Bohai Ferry (603167) First Coverage Report: “Highway” on the Water Both Dividends and Repurchase
This report reads: The company expands its advantages in industries with strict access to regulations, and high dividends and share buybacks reduce reinvestment risks.
Investment highlights: stable profitability, high dividends, first coverage, “careful increase” rating, target price 10.
In the passenger-roller ferry market that has access to strict supervision, Bohai Ferry is the leader. The load factor and freight rate remain stable, and it is expected to be stable and profitable in the future.
The EPS for 2018-20 is expected to be 0.
75 yuan, a growth rate of 6%, 3%, 5%.
The company’s past risks mainly came from investment in the cruise industry, but continued high dividends and repurchases since 2018 have reduced the risk of reinvestment and the investment value has already become apparent.
The diversion of high-speed rail diminished, and passenger ferry traffic gradually increased slowly.
Since 2012, the high-speed rails around the Bohai Bay have been successively built, which has eroded the hinterland of ferry passengers, diverted the demand for passenger ferry, and caused a decline in passenger traffic.
As the marginal impact of high-speed rail decays, the hinterland of ferry passengers tends to stabilize, and the demand for passenger transportation in the hinterland has naturally increased. 南京桑拿网 Ferry passenger volume has picked up in 2017 and is expected to grow slowly in the future.
Capacity continued to be put in place, and car ferry traffic grew rapidly.
With the launch of passenger and cargo ships, the ferry capacity of Bohai Ferry will increase significantly.
The company will increase its traffic by opening up major customers and adjusting prices.
In the long run, the cost advantage of ferry transportation over road transportation will expand.
It is expected that the car ferry traffic will increase rapidly in 2019-20, and the load factor will help maintain stability.
Weak balance between supply and demand, favorable and stable freight rates.
Although the freight rate of Chedu dropped in 2008-16, the deducted freight rate started to rise in 2013, but it was only covered by the decline in oil prices.
In 2017, the price of oil rose, and the increase in freight rates appeared.
Future supply and demand are in a weak balance, and freight rates help maintain stability.
The added value of fuel surpassed expectations, and the relaxation of governance over time led to an increase in traffic volume. The advancement of passenger ro-ro vessels resulted in asset impairment losses. Cruise business increased. The exchange rate continued to rise and diminish. The Bohai Bay built a traction bridge to divert ferry passenger cargo transportation needs.