Incident: Kacheng International recently issued an announcement. With approval from China Logistics Group Co., Ltd., its subsidiary Huamao Logistics and Guangdong Jiacheng International Aviation Co., Ltd., a joint venture established by Kacheng International, obtained a business license and other relevant licenses, taking an important step in the integrated aviation logistics layout.
Comment:
As an important link, airlines connect the Kacheng International Super World Port in the Greater Bay Area with overseas warehouses around the world to create a door-to-door integrated air logistics service for the entire supply chain. According to the company's announcement, after official operation, the airline plans to have 12 aircraft within 3 years, including 3 wide-body freighters, expected to have 20-25 aircraft within 6 years, and the fleet size is expected to reach 50 within 9 years (2032), complete the construction of 10 bases, and grow into a medium-sized cargo airline. We believe that the establishment of an airline company is expected to become an important strategic resource for the company. On the one hand, the airline connects the overseas logistics warehouse to the Kacheng International Superworld Port in the Greater Bay Area, which will achieve a door-to-door air logistics service integrating the entire supply chain, greatly shortening the transit time of goods, saving logistics costs, and improving logistics quality. On the other hand, air transport will become an important means of emergency protection for the social supply chain when land transportation is blocked due to social emergencies such as the COVID-19 pandemic. At the same time, the international air cargo market has also maintained a high growth rate. The domestic air cargo market has already ushered in a period of rapid development and policy dividends. It is expected that the smooth operation of airlines will significantly increase the company's overall competitiveness and operating efficiency.
Bonds were successfully issued, and cross-border e-commerce business was actively deployed. The company has successfully issued 800 million yuan of convertible bonds, and the capital raised is mainly used for the “Cross-border E-commerce Smart Logistics Center and Supporting Construction” project. According to the announcement, the main structure of the company's Jiacheng International Port (5 floors, total about 500,000 square meters) has been completed. The first and third floors are partially used by Cainiao's shipping warehouse business, South China export business, and the Southeast Asia full-link supply chain integration business of Lazada's cross-border e-commerce platform. The 2nd and 3rd floors are used by Panasonic Electric (South China) Global Distribution Center. It is expected that the company's cross-border business will provide strong support for its performance.
Investment advice: Optimistic about the company's long-term layout on the core asset side and entering e-commerce logistics, we predict that the company's revenue for 2022-2024 will be 1,409/15.78/1,78/1,781 billion yuan respectively, net profit of 221/295/349 million yuan respectively, corresponding to EPS of 0.95/1.27/1.49 yuan, corresponding to PE18.3/13.7/11.61X, the first coverage, and a “buy” rating.
Risk warning: performance forecasts and valuation judgments fall short of expectations, repeated epidemics, and blocking of cross-border e-commerce