Incidents:

Yongtaiyun released the 2023 semi-annual report:

In the first half of 2023, the company achieved revenue of 1,203 billion yuan, a year-on-year decrease of 27.30%. Net profit from the parent group was 103 million yuan, a year-on-year decrease of 25.48%.

By business, cross-border chemical logistics supply chain services achieved revenue of 786 million yuan, a year-on-year decrease of 49.49%, warehousing and storage services achieved revenue of 47 million yuan, a year-on-year decrease of 18.81%, and road transport services achieved revenue of 29 million yuan, an increase of 19.50% over the previous year. The company's supply chain trade services split from the original “others” achieved revenue of 310 million yuan.

Key points of investment:

Affected by the sharp drop in international shipping container freight rates, the company's performance is under pressure in the short term. The company's main business is cross-border chemical logistics supply chain services. Fluctuations in international shipping container freight rates have had a great impact on the company's performance. According to Clarkson data, the SCFI indices for Q1 and Q2 in 2023 were 968.77 and 983.51, respectively, down 80.03% and 76.64% year-on-year, respectively. This has put a lot of pressure on the company's single-box revenue in the short term. Faced with fluctuations in shipping rates, the company actively expanded its business volume to cope. In 2023, the number of operating containers for H1 cross-border chemical logistics supply chain services was 67,200 TEU, an increase of 31.76% over the previous year, hedging freight rate fluctuations to a certain extent. One of the highlights of the first half of the year was the company's supply chain trade business. The business achieved revenue of 310 million yuan, accounting for 25.79% of revenue, injecting new impetus into the company's performance growth.

Under pressure from the economy, growth has not changed, and transportation and warehousing are growing rapidly

The company's business volume continues to grow rapidly. Cross-border chemical logistics supply chain service 2023Q2 achieved operating box volume of 35,000 TEU, up 25.00% year on year and 8.70% month on month; warehousing service 2023Q2 achieved operating box volume of 14,300 TEU, up 19.17% year on year and 104.29% month on month; road transport service 2023Q2 achieved operating box volume of 16,200 TEU, up 161.29% year on year and 276.74% month on month. With the gradual release of production capacity in the newly acquired warehouses of Tianjin Hanover (Tianjin), Shaoxing Changrun (Tianjin)), Shaoxing Changrun, and Qingdao Port, the company's business volume is expected to experience a significant increase. Entering the second half of the year, international shipping container freight rates remained stable and rebounded slightly. On August 18, the SCFI index was 1031, and the company's single container revenue is expected to rise steadily in the second half of the year.

Chain owners' rights are shifting to midstream, and long-term pricing capability is superior

In the long run, in the chemical supply chain with Chinese characteristics, there is a trend of chain owners' rights shifting to the midstream, and the long-term pricing capacity of supply chain enterprises is superior. The reason is that, as the world's largest producer and consumer of chemicals, China is also among the highest in the world in terms of long-term supply chain complexity. The complex supply chain system is fertile ground for third-party companies to grow. Second, most of the links in China's chemical supply chain are franchised, and new supply is strictly limited. Leading supply chain companies are expected to increase their influence in the industrial chain with scarce dangerous goods warehouse resources. Third, catalyzed by the policy, there are signs that the rate of increase in industry concentration will accelerate after 2018. If the concentration rate of supply chain enterprises is higher than that of the chemical industry, leading supply chain enterprises are expected to gain more supply chain authority from chain owners.

Profit forecasts and investment ratings Since the company's performance growth is in line with our expectations, we have kept our previous profit forecast unchanged. We expect Yongtaiyun's revenue for 2023-2025 to be 2,766 billion yuan, 3,752 million yuan, and 4.631 billion yuan respectively, and net profit for the return home to be 253 million yuan, 342 million yuan, and 431 million yuan respectively, and the corresponding PE is 15.11 times, 11.20 times and 8.88 times, respectively. Maintain a “buy” rating.

Risk indicates that demand falls short of expectations, production accidents, integrated mergers and acquisitions that fall short of expectations, calculation errors, major policy changes, overseas market risks, and exchange rate risks