Bonded technology is the leading state-owned asset in domestic liquid warehousing, focusing on the Yangtze River Delta and has significant geographical advantages. by the end of 2022, we expect the company's production capacity to account for 50% of Zhangjiagang bonded area tanks and 26% of dry bulk warehouses. In the past three years, the short-term impact of litigation and epidemic may have been cleared, while the company has accelerated the rejuvenation of management, traditional logistics and smart logistics two-wheel drive, we estimate that the company's net profit in the next two years will be 38% in the context of endogenous growth. The liquefied storage tank industry is relatively scattered. According to the data of the dangerous Chemicals Logistics Branch of China Logistics and Purchasing Federation, according to the calculation of tank capacity, the storage tank operators with a tank capacity of more than 300000 cubic meters only account for about 1 cubic meter. Considering that supply expansion is limited under strong regulatory policies, extension mergers and acquisitions may be the best development path. The removal of the impact of litigation is expected to promote the landing of epitaxial expansion, the company has abundant cash flow, paper cash, asset-liability ratio is better than comparable companies, relying on the financing channels of state-owned shareholders are smooth, looking forward to epitaxial mergers and acquisitions to accelerate the growth of the company. We estimate that the net profit increment of the company is 96 million / 136 million / 185 million / 247 million yuan and the corresponding CAGR is 23.4%, 31.8%, 41.7% and 53.0% respectively under the assumption of 25,30,35 and 40% expansion conditions of the Yangtze River international tank capacity in 2025. Negative factors clear, endogenous-epitaxial two-way growth can be expected, covering for the first time, giving a "buy" rating.

Bonded technology is the leading state-owned asset leader in domestic liquid warehousing, focusing on the Yangtze River Delta and significant geographical advantages. We estimate that endogenous growth will drive the company's net profit CAGR to 38% in the next two years, and we look forward to accelerated growth in epitaxial expansion. Bonded Technology is an innovative integrated logistics service provider integrating terminal warehousing business, intelligent logistics services and supply chain financial services. by the end of 2022, the company has 214storage tanks with a tank capacity of 1.108 million square meters and a dry bulk warehouse of 166000 square meters. We estimate that the proportion of tanks and dry bulk warehouses in Zhangjiagang Free Trade Zone will be 50% and 26% respectively. The company is the only listed company with state-owned background in the field of liquefied warehousing, and the actual control is the administrative committee of Zhangjiagang Free Trade Zone. Excluding the impact of the epidemic disturbance, we expect terminal warehousing (liquefaction) profits to contribute more than 80%. In the past three years, the short-term impact of litigation and epidemic may have been cleared, while the company has accelerated the rejuvenation of management, traditional logistics and smart logistics two-wheel drive, we estimate that under the endogenous growth, the company's net profit CAGR will reach 38% in the next two years. The company continues to improve the efficiency of resource integration is expected to achieve the tank market share and utilization increase, in order to transfer to the profit end, while the lifting of litigation restrictions is expected to promote the landing of epitaxial expansion.

Multiple factors lead to strict supply of the industry, scarce assets to create high returns, downstream demand to restore superimposed refining capacity in the context of recovery, tank utilization is expected to continue to improve. Major safety accidents strengthen the supervision of environmental protection, a number of policies have been introduced to strictly control the chemical storage industry, and new chemical storage projects have been strictly restricted in recent years. At the same time, new tank storage projects involve environmental impact assessment, examination and approval of land resources, and so on. It often takes more than five years, and it is expected that the strong supply constraints of the industry will continue in the future. Scarce assets create high returns. According to the annual reports of various companies, we estimate that the average gross profit margin of liquid storage business of A-share chemical storage enterprises in 2022 is 51.2%, which is significantly higher than that of dangerous chemicals shipping and land transport enterprises; at the same time, the regional distribution of the industry is obvious. According to the data of the dangerous chemicals logistics branch of China Logistics and Purchasing Federation, Jiangsu tank capacity accounts for 29.6% of the national tank capacity, and the company is expected to benefit significantly from the Yangtze River Delta. On the demand side, considering the accelerated recovery of 2023H2, downstream demand is expected to recover further. According to data from the General Administration of Customs and the National Bureau of Statistics, China's crude oil import and processing volume of 2023H1 is 28228.9 million tons, an increase of 11.8% and 9.4% over the same period last year. In the future, with the gradual launch of ethylene glycol and downstream polyester capacity, it is expected to increase the utilization rate of storage tanks and transmit them to the profit end of operators.

