01 Introduction of Shanghai International port group (SIPG)
Located in the front of the Yangtze River Delta, Shanghai Port is the main hub port along the coast of China, the world famous port and the international shipping center.
Shanghai International port group (SIPG) is the operator of Shanghai port. It is the largest listed port company in mainland China and one of the largest port companies in the world.
In January 2003, after the restructuring of the former Shanghai Port Authority, a specialized group enterprise-- SIPG was established. In June 2005, after an overall restructuring, SIPG has established a joint-stock company. On October 26, 2006, SIPG has become the first port joint-stock enterprise to be listed as a whole in Shanghai Stock Exchange in China.
02 Performance of Shanghai International port group (SIPG)
Shanghai International port group (SIPG) is the operator of Shanghai port. It is the largest listed port company in mainland China and one of the largest port companies in the world.
In the five years from 2013 to 2017, the business income of Shanghai Group increased year by year, from 28.162 billion Yuan in 2013 to 37.424 billion Yuan in 2017. Beginning from 2014, it has changed from negative growth to positive growth. From 2013 to 2016, the growth rate was relatively slow, and there was a substantial increase in 2017.
Fig. 1. Operating income of SIPG (2013-2017)
Fig.2. Net profit attributable to equity holders of the parent company of SIPG (2013-2017)
Reason I: from the angle of port industry
1. The global economy and trade continue to maintain a moderate growth trend. China's economy has shifted from a high-speed growth stage to a high-quality development stage. The growth rate of foreign trade has reached a new high in the past six years, and the growth rate of port business in China has rebounded significantly.
2. New technology revolution, especially artificial intelligence, big data, Internet +, cloud computing, block chain, and other digital technologies are undergoing profound changes and breeds breakthroughs in the industry. Port intelligence, automation, intellectualization and greening are accelerating in the industry. Based on technological innovation, ports are speeding up their transformation and development.
3. The competition environment and mode of port market are changing, and the competition order is being reconstructed. The competition mode of port is changing from the competition of capacity and throughput to the competition of port efficiency, service quality, integrated logistics, scientific and technological innovation and sustainable development ability.
4. The operation cost of ports is increasing rigidly, the resource and environment bottom line constraints are tightening, and the profit growth of port enterprises is under pressure.
Reason II: from the angle of SIPG
1. In 2017, the cargo throughput and container throughput of SIPG's parent port increased considerably, the container throughput exceeded 40 million standard boxes, and the profit contribution of the main port industry increased steadily.
2. Compared with the same period last year, the company's non-recurrent profits and losses are expected to increase by about 4.23 billion Yuan..
03 Main business of Shanghai International port group (SIPG)
In 2017, the container throughput of the company's parent port was 402.333 million standard containers, an increase of 8.3% over the previous year. Since 2010, it has been the world's largest container throughput for eight consecutive years.
Income from container cargo of Shanghai Port Group: in 2013, 10.609 billion Yuan, in 2014, 11.994 billion Yuan, in 2015, 12.457 billion Yuan, in 2016, 2.604 billion Yuan and in 2017, 13.481 billion Yuan. This shows that container business is still the main business of the company.
The parabolic trend of the proportion of business income shows that the group is actively seeking business transformation and expanding its revenue by other means.
Fig.3. Operating income of container cargo business (2013-2017)
In 2017, the cargo throughput of the company's parent port reached 561 million tons, an increase of 9.1% over the previous year. Among them, bulk cargo throughput in the parent port reached 164 million tons, an increase of 11.4% over the same period last year.
Over the past five years, the operating income of the bulk cargo sector of SIPG has gradually declined, and the proportion of its operating income has also shown a downward trend.
The decline of bulk cargo business is mainly affected by the downturn of commodity market and the intensification of competition in surrounding ports. However, as one of the four major business sectors of Shanghai Port, bulk cargo business will still be the main direction of Shanghai Port in the future.
Fig.4. Operating income of bulk cargo business (2013-2017)
Overall, the operating revenue of the port logistics sector of SIPG has increased gradually in the past five years, which shows that the business is still the main business of the company. The proportion of business income in general also shows an increasing trend.
However, it declined in 2017, indicating that the main business of SIPG was slightly adjusted in 2017.
Fig.5. Operating income of port logistics business (2013-2017)
The business income of the port service sector of SIPG has declined gradually in the past five years, and the proportion of business income has also shown a downward trend.
The main reason for the income change of port service sector is the adjustment of port handling rate and related business price.
SIPG should reduce operation cost, improve service quality and improve profitability of service sector by using intelligent and information technology.
Fig.6. Operating income of port service business (2013-2017)
