Original title: A shot hits a high prosperity cycle! A shares oil transportation sector is collectively restless, and China Merchants Nanyou rose 200% in half a year: Why did the "war beneficiary stocks" choose it?
Russia-Ukraine war is the direct fuse for the oil industry to enter a high prosperity.
Author | Rolland
edit | Xiaobai
The Russian-Ukrainian war escalated comprehensively, and the A-share oil transportation sector rose against the trend
https://www.sub.com/subsidy/ The mobilization order is expected to recruit 300,000 reserve citizens to participate in the war, and the service period will be extended indefinitely before the end of some military mobilization.
Coincidentally, it was also on September 21 that the A-share oil transportation sector rose against the trend. For example, China Merchants Nanyang Oilfield, China COSCO Haining, China Merchants Steamship , etc.
Recently, A-share The market is not good (in fact, the stock markets of all countries around the world are not good), but some sectors and individual stocks are not only very resistant to declines, but even directly counterattacked a bull market with a time span of up to half a year.
Take China Merchants Nanyou as an example. The company's stock price started an upward trend as early as April this year, and it rose twice in less than half a year. Other related stocks in the oil transportation sector also have similar trends.
So, if you buy the wrong stock, the bull market is also a bear market; if you buy the right stock, the bear market is also a bull market; if you don’t use Market value rush APP, you don’t know what right or wrong is.
(China Merchants Nanyou Week K-line. Source: Market Value Fengyun APP for Registration-based Stock Exchange Software)
State-owned enterprise backed by China Merchants
Next, Fengyunjun will focus on analyzing the fundamentals of China Merchants Nanyou, the market expectations and investment logic behind it, and see if the company's rise in this round of market conditions has performance support and whether there is a relatively hard-core logical support.
China Merchants Nanyou, the full name of China Merchants Nanjing Oil Transportation Co., Ltd. China Merchants Group , I believe everyone has heard of this. It is a super-large central enterprise directly under the central government with strong capital strength and a wide business scope.
China Merchants Group was established in 1872 during the Western Movement period. Its founder was a senior official of the late Qing Dynasty Li Hongzhang .
China Merchants Group's predecessor was Shipbuilding Group . It started out with its ship transportation business. It was the first ship transportation company in modern Chinese history and a pioneer of China's national industry and commerce.
Currently, China Merchants Group covers many fields such as finance, real estate, insurance and ports. China Merchants Nanyou is only a state-owned enterprise under China Merchants Group that specializes in tanker transportation business.
Here I will briefly explain what tanker transportation is.
Oil tanker is a common name for oil tankers. It is a narrow sense of the word "liquid cargo" transport ship that specializes in carrying crude oil and refined oil. In a broad sense, it refers to a ship that transports various oil types. In addition to crude oil and refined oil, animal and vegetable oil, liquid natural gas and petroleum gas , etc., they can all be counted.
Originally, China Merchants Nanyou was listed as early as 1997, but due to years of losses, it was terminated by on the Shanghai Stock Exchange in 2014.
Starting in 2015, the company has carried out a series of restructurings, divesting the loss-making VLCC (super-large tanker) business, and relisted on the A-share market in 2019.
In March 2022, China Foreign Transportation Changhang Group transferred all its shares to China Yangtze River Shipping Group for free. China Yangtze River Shipping Group became the company's new controlling shareholder. The actual person of the company is still China Merchants Group, and the final controller is State-owned Assets Supervision and Administration Commission of the State Council .
(Source: China Merchants Nanyou 2021 Annual Report)
Far East region, the first place in refined oil transportation, and the second place in domestic crude oil transportation
China Merchants Nanyou is a transportation service provider, mainly small and medium-sized boats and liquid cargo.
The company's core business is the transportation industry. In 2021, the company's transportation industry revenue reached 3.289 billion yuan, accounting for as much as 85% of the company's operating income.
