Huayuan Securities: It is recommended to focus on the dividend attributes of the port sector and the growth potential of hub ports

According to the Zhitong Finance APP, Huayuan Securities released a research report stating that China's port construction has evolved from large-scale and rapid development in the early stages to continuous integration and integrated development, with infrastructure upgrades moving towards green and intelligent advancements. Currently, the growth rates of cargo throughput and container throughput are relatively stable. As a key transportation infrastructure, ports have stable operating models and strong cash flows. With the slowdown in industry capital expenditure growth, it is recommended to focus on the sector's dividend attributes and the growth potential of hub ports, specifically recommending China Merchants Port, Qingdao Port, Beibu Gulf Port, and Tangshan Port.

The main points of Huayuan Securities are as follows:

Ports are key logistics nodes connecting land and sea transport in the global supply chain

Ports are key logistics nodes connecting land and sea transport in the global supply chain, exchanging significant capital expenditure in the early stages for future throughput and cash flow. Therefore, geographical location determines the development ceiling of ports, and connectivity on both land and sea sides is crucial. From a financial performance perspective, the asset-liability ratio of China's port industry is currently declining, with Tangshan Port and Qingdao Port entering a mature stage, exhibiting strong cash flows and high dividends; Beibu Gulf Port is still in a growth phase with significant capital expenditures.

Domestic port construction is maturing, and port integration along with green and intelligent development continues

China's port construction has transitioned from large-scale and rapid development in the early stages to continuous integration and integrated development, with infrastructure upgrades moving towards green and intelligent advancements. Among the existing five major coastal port clusters, the Yangtze River Delta port cluster and the Southwest Coastal port cluster have higher capital expenditures, with the former investing heavily in smart port construction and the latter matching the rapid growth of its ports.

Domestic port throughput growth stabilizes after rapid development

After experiencing rapid growth in the early stages, the growth rates of cargo throughput and container throughput are currently relatively stable. With an expected GDP growth of around 5% in 2025, throughput may continue to grow in sync with GDP. In terms of overall cargo, the Bohai Rim port cluster contributed 43% of the throughput in 2024, with stable total throughput but low growth rates; in terms of container throughput, the Yangtze River Delta port cluster contributed 36% of the throughput, with relatively fast growth rates. In the future, the Yangtze River Delta port cluster and the Southwest Coastal port cluster are expected to maintain high throughput growth rates, while the Pearl River Delta port cluster shows stable growth, and the Bohai Rim port cluster and Southeast Coastal port cluster exhibit slower throughput growth.

Domestic port charging standards are becoming more market-oriented

Port charges in China include government pricing, government-guided pricing, and market-adjusted pricing for operational service charges. The government has been continuously merging and reducing charging items in the revision of the "Port Charging Billing Method," moving various fees towards a market-adjusted direction.

Risk Warning: Macroeconomic performance may be below expectations; changes in U.S. policies towards China; adjustments to dividend policies may be below expectations; port throughput growth may be below expectations