sea tensions since November 2023 have tightened supply, with potential for a 9% increase in demand if the situation persists, as 30% of global capacity is deployed on Europe routes [1][10] - European and US consumer goods inventories are at low levels, with potential restocking expected to further drive freight rate increases [1][10] Financial Projections - 2024E revenue forecast at RMB 194 747 billion, up 11% YoY, with net profit expected to grow 22% YoY to RMB 29 099 billion [2] - ROE projected at 13 9% for 2024E, with EBIT margin expected to improve to 19 5% [2] - EPS forecast for 2024E is RMB 1 82, with a dividend yield of 8 8% [2][12]