According to the type of product transported by the company, the transportation industry can be divided into oil products, chemicals and gas transportation. In 2021, the company's oil transportation revenue accounted for as much as 74% of the company's operating income, so the oil transportation business is the focus of analysis.
Oil product transportation business can be further divided into two categories: refined oil transportation and crude oil transportation.
First look at the transportation of refined oil.
refined oil is a petroleum fuel and other products processed by crude oil through refining plants, mainly including gasoline, diesel, kerosene, etc. The downstream of refined oil transportation is the consumer end, such as the automobile industry and the aviation industry; the upstream is crude oil refining, and the upstream is oil field mining and crude oil transportation.
The process of the industrial chain can be simplified to: oil field mining-crude- crude oil transportation-crude- refined oil transportation-automotive and aviation.
China Merchants Nanyang Oil Corporation is China's largest MR oil tanker owner. MR tanker refers to medium-sized refined oil tankers, specially used to transport refined oil. The capacity of an MR tanker is between 25,000-55,000 denominator.
's MR fleet mainly covers the domestic and Far East regions. Among them, the domestic business areas are mainly coastal ports and the downstream trunk section of the Yangtze River ; the foreign business areas mainly include Northeast Asia , Singapore and Australia routes. In the United States, Mediterranean and Baltic regions, the company only provides very little capacity.
Currently, China Merchants Nanyou is the largest refined oil transportation service provider in the Far East (based on capacity scale).
(Source: China Merchants Nanyou 2021 Annual Report)
Crude oil transportation, China Merchants Nanyou's domestic capacity routes mainly cover Bohai Bay area, Haijinjiang, Yangtze River Estuary , Ningbo and Zhoushan and other areas. Like foreign trade crude oil transportation, it is mainly aimed at Southeast Asia, Northeast Asia and Australia.
It should be noted that the domestic crude oil transportation market is very different from that of foreign countries: international and domestic refined oil transportation, as well as international crude oil transportation, are both relatively competitive markets; the domestic crude oil transportation market is a bit special.
Domestic crude oil transportation implements an access system. Only shipping companies approved by the Ministry of Transport of China can engage in crude oil transportation business in China.
In the domestic crude oil transportation market, only a few players are allowed to participate, which is basically an oligopoly pattern. China Merchants Nanyang Oil Corporation is one of them, and the company's crude oil capacity scale can rank second in the country.
not only cannot fully compete, but domestic crude oil freight rates and capacity are also often regulated by regulatory authorities. Therefore, the freight rate level of domestic crude oil transportation is generally relatively stable and there will be no large fluctuations.
(Source: China Merchants Nanyou 2021 Annual Report)
The above reasons lead to a phenomenon: the trends of international refined oil freight rates and international crude oil freight rates are basically the same, but the trends of domestic refined oil freight rates are not consistent with the trends of domestic crude oil freight rates.
The following two figures show the 2021 Baltic crude oil freight index (BDTI) and the Baltic refined oil freight index (BCTI). The trend curves of the two are almost the same.
According to data released by the Ministry of Transport, the average value of China's coastal inter-provincial crude oil freight index in 2021 was 1542 points, a slight drop of 0.6% year-on-year. The freight rate level remains basically stable. The average coastal refined oil freight index during the same period fell 7.4% year-on-year. There are obvious differences between the two. In terms of capacity, as of the end of the first half of 2022, China Merchants Nanyang Oil Corporation owned and controlled 61 ships, totaling 2.24 million deadweight tons.
(Source: China Merchants Nanyou 2022 semi-annual report)
Domestic trade performance is stable and the gross profit margin is high; foreign trade performance fluctuates greatly, and the gross profit margin is low
China Merchants Nanyou's performance should be distinguished by domestic and foreign trade, because the market environment faced by domestic and foreign trade is different. Domestic trade business is less affected by global economic development, geopolitical conflicts, etc.
