The company announced three quarterly results for 2023: net profit of 81 million yuan, + 34.8% compared with the same period last year, and-12% compared with the previous year.

1) operating income: 2023Q1-Q3 achieved 1.16 billion yuan, + 23.8% compared with the same period last year, of which 23Q3 was 390 million yuan, + 16.6% year-on-year and-3% month-on-month. 2) gross profit: 2023Q1-Q3 achieved 690 million yuan, + 26% year-on-year, gross profit margin 59.4%, an increase of 1 percentage point over the same period last year; of which 23Q3 gross profit reached 230 million yuan, + 23% year-on-year, month-on-month-4%, gross profit margin 59.5%, up 3% year-on-year, down 1.1%. 3) expenses: the total 2023Q1-Q3 of the period expense rate (sales / management / R & D / finance expenses) is 31%, down 1.4% from the same period last year; 23Q3 is 32%, 1.6% lower than the same period last year, and 3.4% higher than the previous year. Of this total, 23Q3 R & D expenditure increased by 8.15 million yuan month-on-month. 4) homing net profit: 240 million yuan in the first three quarters, + 31% year-on-year, 20.7% net interest rate, 1.1% higher than the same period last year; of which 23Q3 reached 81 million yuan, + 34.8% year-on-year,-12% month-on-month, 20.8% net profit rate, 2.7% year-on-year increase and 2.1% decrease. The net profit of Q1-2 was 0.69 yuan and 91 million yuan respectively, with a year-on-year growth rate of 27.8% and 30.4% respectively. 5) the operating cash flow of 2023Q3 is 260 million yuan, which is + 20% compared with the same period last year and-21% compared with the previous year.

The company has strong M & An ability, and the acquisition of Nantong Yi Lian was completed in October 23, and the can capacity of the company will continue to grow:

In June 2023, the company announced that it planned to acquire 100% equity in Yi Lian Nantong, with a total tank capacity of 620,000 m?, accounting for 14% of the company's operating tank capacity and 19% of the company's holding tank capacity. after the completion of the merger and acquisition, it will become the largest petrochemical warehouse in the company's holding warehouse. second only to the joint venture company Weifang Sendamei (660,000 m?). The transaction value is 886 million yuan, and the net profit of the subject matter to be acquired is 34.01 million yuan in 2022 and 14.61 million yuan from January to May in 2023.

The project is only 10 kilometers away from the company's core asset Nantong Yanghong, and the acquisition is expected to enhance the cluster effect between the company's warehousing bases in the Yangtze River Delta region.

Investment suggestions: 1) considering that the market demand is still in the recovery period, we slightly adjust the profit forecast for 2023-2025 to realize the expected return net profit of 3.3,4.5 and 570 million yuan (the original forecast is 3.6,5 and 610 million yuan), the corresponding EPS is 0.73,0.99,1.24 yuan respectively, and the corresponding PE is 30,22,17 times respectively. 2) We believe that the petrochemical warehousing industry has a clear model and high barriers, and as an industry leader, the company is expected to continuously increase its market share and achieve rapid growth in the scattered market. Considering the scarcity of resources and future growth, combined with the industry comparable company valuation and the company's valuation center of 33 times in the past three years, the company is given 30 times PE of expected profit in 2024, corresponding to a target market capitalization of about 13.5 billion yuan and a target price of 29.6 yuan. It is expected to have 37% growth compared with the current price, emphasizing the "recommended" rating.

Risk tips: the company's extension of mergers and acquisitions is not as expected; petrochemical storage safety operation risk and so on.