Xinda International Logistics (06123)
Buy
Fundamentals: the core business of the Group is air and sea freight forwarders, as well as warehousing, distribution, customs clearance, contracts and supporting logistics services. The business model is mainly through obtaining cargo space from airlines and other carriers. Then provide export freight forwarding services to customers, and LCL of consignment goods with specific cargo space to make a profit. The Group operates in 16 countries and has 54 offices in Asia, the Netherlands and North America. In the face of the global economic slowdown, Cantel maintained good growth in 2013, with turnover growing by 20 per cent to HK $3.161 billion and profit attributable to shareholders rising by 22.8 per cent to 46.44 million yuan. With the acquisition of the Dutch and North American businesses in 2011, it will gradually bring profit contributions to the Group, which is expected to accelerate the growth of the Group's revenue and net profit.
Catalyst: in recent years, online shopping has continued to be popular and has maintained an annual growth rate of more than 30%. While distribution and supporting logistics services are extremely important to e-commerce, the group is exploring e-commerce business opportunities and potential cooperation with large e-commerce and overseas brands in the future. will be a catalyst to push up stock prices. Benefiting from a rebound in import demand from Europe and the United States, and the effects of domestic foreign trade policy measures beginning to appear, the mainland's export data last month were better than market expectations, and the market expected that the US economy would continue to maintain in the third quarter, which is expected to help mainland export growth to accelerate.
Valuation: the current price is equivalent to about 9.5 times 2014 forecast earnings, a discount of 36 per cent to the average valuation of Sinotrans (00598) over the same period. With the gradual recovery of foreign trade in the mainland and the potential cooperation with large e-commerce and overseas brands in the future, we expect the valuation gap between the Group and its peers to narrow upward.
Technical trend: the stock price continued its short-term rise from the end of July this year to the present, and reached the target price of 2.00 yuan when we recommended it at the end of August, plus the stock price (18) initially broke through the resistance at the top of the horizontal zone in the past month with a large transaction, which is conducive to the stock price to continue to try high levels. It is recommended to absorb while low.
Purchase price: 2.00 yuan (stock price: 2.16 yuan, rising space: 15.0%) target price: 2.30 yuan support: 1.80 yuan
