COSCO SHIP HOLD(601919)2025-03-26 07:35Summary of COSCO Shipping Holdings Conference Call Company Overview - Company: COSCO Shipping Holdings Ltd (1919.HK) - Industry: Transportation & Infrastructure - Market Cap: Rmb219,403 million as of March 21, 2025 - Stock Rating: Underweight - Price Target: HK11.98 Key Financial Highlights - 2024 Net Profit: Rmb49 billion, consistent with preliminary results and estimates [1] - Operating Cash Inflow: Rmb69.3 billion in 2024 [2] - Capital Expenditures: Rmb26 billion and lease payments of Rmb13.1 billion in 2024 [2] - Share Repurchases: Rmb2 billion in A and H shares, representing 4% of 2024 net profit [2] - Segment Net Profit: Rmb50 billion in 2024, up from Rmb22 billion in 2023 [8] - Volume Growth: Increased by 10.1% YoY to 25.9 million TEUs in 2024 [8] Revenue Breakdown - Total Revenue: Rmb233.9 billion in 2024, a 33.3% increase YoY [9] - Container Shipping Revenue: Rmb225.97 billion, up 34.4% YoY [9] - Container Terminals and Related Businesses: Rmb10.81 billion, up 4.0% YoY [9] - Operating Profit: Rmb59.02 billion, a 139.4% increase YoY [9] - Net Margin: 21.0%, up from 13.6% in 2023 [9] Dividend Policy - Dividend Payout Ratio: Expected to remain at 30-50% for 2025-2027 [8] - Implied Dividend Yield: 9% on H-shares and 7% on A-shares for 2H24 [8] Market Outlook and Risks - Market Sentiment: Soft sentiment in the container shipping market, with uncertain export momentum due to potential trade tariffs [8] - Down-Cycle Continuation: Anticipated continuation of the container shipping down-cycle through 2025-2026 [8] - Risks: Include global trade drops amid macro headwinds, significant fuel price increases, and failure of segment capacity discipline [13][14] Valuation Methodology - Target P/B Ratios: - Bull Case: 0.9x - Base Case: 0.5x - Bear Case: 0.2x [10][11] - Upside and Downside Risks: Equal probabilities of upside from global trade recovery and downside from unfavorable supply-demand outlook [10][11] Conclusion COSCO Shipping Holdings has shown strong financial performance in 2024, with significant increases in net profit and revenue. However, the company faces challenges in the current market environment, including soft demand and potential trade issues, leading to a cautious outlook for the coming years. The stock is rated as underweight, reflecting concerns over future performance amidst ongoing industry headwinds.