Editorial Department of this magazine | Hu Jingling
In the shipping sector, the stock price of the container company has soared due to the surge in container prices; and since this year, the oil transportation price has increased significantly, which has promoted the leaders of oil transportation. From the performance perspective, looking at the beginning of next year, it is highly likely that the performance of leaders in the oil operation industry and the syndicate operation industry will continue to grow.
Since this year, the "freight rate rise" market in the shipping sector has continued to take place, but this time it has been rotated from the direction of collection transportation to the direction of oil transportation. In contrast to the signs of hot oil and gas transportation, the container freight index has fallen for many consecutive weeks, and pessimism in the container transportation sector has spread. A recent report from the HSBC Global Research Center predicts that container shipping will experience an inevitable downward cycle between 2023 and 2024, with profits plummeting by 80%.
However, professional investors told Red Weekly that the leader of the shipping company in the integrated transportation sector has a high proportion of orders, which will guarantee its annual performance growth. Some optimistic people pointed out that this year is the first year for the new improvement in the joint operation industry.
| Organization sector stock price and revenue rise LNG freight rate exceeds US$100,000 and still has a hard time finding |
In the maritime industry sector, which consists of several major categories such as oil transportation, dry bulk transportation and container transportation, the oil operation industry is currently at the forefront. The reasons include the growth of demand and the impact of the "black swan" event in the energy industry.
According to the International Energy Agency (IEA) estimates that the world oil demand for the whole year will be 99.7 million barrels per day, a year-on-year increase of 3.3%, and will increase to 100 million barrels per day next year. While total demand increases, oil transportation distances are getting longer. Affected by the "Russia-Ukraine conflict", Europe is expanding oil imports in the Middle East , India and other regions, resulting in a significant increase in the distance between oil sea transportation trade. Correspondingly, as of September 29, the refined oil transportation index (BCTI)/crude oil transportation index (BDTI) was at a high level, closing at 1184/1484, an increase of 75.41%/105.54% year-on-year compared with the beginning of 2022.
In the A-share oil transport sector, COSCO Shipping has the world's most complete tanker fleet, with the largest capacity scale. At present, the company's tanker transportation business accounts for 91.8%, with 49 VLCCs (extra-large tankers) ships, with a total of 15 million dwt; 11 VLCCs are rented, with a total of 3.31 million dwt; 5 Suez types are owned, with a total of 790,000 dwt; 9 Alfra types are owned, with a total of 1 million dwt. is the China Merchants Steamer and China Merchants Nanyang Oilfield.
"Red Weekly" observed that with the sharp increase in oil freight rates, the revenue of oil freight leaders maintained a good growth. It is understood that as of the first half of the year, COSCO Shipping achieved revenue of 7.513 billion yuan, a year-on-year increase of 22.85%; China Merchants Steel achieved revenue of 13.727 billion yuan, a year-on-year increase of 32.25%; China Merchants Nanyang Oil achieved revenue of 2.55 billion yuan, a year-on-year increase of 35.1%. In terms of net profit, COSCO Shipping's net profit attributable to shareholders decreased by 70.8% year-on-year, China Merchants Steel Corporation increased by 105.99% year-on-year, and China Merchants Nanyang Oil Corporation increased by 107.9% year-on-year. The gross profit margins of these three companies were 4.1%, 24.03% and 22.95% respectively.
Because fuel costs account for a large proportion of the main costs of oil transportation companies, and fuel prices are indeed continuing to rise, some companies said that the company's increase in revenue but not profits are mainly affected by high-priced fuel.
However, even if the cost is increasing, the dividends of the oil operation industry are still certain. Guohai Securities analyst license pointed out in its research report that the intensity of this year's peak oil transportation season may exceed expectations. EU embargo on Russian crude oil and refined oil will occur on December 5 this year and February 5 next year respectively, when larger route switching is expected to begin; the intensified regional imbalance between global oil supply and demand has brought about new trade demand. In the next two years, the supply and demand relationship between oil transport ship types will get better and better, and the possibility of extreme upward freight rates will become increasingly greater. Guotai Junan research report also pointed out that it is optimistic about the certain recovery of the oil transportation market in the next two years.
In addition to the explosion of the oil transportation market, the demand for shipping natural gas is also increasing. On September 27, a strong underwater explosion occurred in the leaked area of the "North Stream" natural gas pipeline, and it is unpredictable when gas supply will be restored. Affected by this news, the market is worried about the prospects for natural gas in Europe, and the European natural gas benchmark Dutch TTF natural gas futures jumped sharply by more than 20%.