Location advantage-the younger management team and other factors drive the company's endogenous growth, looking forward to the start of epitaxial expansion to achieve a comprehensive improvement of efficiency. The company's reservoir areas are located along the lower reaches of the Yangtze River, connecting the chemical warehousing needs of Shanghai and southern Jiangsu, and realizing deep binding with chemical enterprises in the Zhangjiagang reservoir area and even the lower reaches of the Yangtze River. Changjiang International, a subsidiary, has become the leader of liquefied warehousing in East China. According to the company's 2022 annual report, the company's glycol handling capacity accounted for 35% of the national import market in 2022. The younger and professional management team of the new board of directors brings new opportunities for the improvement of the company's management efficiency and the implementation of the long-term strategy. In 2022, the gross margin of terminal warehousing (liquefaction) of bonded technology will increase by 6.7pcts compared with the same period last year, and we expect the gross margin of terminal warehousing (liquefaction) to increase by 24% in 2023. The industry is relatively scattered. According to the data of the dangerous Chemicals Logistics Branch of China Logistics and Purchasing Federation, according to the calculation of tank capacity, tank operators with a tank capacity of more than 300000 cubic meters only account for about 1 / 5, and extension mergers and acquisitions may be the best development path. the company has abundant cash on paper, healthy asset-liability ratio, and has the conditions for extension expansion. If the epitaxial expansion falls to the ground, we estimate that in 2025, the net profit increment of the company will be 96 million / 136 million / 185 million / 247 million yuan and the corresponding CAGR will be 23.4%, 31.8%, 41.7% and 53.0% respectively under different working conditions of 25,30,35 and 40%. We expect epitaxial mergers and acquisitions to accelerate the growth of the company.

Power chemical online delivery, intelligent logistics business orderly growth to provide performance increment, and continue to optimize the business structure, mining solid warehouse business new increment. The company aims at chemical offline delivery procedures are complex, online delivery penetration is low pain points, chemical online delivery, open up intelligent logistics business, to provide customers with online delivery, capital clearing and financing services. Since 2015, smart logistics business has grown orderly along the drainage-cash-value-added logic, and has been built into smart logistics 3.0, which provides performance increment through service + value-added mode. The company's business structure has been continuously optimized. The share of chemical products trade revenue has declined rapidly in 2022, and the overall gross profit margin has increased significantly to 25.0%. We expect the company to continue to optimize its product structure in 2023. At the same time, we are actively digging increments in solid warehouses, successfully expanding six new varieties such as ferroalloy and polyester chips in traditional PTA and cotton business, and expect the growth of PTA warehousing demand to form a joint force with the new development business, driving the foreign service company's revenue back to the growth track. We expect the foreign service company to contribute 50 million yuan in revenue in 2023, an increase of 15.0% over the same period last year.

Risk factors: a sharp decline in economic growth; a sharp decline in the prosperity of the petrochemical industry; petrochemical safety accidents; M & An integration is less than expected; industry competition intensifies.

Profit forecast, valuation and rating: bonded technology is the leading state-owned asset in liquid warehousing, and the short-term impact of litigation and outbreaks in the past three years may have been cleared. At the same time, the company has accelerated the rejuvenation of management, traditional logistics and smart logistics two-wheel drive, we estimate that under the endogenous growth, the company's net profit CAGR is expected to reach 38% in the next two years. The company continues to improve the efficiency of resource integration is expected to achieve the tank market share and utilization increase, in order to transfer to the profit end, while the lifting of litigation restrictions is expected to promote the landing of epitaxial expansion. The younger and professional management team of the new board of directors brings new opportunities for the improvement of management efficiency and the implementation of long-term strategy. We look forward to epitaxial mergers and acquisitions to accelerate the growth of the company. Without taking into account epitaxial mergers and acquisitions, we predict that the annual EPS in 2023-24-25 will be 0.2110.25max 0.30 yuan, with reference to the comparable company valuation level (Hongkawa Wisdom, Henji Daxin nearly 3 years PE (TTM) average of 30 times), considering that the company is expected to benefit from endogenous drive and epitaxial growth in the future, give the company 2023 30 times PE, corresponding to 2023 target price 6.2yuan, the first coverage, given a "buy" rating.