"Double Circulation" Favors Domestic Trade Shipping

Recently, the central economic work conference once again stressed that "double cycle" is the strategic direction to deal with medium and long-term problems, and "firmly grasping the strategic basis point of expanding domestic demand" is the key to "double cycle".

The so-called "double cycle" refers to a new development pattern with the domestic big cycle as the main body and the domestic and international double circulation promoting each other.

With the expansion of domestic demand rising to the national strategy, the demand for grain, coal, plastics and other bulk commodities will increase, and the demand and volume of domestic trade transportation will also increase.

"The concept of" double circulation "is good news for enterprises engaged in domestic trade container and domestic trade logistics industry, which indicates that the central government's policies and funds will be inclined to the" double cycle "related industries in the next step On September 23, Lu zongjun, chairman of Zhonggu logistics, said in an exclusive interview with 21st century economic reporter that Zhonggu has already stood on the track of "double cycle", and "with the help of capital market, relying on innovation and informatization, I believe that with the east wind of" double cycle ", Zhonggu will fly higher and further."

On September 25, Zhonggu logistics will be listed on the Shanghai Stock Exchange. This is the first domestic shipping company listed on IPO in China. By observing the operation data of the company, we can get a glimpse of the current situation and development prospect of domestic trade transportation in China.

Domestic trade shipping IPO first share

Zhonggu logistics is one of the earliest enterprises specialized in domestic container shipping. Its competitors in domestic container logistics industry mainly include Pan Asia shipping, Antong holding and Sinotrans express. Among them, Pan Asia shipping, Zhonggu logistics and Antong holdings are ranked among the top three, occupying nearly 80% of the market share. The industry market concentration is relatively high, and the domestic container logistics industry is an oligopoly Monopoly competition pattern has been formed.

According to Lu zongjun, Zhonggu logistics has established a multi-level and all-round coordinated comprehensive logistics system relying on the port system covering the whole country, the route advantages of efficient operation and the multimodal transport network in the hinterland. The routes reach the coastal areas and major water systems of the country, and its business covers the major coastal ports and ports in inland water systems, and radiates to nearly 30 provinces in China.

Since its establishment, the container throughput of Zhonggu logistics has been growing at a high speed with an average annual compound growth rate of 30%. In 2019, the throughput of Zhonggu logistics will exceed 3 million TEU in Guangzhou port, 2 million TEU in Xiamen port and Shanghai port, and 1 million TEU in Qingdao port, Rizhao Port, Tianjin port and Taicang port. Shanghai port is the world's largest container port, and Zhonggu logistics accounts for 40% of its domestic container throughput.

Picture vision China

On the one hand, business growth comes from the long-term good management and operation of Zhonggu logistics founder team, on the other hand, it also owes to the expansion of transport capacity. According to the data of alphaliner, the authoritative organization of international container industry, as of December 31, 2019, the comprehensive transportation capacity of Zhonggu logistics ranked 13th in the world and the top three in China; 112 container ships were operated efficiently, with a capacity of 2486500 DWT and 382400 TEU of standardized containers.

According to the financial data of the prospectus, the revenue and profit of Zhonggu logistics have maintained stable and sustained growth. In 2017, 2018 and 2019, the operating revenue of Zhonggu logistics was 5.6 billion yuan, 8.08 billion yuan and 9.9 billion yuan respectively, and the net profit was 410 million yuan, 550 million yuan and 860 million yuan respectively. In the past three years, the compound growth rate of net profit attributable to parent company of Zhonggu logistics has reached 45%, and the roe level of parent company has always been greater than 20%, and has maintained a continuous upward trend. In 2019, the return parent roe will reach 28.86%.

It seems that Zhonggu logistics business and profits are stable, and the capital chain is not tense. The IPO raised funds of only 1.5 billion yuan. What is the purpose of Zhonggu listing? Lu zongjun explained to reporters with a smile that the development of private enterprises is largely constrained by the opacity of operation and the capital bottleneck brought by many constraints of banks. After turning into a listed enterprise through market operation, on the one hand, it can prevent and solve the capital problem, on the other hand, it will make the enterprise development more transparent and standardized.

It is reported that this is the second listing of Zhonggu. In 2016, Zhonggu logistics was listed on the new third board. However, it was soon found that the new third board transaction did not meet the expectations, so it withdrew in 2017 and prepared to land on the main board again. After three years of long-distance running, it finally got the IPO pass on July 23, this year.