According to a report released by the LNG freight price evaluation agency SparkCommodities in mid-August, ship owners scheduled that the daily rental fee for LNG ship has risen to US$105,300 from mid-September to mid-November this year, an increase of 124% year-on-year, setting a record high. Even if the freight rate hits a high level, it is still difficult to find a ship in the LNG ship market. The report said that the number of ships available is now drastically reduced as traders book LNG ships in advance to handle natural gas delivery. The daily rental prices of some floating oil storage tankers have soared to $200,000, more than double the number of those in early 2021.
Based on current natural gas prices and shipping rates, FlexLNG (FLNG.US) estimates that a ship (172,000 cubic meters) of US LNG can be shipped to Asia and earn $204 million in arbitrage profit; shipped to Europe can bring $201 million in profit. Benefiting from the continued rise in LNG shipping fees, LNG shipping operators' performance has exploded and made a lot of money in the second quarter of 2022. Taking FlexLNG as an example, the company's net profit in the second quarter increased by 247% year-on-year to US$44.26 million.
"Red Weekly" sorted out the business layout of listed companies and found that COSCO Shipping participated in the investment of 49 LNG ships, of which 38 LNG ships have been put into operation, with a transportation volume of 6.42 million cubic meters; 11 LNG ships under construction, with a transportation volume of 1.91 million cubic meters. However, the LNG transportation sector accounts for a small proportion of China COSCO Shipping Energy's revenue composition, with revenue in the first half of this year reaching 612 million yuan, accounting for 8.2%, contributing net profit attributable to shareholders of 383 million yuan, an increase of 41 million yuan year-on-year.
htmlOn September 27, China Merchants Shipping stated at the performance briefing that the growth of LNG transportation demand is the general trend. More than 80% of LNG Shipping currently exist in the form of long-term locked projects. The company has regarded LNG business as an important strategic development direction and plans to develop it as an important business pillar. Specifically, the cargo volume of China Merchants Shipping Company's LNG fleet in the first half of this year was 12.879 million tons, an increase of 9.7% year-on-year. At the same time, the company is increasing its investment in LNG ships. On September 25, China Merchants Steel announced that the company ordered two large liquefied natural gas (LNG) transport ships of 1,000 cubic meters from , and China Shipbuilding Trade. The total price is US$400 million, and the delivery time is in the second half of 2026.
| House transportation sector is not prosperous in peak season Zhongyuan Haikong performance left stock price performance right |
Compared with the oil transportation sector, the container transportation sector is spreading pessimism, which is also reflected in the stock price of Zhongyuan Haikong, the leader in the transportation sector. In the first half of this year, China COSCO Shipping achieved operating income of 210.785 billion yuan, a year-on-year increase of 51.36%; and achieved net profit attributable to shareholders of 64.722 billion yuan, an increase of about 74.46%. However, the company's stock price closed at 11.08 yuan as of September 29, a cumulative decline of 40.72% compared with the beginning of the year, and has been cut in half since the high in July last year.
htmlOn September 27, Furui released a research report saying that the market is concerned that global container freight rates are close to bottoming, which may lead to continued pressure on shipping stock prices, and it is also predicted that freight rates will still be difficult to bottom out in the next few weeks. Guohai Securities analyst Xun said in the research report that for trans-Pacific routes, demand and prices continue to decline, and the number of blank flights increases. The US line market in September showed a lack of peak season. Before the National Day holiday, there was no peak in shipments like last year, and spot freight rates and demand were relatively weak. Data from the Shanghai Shipping Institute shows that on September 23, the latest Shanghai Export Container Freight Index (SCFI) was 2072.04 points, down 10.4% from the previous period, which has been the 15 consecutive weeks of decline in the index.
Investor @分网址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大学发址大Now, with the birth of vaccines and special drugs and the normalization of epidemic prevention and control, the global supply chain has gradually recovered, and the supply side of transportation capacity is increasing, while the demand side is very weak due to the slowdown in global economic growth. supply has increased, demand has weakened, and the era of oversupply and overcapacity in the collective transportation market has arrived.
According to a research report by Founder Medium Futures , in the third quarter of this year, global container capacity increased by 3.9% year-on-year, at the medium level in the past seven years, but demand was sluggish, and the capacity idle rate hit a peak in the past five years. What’s even more serious is that a Sea-Intelligence report shows that an additional 4.5 million to 4.8 million TEU of containers is expected to be delivered in 2022, and by 2023, there will eventually be a surplus of 13 million TEU in the container transportation market.
From the freight rate, since the record high in March this year, container shipping prices from Shanghai to California on the west coast of the United States have fallen by no less than 49%.
