Results First Take: FY21 results in line
- FY21 core net profit rose by 24% y-o-y to US$332.5m, in line with our expectations
- FY21 revenue grew by 21% y-o-y to US$1,208m on higher throughput and ASP
- Final dividend of c. HK 17cts declared, bringing full year payout to c. HK 33.5cts (40% payout ratio).
- Positive outlook driven by steady throughput growth and firm container handling tariff increases
- We currently have a BUY rating with TP HK8.40.
Results Summary
FY20 | FY21 | y-o-y change (%) | |
FYE Dec | |||
Revenue (US$m) | 1,000.6 | 1,208.3 | 20.8% |
Gross profit (US$m) | 232.6 | 325.2 | 39.8% |
Attributable profit to shareholders (US$m) | 347.5 | 354.7 | 2.1% |
EPS (US cents) | 10.70 | 10.81 | 1.0% |
Attributable profit to shareholders (excluding one-off items) | 269.0 | 332.5 | 23.6% |
EPS (US cents) (excluding one-off items) | 8.37 | 10.03 | 19.8% |
Firm operating results in line with expectations
Revenue increased by 20.7% YoY to US$1,208m; gross profit increased by 39.8% YoY to US$325m
Profit attributable to equity holders (excluding one-off items) was US$332.5m, a YoY increase of 23.6%
Total throughput from terminals in which the Group has controlling stakes increased by 4.7% YoY to 23.3m TEU; throughput from the Group’s non-controlling terminals increased by 4.4% YoY to 105.9m TEU
Positive outlook underpinned by tariff rate increases
The company expects that its equity throughput volume growth will be in line with that of the industry, which we project to be in the mid-single digit range
The key driver for 2022’s earnings growth should come from container handling tariff increases, where major ports such as those in Ningbo, Guangzhou, Xiamen and Tianjin have announced a 10%-19% increase in published rates.
As a result, we expect the company to be able to achieve a double-digit increase in revenue and improvement in margins to drive stronger profitability and ROE in FY22.
We maintain our BUY call. The stock is currently trading at less than 0.4x P/B and offering 5.5% dividend yield.