Lu zongjun said that Zhonggu's main business is container transportation, which will not expand blindly after listing. It will consider purchasing new ships and containers, and continue to extend from the main business to upstream and downstream, so as to enhance the enterprise's anti risk ability, increase its profit point, deeply cultivate the whole logistics, and promote the enterprise to operate more healthily and stably, without affecting the company's performance due to the ups and downs of the shipping market.

He judged that the current is not the best time to build a ship. The cost of steel and iron ore is rising, and the cost of ship plate has also increased significantly compared with 2015. "The current situation may be a good time to purchase a second-hand ship." Lu zongjun road.

Lu does not rule out acquiring ship resources by merging companies with rich ship resources, but there is no target in China.

Take advantage of "double circulation"

The listing opportunity of Zhonggu logistics coincides with the domestic efforts to tap the "double cycle" potential. Domestic trade circulation is a basic and leading industry of national economy, and also a bridge connecting production and consumption. Therefore, Zhonggu logistics will benefit from the national policy and usher in a leap forward development.

According to the report "analysis of China's domestic container transport market" released by Shanghai International Shipping Research Center, China's domestic trade and domestic branch line container transport demand will increase by 5.65% and 8.03% respectively in 2019. With the gradual implementation of relevant supporting policies, the domestic demand oriented economy will affect the supply structure of China's logistics industry, further promote the expansion of domestic trade transportation scale and the improvement of the level, thus bringing space for the development of container logistics transportation.

For example, under the "dual cycle" strategy, the economic structure and industrial structure will be adjusted, the division of labor and cooperation among regions will be strengthened, the proportion of high-tech products and high-value-added products will continue to increase, the transport volume of mechanical and electrical products and a large number of manufactured products will increase rapidly, and the proportion of container suitable for containers will obviously increase.

"The containerization rate of China's domestic trade is only about 20%, and the international developed countries have reached 70% - 80%, so there is still a huge space for development." Lu zongjun pointed out that this year's epidemic is a business opportunity for the development of containerization in China. During the outbreak, roads and railways were limited, but waterways were not. According to incomplete statistics, Zhonggu logistics carried more than 60000 boxes of various epidemic related materials, raw materials, food and daily necessities during the period of resisting the epidemic. "The container itself is an active warehouse, which can be connected with businesses at any time. Unlike bulk carriers, there is no place to store after unloading, which greatly facilitates customers." Lu zongjun thinks that containerization is the future trend, so Zhonggu logistics puts forward the enterprise mission of "changing China's logistics mode with containers".

In recent years, the heavy policy of promoting the development of multimodal transport has been issued continuously. In May this year, the national development and Reform Commission and the Ministry of transport issued the notice on Implementation Opinions on further reducing logistics costs, proposing to speed up the promotion of "transit to rail" and "transit to water" for medium and long-distance transportation of bulk goods, so as to promote the standardization of upstream and downstream logistics loading equipment. Containerization is the best weapon for the development of multimodal transport.

Therefore, Zhonggu logistics will directly benefit from the development of container multimodal transport. In the context of frequent positive policies and good growth trend in the multimodal transport industry, Zhonggu logistics also began to focus on seeking new strategic opportunities.

According to the prospectus, Zhonggu logistics has two holding subsidiaries, Inner Mongolia sea rail interconnection International Logistics Co., Ltd. and Tiehai Shunda international freight forwarding (Beijing) Co., Ltd., which operate sea rail intermodal transportation business. In addition, in April 2020, Zhonggu logistics established Liaoning ShenHa Honggu logistics intermodal Co., Ltd. with 50% shares, and the other 50% equity participants include Harbin Railway Bureau, Shenyang Railway Bureau and Yingkou port.

"The cooperation with Harbin railway and Shenyang railway will help Zhonggu further enhance the market share of sea rail intermodal transport in Northeast China." Lu zongjun revealed that Zhonggu has also set up sea rail intermodal transport business in the south. For example, in cooperation with Kunming Railway Bureau, Zhonggu opened the first five fixed trains (fixed point, fixed line, fixed train number, fixed time and fixed price departure). After the containers arrived in Qinzhou by sea, they were transported to Kunming by rail, which has achieved very good results.

Lu zongjun thinks the prospect of rail water intermodal transportation is very good. Because the price of water transportation is much cheaper than other modes of transportation, and the speed is not slower than that of highway and railway, it is very advantageous in long-distance transportation, especially in coastal transportation. The annual growth rate of Zhonggu in iron water combined transportation business is more than 100%. He believes that the railway sector will become increasingly aware of this win-win situation.