COSCO SHIPPING (601919) Company Review: Consolidation or Supply and Demand Mismatch Window
Event: Since December, major container liner companies around the world have successively announced plans to suspend flights before and after the year, which far exceeds the average number of voyages cancelled each year in the past seven years.
And in the next two weeks, more shipping companies are expected to announce the February suspension.
Judgment of the downward trend in the market after the contraction of the air suspension plan may be overdone.
In previous years, Asian factories have begun to ship goods to US retailers and manufacturers in mid-to-December. However, due to Sino-US economic and trade negotiations this year, the market has held a wait-and-see attitude towards the subsequent tariff policy. Our expected earnings have not yet appeared.Most of the merchants judged that the market outlook was weak. Compared with previous years, the Chinese Lunar New Year, which was earlier than the previous year, launched a large-scale suspension plan for the first time.
However, we have already made an analysis in the annual report. The real estate forecast of the US real estate as the axis supports the consumption of the United States. The European economy is also expected to stabilize with the development of China’s countercyclical policy. We believe that the expected difference has already appeared.It’s up!
In the US manufacturing industry, the durable goods (except for national defense) inventory indicators have weakened for several years, and the passive replenishment market has prompted a recurrence.
The decline in the highest data of durable goods inventory means that consumption is stronger than production, and the profitability of manufacturing companies will also improve during this stage, bringing stronger replenishment priority, and boots driving freight rates.
This year’s Chinese New Year is earlier than before. In the next 2-3 months, Chinese and American manufacturers will face no availability of goods, and the decline in finished product inventory may trigger passive inventory replenishment.
We have resumed the review in “Consolidation: Three Cycles Overlap Up, Embrace the Time Dividend”. Of the six rounds of complete inventory cycles starting in 2000, there was only one round, that is, the 2009-2010 cycle was affected by the global financial crisis, and freight rates did not followAs the US durable goods inventory declined and rose, the CCFI freight rate increased by an average of 223 in the remaining 5 rounds.
72 points, an increase of up to 25.
In general, benefiting from the implementation of the IMO sulfur restriction order, the high and low price of low-sulfur oil is expected to prompt carriers to arrange transportation capacity to dock and install towers, and the implementation of the suspension plan will be enhanced.
Gradually, the efficiency of 杭州夜网论坛 ship wealth creation is significantly different in different seasons. Therefore, it is the best strategy for companies to install desulfurization towers in the off-season.
At present, the spread of low-sulfur fuel is close to 300 US dollars / ton. It is expected that carriers will gradually accelerate the installation process of the desulfurization tower. By then, even if the market freight rate increases, ships will not be able to return to operation quickly, so the implementation probability of the suspension plan is high.
Investment suggestion: This round of suspension is mainly gradual. The peak period of 12 months is expected due to changes in China and the United States tariff policy. The airlines judge that the subsequent market will remain weak, but we believe that consumption in Europe and the United States has increased, and durable goods andThe decline in manufacturing inventory will bring about passive replenishment.
In terms of cost, COSCO SHIPPING ranks third in the world in terms of scale of transportation capacity, breaks through the bargaining power of fuel suppliers, and has strict maintenance management. The upward degree of fuel costs and the possibility of related risks exceed market average levels.
We believe that the container shipping industry is expected to enter the supply-demand mismatch window, and the growth of freight rates is expected to exceed market expectations. As a first-tier carrier, COSCO Haikong is beneficial to fully benefit, and it is expected that 19-21 will be deducted from non-homing net profit forecasts29.
70,000 yuan, maintain “Buy” rating!
Risk Warning: The global macro economy exceeds expectations, safety accidents, insufficient fuel supply, etc.