Main points of investment

Event: the company announced three quarterly reports for 2023: 2023Q1-Q3 revenue 878 million yuan (year-on-year + 42.74%), net profit 117 million yuan (year-on-year-13.47%), non-return net profit 115 million yuan (year-on-year-13.64%), net operating cash flow 331 million yuan (year-on-year + 24.9%).

Quarter by quarter: 23Q1/23Q2/23Q3, revenue is 2.92 (year-on-year + 61.84%) / 2.87 (year-on-year + 35.31%) / 299 million (year-on-year + 34.29%), gross profit is 0.95 million yuan, 0.95 million yuan, respectively, and period expenses are 0.43 million yuan, 0.44 billion yuan, respectively. The net profit of homing was 0.45 (year-on-year + 15.81%) / 0.42 (year-on-year-16.80%) / 29 million yuan (year-on-year-35.49%), the net operating cash flow was 0.32 (year-on-year + 18.5%) / 1.91 (year-on-year-15.1%) / 108 million yuan (year-on-year + 671.4%), and the capital expenditure was 1.06371 million yuan respectively.

Take a specific look at Q3: from an external point of view, Q3 refinery has completed inspection and repair and resumed production, and refinery operating rate has gradually resumed; from the perspective of freight rate, the overall freight rate of domestic trade is relatively stable throughout the year, and some routes fluctuate slightly. After a brief decline in June-July, foreign trade chemical tanker freight rates rebounded steadily in August, rebounded greatly in September, and the industry improved compared with the previous month; the revenue end is + 34.29% year-on-year, and the business scale continues to expand. Gross profit margin year-on-year-3.0pct, the fluctuation is mainly due to the recovery of domestic spot market demand lags behind refineries (gradually picking up after the July low), but month-on-month is still + 2.5pct. Compared with the bottom of the first half of the year, Q3 demand recovered. On the expense side, the period expense rate is year-on-year + 1.1pct, and the financial expense rate is year-on-year + 2.1pct, mainly due to the expansion of the company's operation scale (increasing liquidity borrowing) and capacity expansion (increasing long-term debt financing); except for the financial expense rate, the sales, management and R & D expense rates are all improved month-on-month, and the company is effective in fee control.

Asset side: epitaxial mergers and acquisitions continue to expand capacity. 1) domestic trade: as of 2023H1, there are 27 domestic chemical tankers (1716,000 DWT) and 5 finished product oil tankers (588000DWT). On this basis, the company plans to acquire three bulk chemical tankers / tankers (1 domestic trade transport and 2 foreign trade transport) of "Fenghai 17", "Fenghai 21" and "Fenghai 19". The asset is expected to be consolidated in Q4. The company has a steady pace of epitaxial mergers and acquisitions, expanding production capacity and promoting a further increase in market share. 2) Foreign trade: as of 2023H1, there are 5 foreign trade chemical tankers (568 million DWT). With the gradual shift of the global chemical production center to Asia, the evolution of the global refining and chemical production capacity pattern, the chemical shipping market has undergone regional structural changes, resulting in a huge international chemical transport demand, the company actively reserves foreign trade capacity through mergers and acquisitions, with a larger performance release space.

Strengthen the water transport layout of liquid ammonia supply chain: according to the Ministry of Transportation, in 2023, the company increased the capacity of coastal dangerous cargo ships, ranking second among the five LPG ship evaluation enterprises suitable for liquid ammonia, and obtaining a strong certainty of liquid ammonia ship capacity increment. This year's capacity review requires that each company can participate in only one type of ship. The company stands out in the review of liquid ammonia LPG carriers, strengthening the "second curve" liquid ammonia water transport layout, combined with the previously acquired Underford energy supply chain (liquid ammonia road transport business), laying the foundation for the improvement of clean energy logistics supply chain.

Investment suggestion: with the warming of Q4 domestic trade demand, the arrival of foreign trade traditional peak season, and the continuous improvement of liquid ammonia supply chain, the company's performance is expected to be further released. It is estimated that the company's net profit from 2023 to 2025 will be 1.46kg 1.74 / 265 million yuan, which is 10.9 times the PE corresponding to the closing price on October 30, 2023, maintaining the "overweight" rating.

Risk tips: 1) transport operation risk. 2) the competition in the industry is intensified. 3) fuel cost disturbs profit