Category: Money tips Release Date: 2006-04-22
Research Objective
About the company restructured operations and future direction, as well as business and the international association of dry bulk market.
Research Conclusions
Operations to the Yangtze River, Hai Jin Jiang bulk cargo transport based
The second half of 2006, CSC bulk business to replace way into the company. Currently has capacity for 2.4 million dwt, of which 1.8 million tons capacity the Yangtze River, Hai Jin Jiang capacity 600,000 tons. The carriage of goods mainly ore and coal, ore shipments account for about 2 / 3, the coal traffic about 1 / 4, customers are mainly along the steel mills and power plants, ore shipments accounted for about 80% share of the steel mills along the Yangtze River.
The Yangtze River bulk cargo transport company boss, in the ore and coal transportation market has the absolute advantage in 2005, accounting for a total traffic of about 9.5% market share in the Yangtze River.
Companies with international bulk freight correlation smaller, lower-margin business
From the bulk tariff fluctuations, the international higher than the coastal areas, coastal areas than inland. Recently, the international dry bulk freight soared, the company freight is basically stable. Company's main business profit margins relatively low, at around 9%, including coastal and sea-river services into the higher profit margins, the Yangtze River transportation is very low, mainly due to high oil prices and the company personnel heavier burden on the future there may be The turn for the better.
Future business will be restructured to focus on coastal and ocean-going
At present the company the operational capacity of the Yangtze River can basically meet the market demand, capacity for the Yangtze River will be carried out structural adjustment, eliminating the backward capacity, raising the proportion of the ship. Focus on the future expansion of capacity to demand, profitability, strong coastal and ocean-going transportation market development.
There is still growth potential revaluation of assets and eliminate the capacity will bring some benefits
Company's assets in exchange into the bulk cargo transport company although more substantial revaluation, but the fleet is relatively older age of the boat, the disposition of assets when there is still a certain added value. 2006 old vessels out of profits for the company to bring a major contribution to the future there will be some capacity gradually dispose of the transition period for the company to bring a certain profit contribution.
Earnings forecasts and investment ratings
The company is currently in transition and absorb the historical burden period in 2006 results mainly from the old vessel disposal contribute to earnings, the contribution in 2007 will be the main industry has been enhanced, but a big improvement in the short term is difficult. Investment value of the company depends primarily on the future development planning and implementation progress. Short-term to maintain the previous rating of neutral within six months.
Risk Analysis
Borrowing, heavier, funding tight, profitability is weak, to the restructuring pressure.
