COSCO SHIPPING (601919): Q2 Euro Line waits for the wind and waves to calm down

Key points in the report describe the 深圳桑拿网 first half of 2019, the company achieved operating income of 721.

0 million yuan, an increase of 60 in ten years.

0%; realized attributable net profit of 12.

40,000 yuan, an increase of 2932 in ten years.

8%.

Incident review profitability continued to improve, during which costs remained high.

In the first half of the year, the company’s operating income increased by 60.

0%, gross margin increased by 4 in the short term.

3 points. In a comparable caliber including OOCL, the company’s revenue increased by 10 in the first half of the year.

2%, gross margin increased by 3 in the short term.

4pct.

Looking at Q2 alone, the gross profit margin of container shipping business increased and increased5.

At 7pct, the quarterly increase was higher than the previous Q1. The synergy effect after the acquisition of 重庆耍耍网 Orient Overseas continued to be released, and the main business of container shipping continued to drive the improvement of the company’s profitability.

At the same time, in the same order as Q1, under the order of OOCL’s consolidation, additional acquisitions and new leasing accounting standards, the company’s period expenses still maintained an overlapping margin, but Q2’s financial expenses decreased slightly from the previous month, or because the company actively adjustedShort-term borrowing structure, reducing capital costs.

The growth of Q2 Europe continued, and the growth rate of single-box revenue expanded.

The traffic performance of Q2 routes under comparable calibers is different: the US line continues to extend but the decline is narrowed month-on-month. The growth of the European line continues and is accompanied by an increase in the growth rate.The traffic volume of the US line is under pressure; 2) With the launch of the “DAY 3” product and the launch of new large vessels, the market share of the European line may increase.

In terms of revenue, the average freight rate of SCFI Europe freight for Q2 decreased by about 7.

7%, but the gradual and stable shape of the leader has benefited significantly. The company’s single-box revenue in Europe has increased slightly; the US line has a stable freight rate under the industry’s high synergy effect. The company’s single-box revenue increase is consistent with the average SCFI US line freight rate.

In addition, the company continued to expand the layout of regional routes and third-country routes. Corresponding traffic volume and prices increased significantly, supporting revenue from container shipping business, and single-box revenue increased significantly.

The growth rate of the terminal business has been transitioned month-on-month, which can still provide industry synergy and profit backing.

Q2 company’s terminal total tungsten increased by 9.

7%, the growth rate decreased by 2 from the previous month.

9 points, among which the growth rate of the holding terminal decreased by 11 from the previous month.

9pc, or the cracks in the southeast coast due to the evolution of the trading environment.

However, the gross profit margin of the terminal business increased by 2 from the previous quarter.

4pct can still provide the company with better industrial synergy and profit backing.

Investment advice: The competitive landscape has improved, waiting for the stability of demand to increase.

The percentage of orders in hand is at a historically low level. The impact of the limit sulfur directives is positive. The industry’s medium-term supply is good. Even if the uncertainty of trade demand is still strong, the industry’s synergy is enhanced and it is conducive to the extension of the industrial chain.

Taking into account the sale proceeds of Long Beach Terminal, the company’s EPS for 2019-2021 is expected to be 0.

39, 0.

22 and 0.

26 yuan, corresponding to PE, 12, 21 and 18 times, maintaining the “buy” rating risk tips: 1.

Substantial global macroeconomic decline; OOCL’s integration effect was less than expected; Long Beach Terminal’s sales progress was less than expected.