Core point of view

1) 2021Q3's performance is in line with expectations. In the third quarter of 2021, the company achieved operating income of 329 million yuan, an increase of 1.87% over the same period last year, a net profit of 59 million yuan, an increase of 17.84% over the same period last year, and a non-net profit of 57 million yuan, 26.28%, in line with expectations. Benefiting from the continuous improvement of the high gross margin business (cross-border warehousing and logistics) and the gradual commissioning of the second phase of Jiacheng International Port, the contribution of cross-border warehousing and logistics business to profits continues to rise, with sales gross margins of 28.18%, 29.02% and 30.87% respectively in the first three quarters of 2021, and net sales margins of 15.61%, 17.96% and 18.03%, respectively.

2) Cross-border business continued to improve in the third quarter. The company's cross-border export business has gradually expanded, with a substantial increase in the volume of exports to Hong Kong, China and Southeast Asian countries; in terms of import business, Tmall's international trade business has been added, and the business volume of the original bonded warehouse model has grown steadily. It is expected that with the advent of the peak e-commerce consumption season in the fourth quarter, the company's cross-border import and export business is expected to further increase.

3) the old project has entered the stage of completion and acceptance, and the new project is ready to start. According to the company announcement, the second phase of Ka-shing International Port has entered the stage of completion and acceptance and will be put into operation on a large scale during the year. The company added a new Hainan duty-free warehousing and logistics project. According to the company announcement, the project is expected to increase the company's annual business income by 1.2 billion yuan and contribute 240 million yuan to profits.

4) profit forecast and investment rating. According to our profit forecast for the company, from 2021 to 2023, the company's operating income was 100 million yuan in 13-20-24, an increase of 16%, 50%, 22%, and net profit of 1.9, 342, 000, 300, 000, We are optimistic about the location advantages of the company's own warehousing location, while considering the business growth brought about by joining the Cainiao network, and further opening up the growth space after entering the Hainan duty-free logistics market to maintain the "overweight" rating.

5) risk hint: the progress of the project is not as expected and the cooperation with the rookie is not as expected.