The company's foreign trade business revenue increased from 1.72 billion yuan in 2018 to 1.94 billion yuan in 2019, and then began to decline to 1.62 billion yuan in 2020. It further declined to 1.19 billion yuan in 2021.
is in sharp contrast with foreign trade business. The company's domestic trade business revenue continued to steadily increase from 1.66 billion yuan in 2018 to 2.67 billion yuan in 2021. The CAGR during the period was 17.2%, and the growth rate was OK.
Foreign trade business revenue performed poorly, mainly because the freight rates of international refined oil continue to decline.
(Source: China Merchants Nanyou Annual Report)
The gross profit margin of domestic trade business is also higher than that of foreign trade business. From 2018 to 2020, the gross profit margin of foreign trade business increased from 16.3% to 32.1%, and the gross profit margin of domestic trade business increased from 22.3% to 36.9%.
In 2021, the gross profit margins of domestic and foreign trade businesses declined sharply at the same time. Among them, the gross profit margin of foreign trade business fell by 23 percentage points, while the gross profit margin of domestic trade business fell by only 15 percentage points.
(Source: China Merchants Nanyou Annual Report)
From the changes in gross profit margin, it can also be seen that the elasticity of foreign trade business is indeed greater than that of domestic trade business.
In fact, foreign trade business can reflect the tanker transportation market under a fully competitive state. A series of domestic industrial policies have to a certain extent stabilized the volatility of domestic trade business performance.
The company's gross profit margin is generally determined by two factors. One is the freight rate, the other is the fuel cost of the transport ship, that is, the oil price. The company's gross profit margin declined sharply in 2021, mainly because the oil price rose too sharply. (Note: There is no necessary correlation between freight rates and oil prices.)
In 2021, the annual averages of the closing prices of WTI and Brent crude oil futures were US$68/barrel and US$71/barrel, respectively, up 72.2% and 64.3% respectively from 2020.
(Source: China Merchants Nanyou 2021 Annual Report)
The soaring oil price has dragged down the company's gross profit margin, especially the gross profit margin of foreign trade business. Affected by this, the company's net profit margin also suffered a sharp decline. The net profit margin in 2021 was only 7.9%, directly falling to the level before 2018.
(Source: Choice Data)
The company's net profit fell to 305 million yuan in 2021, lower than 364 million yuan in 2018. The fluctuations are really huge. Once the industry cycle fails, it is "returning to before liberation overnight."
(Source: Choice data)
Profit doubled in the first half of the year! Since the investment of the veritable "war beneficiary stock"
is an investment expectation, at present, the main factor affecting the company's performance in 2022 is the energy crisis caused by the Russian-Ukrainian war .
According to the company's 2022 semi-annual report, China Merchants Nanyou has been confirmed to be a "war beneficiary stock": its operating income in the first half of this year increased by 35% year-on-year, and its net profit attributable to shareholders rose by 108%.
(Source: China Merchants Nanyou 2022 semi-annual report)
As mentioned earlier, the company's foreign trade business is very elastic, and the spillover effect of the Russian-Ukrainian war directly affects the company's foreign trade business. The same is true for
. Whether it is the Baltic crude oil freight index (BDTI) or the Baltic refined oil freight index (BCTI), they all rose rapidly after the outbreak of the Russian-Ukrainian war.
(Source: China Merchants Nanyou 2022 semi-annual report)
(Source: China Merchants Nanyou 2022 semi-annual report)
The increase in international crude oil and refined oil freight rates has caused the company's gross profit margin and net profit margin in the first half of the year to rebound rapidly.
(Source: Choice data)
China Merchants South Oil believes that the outbreak of the Russian-Ukrainian war is the direct fuse for the oil industry to enter a high prosperity. The same is true for Fengyunjun's views.
Why is the spillover effect of the Ukrainian Russian War so great?
However, Fengyunjun still wants to further discuss the particularity of the Russian-Ukrainian war.
