Broker: UOB Kay Hian
Date of Report: 4 June 2025
Qingdao Port International: Navigating Growth Amid Global Trade Rebounds and Operational Excellence
Overview: Qingdao Port International at the Forefront of Northeast Asia’s Maritime Trade
Qingdao Port International (QPI) stands as the principal operator of Qingdao Port, a strategic hub in Northeast Asia renowned for its natural deep-water capacity and world-class stevedoring efficiency. As a gateway port, QPI connects with more than 700 ports across over 130 countries, offering comprehensive cargo handling across containers, dry bulk, and liquid bulk. Its advanced infrastructure, including a fully-automated terminal, has set the global record for container handling rates for 11 consecutive years.
Shareholder Structure and Market Data
- Shandong Port Group: 55.8% ownership
- COSCO SHIPPING Ports: 20.1% ownership
- Shares Outstanding: 6,491.1 million
- Market Cap: HK\$42,452 million (US\$5,414.8 million)
- 3-Month Average Daily Turnover: US\$3.6 million
- 52-Week High/Low: HK\$6.76/HK\$5.23
Stock Performance
QPI’s share price has demonstrated resilience and growth momentum, with performance metrics as follows:
- 1-Month: +17.2%
- 3-Month: +8.6%
- 6-Month: +20.0%
- 1-Year: +12.8%
- Year-to-Date: +2.2%
Strategic Position and Business Fundamentals
- QPI operates one of the world’s largest and most efficient ports, uniquely positioned as a maritime gateway to Northeast Asia.
- Handles a diversified portfolio: containers, dry bulk (e.g., metal ore, coal), and liquid bulk (e.g., crude oil).
- Majority of earnings are driven by domestic demand, especially in dry and liquid bulk, while the international container business forms about one-third of pre-tax profit.
Limited Exposure to US Market
- Only 10% of 2024’s container throughput is linked to US trade, mitigating direct risks from US-China tensions.
2024-2025 Business Outlook: Optimism Amid Trade Recovery
Rebound in US-Bound Container Volume:
- US-bound container volumes fell 40-50% in April 2025 during peak tariff tensions but rebounded after the US-China tariff truce.
- Shippers have increased frontloading to hedge against post-truce uncertainties, boosting immediate port volumes and increasing storage demand due to port congestion.
Container Handling Charge Hike:
- QPI is implementing a 10% rate hike in container handling charges—the largest since 2022.
- 70-80% of major customers have already accepted the higher rates; negotiations are ongoing with the remainder.
- This move is expected to enhance revenue and improve handling margins.
Financial Performance: Consistent Growth and Healthy Margins
QPI has delivered a decade of consistent net profit growth, achieving a 10-year CAGR of 12.7%, reflecting the port’s strategic value and China’s rising trade activity.
| Year to 31 Dec (Rmbm) |
2020 |
2021 |
2022 |
2023 |
2024 |
| Net Turnover |
13,219 |
16,793 |
19,263 |
18,173 |
18,941 |
| EBITDA |
5,017 |
5,616 |
6,432 |
6,732 |
6,852 |
| Operating Profit |
4,084 |
4,449 |
5,103 |
5,254 |
5,402 |
| Net Profit |
3,842 |
3,982 |
4,525 |
4,923 |
5,235 |
| EPS (Rmb) |
0.59 |
0.61 |
0.70 |
0.76 |
0.81 |
| PE (x) |
10.2 |
9.8 |
8.6 |
7.9 |
7.4 |
| P/B (x) |
1.2 |
1.1 |
1.0 |
1.0 |
0.9 |
| EV/EBITDA (x) |
7.3 |
6.4 |
6.4 |
5.7 |
5.5 |
| Dividend Yield (%) |
3.9 |
3.8 |
4.0 |
4.4 |
4.7 |
| Net Margin (%) |
29.1 |
23.7 |
23.5 |
27.1 |
27.6 |
| Net Debt/(Cash) to Equity (%) |
(25.3) |
(14.2) |
(18.0) |
(19.0) |
(21.7) |
| ROE (%) |
12.1 |
11.6 |
12.4 |
12.7 |
12.7 |
Profit & Loss, Balance Sheet, and Cash Flow Highlights
| Year to 31 Dec (Rmbm) |
2021 |
2022 |
2023 |
2024 |
| Net Turnover |
16,793 |
19,263 |
18,173 |
18,941 |
| EBITDA |
5,616 |
6,432 |
6,732 |
6,852 |
| Depreciation & Amortization |
1,167 |
1,330 |
1,477 |
1,450 |
| EBIT |
4,449 |
5,103 |
5,254 |
5,402 |
| Associate Contributions |
1,184 |
1,270 |
1,531 |
1,657 |
| Net Interest Income/(Expense) |
202 |
188 |
-33 |
15 |
| Pre-tax Profit |
5,835 |
6,556 |
6,790 |
7,068 |
| Tax |
-1,169 |
-1,309 |
-1,272 |
-1,336 |
| Minorities |
-684 |
-722 |
-594 |
-497 |
| Net Profit |
3,982 |
4,525 |
4,923 |
5,235 |
Key Financial Metrics
- EBITDA Margin (2024): 36.2%
- Pre-tax Margin (2024): 37.3%
- Net Margin (2024): 27.6%
- Return on Assets (2024): 9.3%
- Return on Equity (2024): 12.7%
- Debt to Total Capital (2024): 5.2%
- Debt to Equity (2024): 5.5%
- Net Debt/(Cash) to Equity (2024): (21.7)%
Peer Comparison and Valuation
- QPI is trading at 7.4x 2024 PE, aligning with Hong Kong-listed peers such as COSCO SHIPPING Ports and China Merchants Port (trading at 7-8x).
- QPI’s dividend yield of 4.7% (net of 10% withholding tax) is slightly below its peers’ levels, with others offering yields above 5%.
Conclusion: Strong Fundamentals and Resilient Growth Prospects
Qingdao Port International’s strong financial track record, strategic position in global and domestic trade, and operational efficiency position it for continued growth. The company’s effective management of tariff headwinds, resilient earnings base, and successful implementation of rate hikes reinforce its outlook for 2025. Investors looking for exposure to China’s trade dynamics and infrastructure efficiency may find QPI an appealing and stable investment within the port and logistics sector.
Disclosures and Analyst Certification
The report was prepared by UOB Kay Hian, with analyst certification ensuring objectivity and independence. Distribution is subject to local regulatory requirements across Hong Kong, Singapore, Indonesia, Malaysia, Thailand, the United Kingdom, and the United States.
