Throughput growth improved in Dec. 2018; CMP's operations areexpected to remain stable in 1Q19. The Company's YoY throughput in Dec. 2018 rebounded to 4.7%, up 3.3 ppts MoM. Annual throughput in 2018 rose5.9% YoY to 108,994 thousand TEUs. Overseas performance was betterthan domestic performance. Probability of Sino-U.S. trade escalation will belower in 2019, and we expect CMP's operations to remain stable in 1Q19.
CMP made significant progress on Qianhai land, and may recognizeapprox. HK$3.58 bn after-tax gain in 2019. Accordingly, CMP had approx. 966,000 sq.m. of land in QHFTZ. In the future, CMP will shift 55% of itsQianhai land to Dachan Bay Port Area. The remaining 425,300 sq.m of landwas revalued. Revaluation on the remaining land will contribute an after-taxone-off gain of HK$3.58 bn. We expect CMP to confirm the gain in 2019.
Acceleration of QHFTZ's development is also beneficial to CMP. QHFTZ is the core of the Guangdong-HK-Macao Greater Bay Area. As CMGand its subsidiaries hold the largest proportion of land in QHFTZ, we believethat advancement of commercial projects （e.g. office） will bring CMPIncremental profit.
Reiterate "Accumulate" rating and revise up TP to HK$17.00. Focusingon Shenzhen's west port zone as its core asset, the Company's domestic portallocation resources are still balanced and stable. After conducting Qianhailand's consolidation, CMP may continue to enjoy the development benefitsyielded from Qianhai's competitive location. CMP’s current valuation remainsattractive. Our TP represents 7.4x, 7.0x and 7.7x 2018-2020 PER.