The ultra-low valuation unseen in 30 years, Graham will cry when he sees it. In the third quarter, the cash on the account was 297.3 billion, and the interest-bearing debt was 65 billion (about one-third of which was borrowed by the subsidiary COSCO SHIPPING Ports. The port business can be responsible for its own profits and losses), the market value of H-shares after the mid-term dividend is 90.8 billion yuan, and it is expected that the market value will only be 67.3 billion yuan after the dividend is distributed in the 22nd annual report, and the market value is much lower than the net cash value. Low, the future net operating cash flow will be higher than the investment cash flow for a long time, and the cash will continue to increase. A company that has not even given the past cash flow valuation.
The end-to-end business, growth and cycle are only part of the enterprise value. The main business of Haikong is only the port-to-port shipping segment. The end-to-end is a one-click door-to-door pickup and then includes the door-to-door service, and the business on land. , including customs declaration, logistics, a series of warehousing business, etc. The logistics value of this piece will be much larger than that of the shipping section. After scale, the whole transportation efficiency and service experience will be improved, which is the creation of two-way value between customers and the company.
The reshaping of the business model brought about by excess profits. The collection industry used to be a high-leverage and asset-heavy industry. In order to continuously increase the scale and maintain competitiveness, there is no principal, so it can only expand through interest-bearing financing. This industry used to be completely leased. Companies and banks work part-time (making money and paying interest), but after experiencing the explosion of cash brought by this excess income, not only can they fully cover interest-bearing liabilities, but also have a lot of cash for end-to-end, digitalization, etc. to widen the moat, sea, land and air. The integrated business of the entire logistics industry chain and the reshaping of the balance sheet have given the industry new vitality.
In the past 30 years, the industry concentration has been continuously improved, and the alliance of large ships has increased the barriers to entry. In 2020, the industry’s cr4 exceeded 50% for the first time. After the existing structure of the alliance was formed in 2017, the industry experienced the Sino-US trade war, and the initial demand for the new crown fell off a cliff, which did not happen. loss for the year. The capital barrier of large ships is too high, and small ship companies cannot enter, and the cost advantage of large ships is significant. The alliance is not a monopoly alliance of freight rates, but an alliance of investment barriers. Because the operation mode of container transportation is similar to that of buses, a group of 10-12 ships is required to operate a route. The investment of a single shipping company will be very large, but the members of the alliance can stipulate Each company invests in several operating routes together, reducing their respective inputs, reducing oversupply and operating pressure. Alliance is a barrier to small shipping companies.
Cost advantage, the main source of the cost gap in the centralized shipping industry is the ship leasing price. The rental price of the industry has skyrocketed under the booming industry. When competitors are still buying second-hand ships at high prices and leasing ships at high prices, COSCO SHIPPING Holdings has the highest rate of self-owned ships in the industry. The highest shipping company has carried out a large number of lease cancellations at the high point of the boom. COSCO SHIPPING Holdings is the company with the lowest cost among the shipping companies.
The freight rate center will move up. In the first half of 2020, the new crown epidemic caused a sharp drop in demand, and the industry took the initiative to suspend shipping to insure the price. There was no loss in the first half of the year. After experiencing this big price increase, cargo owners are more accepting of freight rates. As China exports more and more high value-added commodities, the sensitivity to freight rates decreases and the service requirements increase. We can also see the recent freight rates in Southeast Asia. After falling to a negative value, the one-time rebound broke through the highest point before the epidemic, and the upper limit of freight rates was raised, and the increase of the upper and lower limits confirmed the upward movement of the freight rate center.
Benefiting from the trend of high value-added made in China, when Chinese commodities are constantly changing from low value-added to high value-added, due to the low ratio of container freight to the value of goods, the value of services for cargo owners will be more and more than the freight rate. The level is more important, and the profit margin of COSCO SHIPPING Holdings will also increase accordingly.
The ultra-high dividend rate is not a flash in the pan. The company has determined a new three-year return plan one year in advance during the interim report period, which is 30-50% of the consolidated net profit attributable to the parent. However, considering that the company has a large amount of cash, the distribution will be highly likely. 50% will be distributed. If the expected net profit is 30 billion next year, the dividend of 15 billion will be distributed, and the expected dividend rate in 23 years will also exceed 20%. The average annual profit in the next 5 years will be maintained at around 30 billion. Return this year.
COSCO SHIPPING Holdings H shares have the most iron-clad shorts in the world. Their degree of iron-headedness will make your jaw drop. Value investing has a way to make more money through dividends and reinvestment. Shorts will help you speed up the process :). After deducting the shares held by Southbound and major shareholders, the highest probability of being able to borrow securities is only 1.8 billion shares, and the current short-selling volume is estimated to be 500 million shares, and the short-selling ratio is not lower than the recent H-share CanSino. Judging from the daily trading volume of h-shares, it is very difficult for shorts to close short-term positions. They are not friends of time. When the catalyst comes, the fireworks of shorts must be very bright.
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