Event
Antong Holdings released a report for the first quarter of 2018, with operating income of 1.92 billion yuan, an increase of 65.3% over the same period last year, a net profit of 170 million yuan, an increase of 40.5% over the same period last year, and a deduction of 144 million yuan for non-return net profit, an increase of 4.5% over the same period last year, and basic earnings per share was 0.16 yuan.
With a substantial increase in revenue, the cost advantage of sea-rail intermodal transport is being realized quarter by quarter. Since 2017, the company has increased its practice of multimodal transport business. With the gradual release of transport capacity, containers and railway resources, the company's revenue from the railway section has increased substantially. 1Q2018's operating income grew by 65.3%, but the upfront investment led to a single-quarter gross profit margin of 16.4%, a decrease of 7.35pcts compared with the same period last year. At the same time, the three fees increased by 30.0% year-on-year to 111 million: management expenses (staff salaries, office expenses) + 24.8%, sales expenses + 182.2%, financial expenses + 24.8%, the company's overall return net profit growth rate of 40.5%, and net profit margin of 8.86%, a slight decline of 1.57 pct compared with the same period last year.
According to the adjustment of the company's accounting subjects, Antong receives other gains from local government subsidies that are divided into non-recurring profits and losses. We believe that the current non-recurrent profit and loss of the company's 2018Q1 mainly comes from the contribution of the government subsidy (35.109 million). From a long-term perspective, the government subsidy is related to the main business of the company and should not be considered as an one-time profit or loss. Overall financial performance of the company Q1: considering that the first quarter is the traditional off-season for domestic containers, the company's net profit and net profit margin have stabilized and increased quarter by quarter, and the cost advantage of sea-rail intermodal transport is being realized quarter by quarter.
Multi-point blossom: cold chain, dangerous, special, the expansion of the service radius and the future focus of the customer base, 1) the company further strengthens its control over the goods throughout the process. at present, we are accelerating the expansion of dangerous chemicals and cold chains with great difficulty in transportation, strict supervision and high added value, and timely accelerate the on-site logistics on the client side, and further extend the service to the information management, warehousing, picking and distribution links of the client side. 2) the geographical radiation area is large, covering more customer groups, with the help of Belt and Road Initiative to expand overseas markets. 3) the customer base has gradually moved up, and the proportion of traditional bulk goods and industrial products in the company's target group, which is more sensitive to freight, shows a downward trend, while the proportion of consumer customers with higher requirements of timeliness, flexibility and service level is on the rise.
Investment suggestion
We believe that the company will fully benefit from the network advantages of multimodal transport and the foundation of the information platform, and in the future, the company will adopt the strategy of "pulling lines to form a network" at the railway end, forming the superposition advantage of the linked highway and waterway network of the railway network. continue to expand and extend the comprehensive logistics service capacity, and expand high-end on-site project logistics, dangerous chemicals, cold chain logistics and so on. Considering that the company will continue to expand its railway business on a large scale in 2017, and benefiting from the development of multimodal transport, the company has slightly raised 18-year EPS0.80 yuan (originally 0.76 yuan) to maintain the judgment of 0.96,1.14 yuan in 19-20 years. We select A-share comparable company with an average PE of 26.6x in 2018. Taking into account the high growth of the company's performance, the compound growth rate of CAGR in 2018-20 is 30%, and the current stock price corresponds to a PEG of less than 1. Give the company a certain valuation premium, with a target price of 24 yuan and a corresponding valuation of 30.0, 25.0 and 21.0 x respectively, maintaining a "buy" rating.
Risk hint: the macroeconomic decline is higher than expected, and the multimodal transport, especially the railway layout, is lower than expected.