However, professional investor Wang Jiaxin emphasized to Red Weekly that in fact, COSCO has never suffered any losses since its reorganization in 2016. After reorganizing and divesting dry bulk and other businesses, it became a new company that mainly focuses on the transportation of transportation business - COSCO Ocean Control. Companies with pure transportation as the main business mainly transport daily necessities and finished products, it is difficult to suffer losses. Referring to Maersk Transport and Oriental Overseas International, there have been only one or two losses in a century, which means that pure transportation is difficult to suffer losses unless there is an extreme situation such as financial crisis and economic crisis. The outside world's understanding of COSCO Ocean Control is still in the China Ocean Control era. At that time, China Ocean Control was a company that combines dry bulk cargo, transportation and oil transportation businesses, and is not a pure container transportation company.
Professional investor @海后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后后�
| This year is the first year of the Shipping Shipping Department Long-term cooperation and body protection to ensure the performance growth of shipping companies |
It should be noted that although the prices of shipping companies have been falling continuously, the performance of the leading stock transportation sector seems to be not much affected. In response to this, @分号号 means that the reason is the long-term contract price. He pointed out that COSCO Shipping signed a large number of high-priced long-term contracts from the second half of last year to the first half of this year, which is its performance guarantee for the first half of this year. However, as the prices of the stock market continue to fall, the long-term contract price and spot price are seriously inverted, and the pressure to fulfill the contract is relatively high, and customers are likely to ask for renegotiation to determine the freight price. He believes that this means that China COSCO Shipping's profit margin will be compressed and its expectations of continued performance will also be disappointed.
However, Wang Jiaxin's prediction is much more optimistic. He told Red Weekly that from the end of last year to the beginning of this year, the high-priced long-term contracts locked by COSCO Shipping (fixed long-term contracts account for more than 50% of the fixed-priced long-term contracts) can still protect its profits until the one-year long-term contract expires in May 2023. As of now, the long-term contract performance rate is still acceptable, and customers pay more attention to supply chain security and stability, and the price is still there.
Wang Jiaxin pointed out that COSCO Shipping and its subsidiary Orient Overseas, as the world's leading liner company, have dock layouts around the world, enjoy priority berthing rights, and can also provide better services to customers. About half of the long contracts of US Line are bound to end-to-end, so the cost of default for customers is high. This year, US Line signed the contract. The entire contract process of Haiping Control has reviewed the qualifications and credit of the shippers for three rounds, and scored the past performance history and situation. European and American major customers attach more importance to reputation and contract spirit, and the overall impact of domestic customer defaults is not great. In addition, COSCO Overseas Control accounts for about 10% of the 2-3-year high-priced long-term contract. Before the signing season in May this year, many American giants signed 3-year contracts. These large customers have good contract spirit and have had many years of cooperation, which can guarantee certain basic profits for the past year in the past year in the past year.
Regarding the future performance of shipping companies, Mr. Luo, an insider in the transportation industry, used the US market as an example to analyze, "If you think that the profits of shipping companies in 2021 are high, in fact, 2022 is the first year of shipping companies, which has a lot to do with the profit composition and source of shipping companies." From the US line perspective, a complete contract period is from May to April of the following year. The contract price of the 2021 US line January to April of the contract period is still used in May 2020. The contract price of this contract is very low compared with the subsequent market spot price. This means that from January to April 2021, in terms of US lines, the profits of shipping companies are actually not high, and most of them are relatively low contract prices. The spot price of the market did not start to rise until June 2021. In other words, the profit-making effect of shipping companies in the first half of 2021 is actually not very eye-catching, and it only began to rise sharply in the second half of the year. By 2022, whether it is the contract price or the market spot price, the price is at least twice as high as January to April 2021, because the contract price signed in May 2021 was much higher than the same period in 2020. Until April this year, the new contract price signed in May 2021 has been used. If you use the spot price in the market to place a position, the spot price will continue to be the high level that began last year.
Mr. Luo said that starting from May this year, the new contract price has begun to be executed again, with the price being 50% to 100% higher than the contract price in 2021. This part is the guarantee of the profits of shipping companies. "The profit this year is still likely to be higher than last year."
In recent research activities, Xiao Junguang, secretary of the board of directors of China COSCO Shipping, said that in the expectations of the second half of the year, the subsequent market may show a situation where the peak season is not strong and the off-season is not light. The signs of this year's peak season are not very obvious, which is related to the return of some effective transportation capacity to the market in the early stage. But at this stage, demand is at a relatively low point this year and is expected to rise in the future.
(This article has been published in "Red Weekly" on October 1. The article mentions stock for example analysis only and does not make recommendations for trading.)
