China Merchants Port(CM Port)reported 1H26 revenue of HKD7.30bn(+13.0%YoY)and attributable NP of HKD3.83bn(+6.9%YoY),modestly above our forecast of HKD3.80bn.Supported by healthy export demand,port throughput and earnings delivered steady growth in 1H26.The company also declared an interim DPS of HKD0.25,unchanged YoY.Its share of profits from port associates and joint ventures totaled HKD3.38bn(+27.0%YoY),with the strong growth mainly reflecting alow base created by anon-recurring item at SIPG in 1H25.Looking ahead to 2H26,we expect export demand to remain resilient and port earnings to maintain steady growth on both YoY and HoH bases.Maintain BUY.
Container throughput rises 4.5%YoY
Container throughput reached 78.21mn TEUs in 1H26(+4.5%YoY).By region,throughput was:1)28.74mn TEUs in the Yangtze River Delta(+6.4%YoY);2)17.27mn TEUs in the Bohai Rim(+7.0%YoY);3)10.31mn TEUs in the Pearl River Delta(+1.5%YoY);and 4)19.69mn TEUs at overseas ports(+2.5%YoY).Within the overseas portfolio,throughput increased by 80.6%YoY at Hambantota International Port Group(HIPG),14.6%YoY at Kumport in Türkiye and 4.0%YoY at TCP in Brazil.Healthy export demand and increased transshipment cargoes amid geopolitical disruptions supported steady overall throughput growth.
EBIT increases 12.8%YoY
Revenue from ports operation reached HKD6.83bn in 1H26(+13.2%YoY).EBITDA and EBIT were HKD4.38bn and HKD3.28bn,respectively(+11.5%/+12.8%YoY),with the corresponding margins at 64.0%and 48.1%(-1.0pp/-0.1pp YoY).Overall gross profit reached HKD3.81bn,with gross margin up 1.2pp YoY to 52.2%.The core port business demonstrated strong resilience despite geopolitical disruptions.Throughput growth and higher terminal handling charges supported the YoY improvement in gross profit and gross margin.
Investment income rises 27.0%YoY
The share of profits from port associates and joint ventures increased by 27.0%YoY to HKD3.38bn in 1H26,equivalent to 88.3%of attributable NP.Within this,SIPG contributed HKD2.64bn,or 69.0%of attributable NP,representing growth of 33.2%YoY.The increase reflected resilient growth in SIPG’s core port earnings and alow base in 1H25,when SIPG recognized aone-off non-operating loss on its long-term equity investment in PSBC.Excluding non-recurring items,we expect the core port earnings of associates and joint ventures to maintain steady growth in 2H26.
Maintain earnings forecasts and target price at HKD16.7
We maintain our attributable NP forecasts of HKD7.37bn/HKD7.95bn/HKD8.64bn for 2026–2028.Based on 9.5x 2026E PE,equivalent to 1.5 standard deviations above the company’s three-year historical average,we maintain our target price of HKD16.7.We believe the valuation premium is justified by the company’s globally diversified terminal mix,which helps smooth cargo-volume fluctuations across markets.Maintain BUY.
Risks:a global economic downturn,weaker-than-we-expected cargo-volume growth,geopolitical risks.