The outbreak of the war usually exacerbates the tension in energy supply, but the Russian-Ukrainian war can cause such a major disturbance to many industries such as oil, shipping, food, chemicals, etc., which is behind it.
Fengyunjun believes that compared with general wars, the Russian-Ukrainian war has the following three special features.
First of all, both sides participating in the war are not simple.
needless to say, Russia is one of the five permanent members of the United Nations, a nuclear-capable country. It has the largest land area on the earth and has a population of nearly 150 million. Ukraine is the second largest European country after Russia, with a population of 40 million.
In terms of population and land area, Ukraine and Russia are both large-scale countries. More importantly, Russia and Ukraine occupy a very important position in international oil, gas and grain markets.
(Source: China Merchants South Oil 2022 semi-annual report)
Before the war, Russia was the main supplier of European energy, the world's largest oil exporter, and the second largest crude oil exporter after Saudi Arabia . Russia is also the world's largest natural gas exporter.
, and Ukraine is known as the "European granary" and was the second largest grain exporter in the world before the war. According to data from the Ministry of Economic Development, Trade and Agriculture of Ukraine, from 2019 to 2020, Ukraine ranked second in the world in barley exports, fourth in the world in corn exports, and fifth in the world in wheat exports.
Russia and Ukraine have a significant impact on the global economy. The fight between these two countries will definitely affect the supply and demand balance of the global energy industry and the food industry.
followed by the large scale of the war.
At the beginning of the war, Ukraine issued a national military mobilization order, and the entire country entered a state of wartime military control. Russia has also issued a mobilization order to recruit 300,000 reserve soldiers. Previously, Russia invested 250,000 to 300,000 troops, and the Russian troops directly entered Ukraine had about 150,000.
The third is that trade sanctions intensify energy supply tightness.
European and American countries impose oil embargo on Russia, while Russia responds to sanctions by stopping energy supply.
Originally, war is likely to lead to tight energy supply. This is good. Now that trade sanctions are added, energy will become even more scarce, especially in European countries.
So which regions are most likely to make up for the oil gap in Europe?
See a European oil import structure diagram in 2021, as shown below. Europe's largest oil importing country (region) is Russia, which ranks behind Russia, namely Africa, the Middle East, and North America .
The most unlikely here is North America, especially the United States, because the United States' own oil reserves are also very tight.
After Russia was sanctioned, Europe turned to the United States to import crude oil and refined oil. But with the surge in exports in the United States, U.S. inventory has also decreased significantly. In September, U.S. Oklahoma Cushing crude oil inventories were 24.8 million barrels, down 28.9% from the beginning of 2022 (as shown in the figure below).
The current level of oil inventories in the United States is at a historical low.
Only considering the distance, Europe is most likely to look for oil supply from Africa and the Middle East. At present, China Merchants South Oil is mainly engaged in the transportation of refined oil in the Far East. It is hard to say whether Europe will increase its purchase of oil in the Far East.
, and the previous article also mentioned that China Merchants Nanyang Oil's international transportation capacity rarely involves the United States and continental Europe.
But it is certain that whether Europe purchases oil from Africa, Middle East , or Far East , compared with previous routes, the distance between transportation must have changed from short to long.
The increase in long-distance routes has led to an increase in global oil transportation distances, which directly stimulated the market demand for oil tankers.
This is to analyze the reasons for the increase in freight rates from the demand side.
(Source: China Merchants Nanyou 2022 semi-annual report)
Supply side, Russian shipping companies are subject to sanctions, and there is a certain gap in global capacity; the production cycle of tankers is relatively long, and tanker supply is difficult to respond to rapidly growing demand in a short period of time.
On the one hand, demand is increased, while tanker supply cannot keep up, freight rates will naturally rise.
The question now is: How long can the high prosperity of the oil industry last? Can freight rates continue to rise?
To answer these questions, the key is to continue to track the energy crisis in Europe and the progress of the Russian-Ukrainian war.
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