Incident: Guanghui Logistics released its semi-annual report for 2021. The results showed that in 2021, the company's total operating revenue was 1,584 million yuan, an increase of 24.25% over the previous year, net profit of 337 million yuan, an increase of 22.18% over the previous year, net profit after deducting 327 million yuan from non-return net profit, an increase of 15.60% over the previous year.
The government demolished and helped the logistics park be renovated and upgraded. Most of the buildings in the company's Guanghui Meiju Logistics Park were expropriated during the reporting period, and the compensation area will not be lower than the area of the original housing property rights in accordance with the principle of “demolition, replacement, and local settlement”. In the future, the company will build a new logistics park based on previous business experience, and complete the transformation and upgrading of the logistics park by relying on KL Xingpinhui's successful commercial operation experience, good reputation, and mature commercial management team. The household building materials commercial distribution industry in Xinjiang has been affected by the epidemic and many other factors and is under overall pressure from oversupply, but challenges and opportunities coexist, and the industry pattern will diverge in the context of consumption upgrades.
The real estate business provides the company with sufficient cash flow. Currently, the real estate business is number one among all of the company's businesses in terms of revenue and profit, which has effectively promoted the continuous growth of the company's performance. The revenue, profit, and return of funds from the real estate business in the first half of the year have all completed the planned tasks. The smooth development of the real estate project provided sufficient cash flow and rich project management experience for the development of the company's main logistics business, and provided strong support for the company's steady development.
New logistics businesses such as cold chain and energy are the future development direction. The scale of China's cold chain logistics market continues to grow, supply in the Xinjiang market is in short supply, and the company layout comes at the right time. Benefiting from the rising level of urbanization in China and the continuous deepening of consumption upgrades, the scale of the cold chain logistics market represented by the food cold chain continues to grow, and China's cold chain logistics is mainly concentrated in East China, while the development of cold chain logistics in the central and western regions, especially in the western region, is relatively lagging behind. The company has ushered in the best period for entering the cold chain, and future performance is expected to grow rapidly. At the same time, with the help of the Dongfeng Belt and Road, construction of the Jiangnao Railway, which the company is a shareholder of, officially began in April of this year. It is expected to become a new channel for resources and materials from northern Xinjiang to leave the border in the future.
Investment suggestions: The profitability of the company's logistics park and cold chain business has improved, and the real estate business is steady. It is estimated that the company's EPS in 2021-2023 will be 0.93/1.00/1.06 yuan respectively, and the corresponding PE will be 4.3X/4.0X/3.8X, maintaining the “buy” rating.
Risk warning: Business expansion fell short of expectations, rent fell sharply