Performance

On April 29, 2023, Sheng Hang released the first quarter report of 2023. In the first quarter of 2023, the company realized operating income of 292 million yuan, an increase of 61.84% over the same period last year, and a net profit of 45 million yuan, an increase of 15.81% over the same period last year.

Analysis.

Underford also reported an increase in stacking capacity and a substantial year-on-year increase in revenue. 2023Q1 achieved operating income of 292 million yuan, an increase of 61.84% over the same period last year, mainly due to the expansion of business scope and scale: 1. The company acquired Jiangsu Underford energy supply chain in 2022, laying out liquid ammonia road transport business, and Underford table brought increment to the company's revenue. 2. With the merger and acquisition of ships and the commissioning of ships, the number of domestic and foreign trade ships controlled by the company reached 30 at the end of 2022, an increase of 36% over the same period last year. In addition, the company's 13000 deadweight ton oil product tanker was put into use in January 2023.

The company's approved 3720 dwt oil-chemical tanker (capacity replacement) and 5050 cubic meter LPG carrier (non-ethylene carrier) are under construction, and revenue is expected to continue to grow with capacity expansion in the future.

The gross profit margin decreased compared with the same period last year, and the expense rate increased significantly compared with the same period last year. Affected by the expansion of the company's business scope and scale, 2023Q1's gross profit margin decreased by 4.2pct to 32.4%. In terms of expense rate, the expense rate of 2023Q1 increased by 4.1pct during the period, of which the sales expense rate was 0.4%, down 0.2 pct from the same period last year; the management expense rate was 7.1%, an increase of 2.4pct over the same period last year, mainly due to the expansion of transportation scope and scale and the amortization of equity incentive expenses; the R & D expense rate was 2.3%, a decrease of 0.7pct over the same period last year The financial expense rate was 4.7%, an increase of 2.6pct over the same period last year, mainly due to the expansion of business scope and scale, increased liquidity borrowing and long-term debt financing. Affected by the above, 2023Q1's net interest rate was 15.5%, down 6.1pct from the same period last year.

The release of convertible bond plan, transport capacity growth is expected. On March 9, the company announced the plan to issue convertible corporate bonds, the funds to be raised shall not exceed 740 million yuan for: (1) 120 million yuan for the purchase and construction project of coastal inter-provincial liquid dangerous goods ships; (2) 110 million yuan for the replacement purchase and construction project of coastal inter-provincial liquid dangerous goods ships; (3) 300 million yuan for the purchase project of coastal inter-provincial liquid dangerous goods ships; (4) 210 million yuan for supplementary working capital. If this convertible bond issue, will enhance the company's financial strength, help to steadily improve the scale of transport capacity in the future, optimize the fleet structure, enhance market competitiveness.

Earnings forecast, valuation and rating

Considering the rhythm of ship introduction, the company's net profit forecast for 2023 is reduced to 240 million yuan (originally 260 million yuan), and the 2024-2025 net profit forecast is 330 million yuan and 420 million yuan.

Maintain a "buy" rating.

Risk hint

Chemical industry fluctuation risk, safety operation risk, policy regulatory risk, M & A lower-than-expected risk, shareholder and director high reduction risk.