APQP表单1

AsiaPacificChinaConglomerates29October2004Ports:thebrightspotBenjaminLo,CFA(852)[e-mail],CFA(852)[e-mail]-termstructuralgrowthstory;toppickisCOSCOWeareverypositiveonChina'scontainerportsector,whichisstillunder-developedandonasustainablelong-termuptrend.Capacitygrowthisalsolikelytofallshortofdemand.Portoperatorswithcarrierpartnership,geographicaldiversificationfocusingonhub-ports,andanearly-moveradvantagewillemergeasthewinners.BuyCOSCO.DeutscheBankAGDeutscheBankdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Thus,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.DISCLOSURESANDANALYSTCERTIFICATIONSARELOCATEDINAPPENDIX1ChinaContainerPortSectorIndustryStrategyToppicksCoscoPacificBuyKeychangesNACompaniesfeaturedCoscoPacificBuy2003A2004F2005FP/E(x)14.917.813.4EV/EBITDA(x)9.212.510.5Price/book(x)2.12.42.2ChinaMerchantsHold2003A2004F2005FP/E(x)10.913.514.5EV/EBITDA(x)11.724.428.6Price/book(x)1.71.91.8ShanghaiPortBuy2003A2004F2005FP/E(x)21.520.115.0EV/EBITDA(x)11.39.97.9Price/book(x)4.33.53.0Demandoutpacingsupply18222735437181894957797365141922304940590102030405060708090100199920002001200220032004F2005F2006F2007F2008F(mTEUs)CapacityThroughputThroughputCagr=17%(2003-08F)vs.CapacityCagr=13%Source:ChinaPortsYearbook,DeutscheBankAGestimatesTargetpricesStock(asat25Oct04)PriceTargetUpsideCOSCOPacific(HK$)13.1014.8513.4ChinaMerchants(HK$)10.9510.90-0.5ShanghaiPort(RMB)15.5517.3211.4UpcomingeventsDateHongKong/China:CEPA&TourismCorporateDayHongKong12Nov2004RelatedrecentresearchDateCOSCOPacific-Interimresultsconfirmpositiveoutlook;maintainBuyBenjaminLo,CFA08Sep2004ChinaMerchants-Strongnear-termearningsbutgrowthslowing;maintainHoldBenjaminLo,CFA06Sep2004ConglomeratesAlert-Shenzhenportdevelopmentfees-favourCOSCOoverMerchantsBenjaminLo,CFA10Sep2004TableofcontentsDemandforChinacontainerports..................Page04Supply-laggingbehinddemand......................Page14Pickingthelong-termwinners..........................Page20Otherindustrytrends.......................................Page26Companysection..............................................Page30GlobalEquityResearchIndustryFocusDemandunderpinnedbylowcontainerisationrateandFDIinflowsWeestimateChina’scontainerisationratetobejust36.9%in2002,wellbelowtheglobalaverageof59%in2001.China’scontainerthroughputshouldcontinuetooutperformnationalexportgrowthuntilthemaximumcontainerisationrateisreachedin2013F.CoupledwithcontinuedFDIinflows,demandforChina’scontainerportsshouldremainonanuptrend.China’sincreasingsignificanceintheglobalcontainermarketHavingpostedaremarkable31%Cagrduring1995-03,weforecastChina’scontainerportthroughputtocontinuetogrowbyanother17%Cagrduring2003-08F.ThisshouldallowChina’sshareofglobalcontainerportthroughputtorisefrom16%in2003to25%in2008F.WithinChina,wethinkportsintheBohairegionofferthemostupsidepotential.SupplygrowthtolagbehinddemandrequirementsWeforecasttotalcapacitytoposta13%Cagrduring2003-08,whichisslowerthanourexpecteddemandgrowth.Sinceanyfurthernewprojectswillbecomeoperationalin2007Fattheearliest,thesupplygapin2005-06Fislikelytobefilledbyefficiencyimprovements.Thisshouldfavourportoperatorswithhub-portexposureandbetteracquisitioncapability.StockselectioncriteriaandrisksWelikethoseportoperatorswhichhavecarrierpartnerships,diversifiedportportfolioswithafocusonhub-ports,andanearly-moveradvantage.Inourview,COSCOhasalltherightingredientsforlong-termsuccess.ShanghaiPortandChinaMerchantsarelikelytoremainasstrongregionalplayers.Thekeyriskisglobaleconomicstagnation.Figure1:AttributablethroughputofmajorportoperatorsinChina024681020002001200220032004F2005F2006F(mTEUs)HutchisonPortHoldingsShanghaiPortCOSCOPacificChinaMerchantsAPMTerminalsP&OPortsSource:DeutscheBankAGestimates,Companydata29October2004ConglomeratesChinaContainerPortSectorPage2DeutscheBankAGFigure2:MajorportsandportoperatorsinChinaSource:DeutscheBank29October2004ConglomeratesChinaContainerPortSectorDeutscheBankAGPage3InvestmentthesisWearebullishonChinacontainerportsTheChinacontainerportsectorisunder-developed.WeestimateChina’scontainerisationratetobejust36.9%in2002,wellbelowtheglobalaverageof59%in2001.China’scontainerthroughputshouldcontinuetooutperformnationalexportgrowthuntilacontainerceilingisreachedin2013F.CoupledwithcontinuedFDIinflows,demandforChina’scontainerportsisonasustainablegrowthtrend.Havingpostedaremarkable31%Cagrduring1995-03,weforecastChina’scontainerportthroughputtoposta17%Cagrduring2003-08F.ThisshouldallowChina’sshareofglobalcontainerportthroughputtorisefrom16%in2003to25%in2008F.WithinChina,portsintheBohairegionshouldofferthemostupsideduetolowercontainerisationandgrowingcontractedFDIintosecondaryindustries.CapacitygrowthnotmatchingdemandrequirementsWeforecastcapacityatChina’scontainerportstoposta13%Cagrduring2003-08F,whichisslowerthanourexpecteddemandgrowth.Thesupplyshortfallin2007-08Fisli