The company announced its 2023 annual report: Net profit attributable to mother was 4.22 billion yuan, an increase of 4% over the previous year, slightly exceeding expectations. 1) Revenue side: In 2023, we achieved operating revenue of 101.7 billion yuan, -7% year over year; gross profit of 5.8 billion yuan, -5% year over year; gross profit margin of 5.7%, up 0.1 percentage point year on year. 23Q4 revenue was 28.9 billion yuan, +2% YoY, +16% month-on-month; gross profit was 1.41 billion yuan, +44% YoY, gross profit margin 4.9%. 2) Investment income and other income:
Investment income in 2023 was 2.33 billion yuan, -10% year-on-year, of which Sinotrans DHL contributed 1.79 billion yuan, or -6.2% year-on-year, accounting for 75% of investment income. Other revenue of $2.45 billion, +65% year over year, was mainly due to an increase in government grants received and confirmed by the company. 3) Profit side: Net profit returned to mother in 2023 was 4.22 billion yuan, slightly exceeding expectations, and reached a record high, +4% year over year, net interest rate 4.2%, up 0.5 percentage points year on year; net profit from non-return mother was 3.46 billion yuan, -2% year over year, net profit without return to mother was 3.4%, up 0.2 percentage points year on year. Net profit from 2023Q4 was 1.06 billion yuan, +101% year-on-month, +7% month-on-month; net profit after deducting non-return to mother was 670 million yuan, +126% year-on-year, -22% month-on-month, net interest rate after deducting 2.3% from non-return mother, an increase of 1.3 percentage points year-on-year.
Look at it by business:
1) Freight forwarding: revenue of 61.9 billion yuan, -11.5% year on year; gross profit of 3.3 billion yuan, -18% year on year, gross profit margin 5.3%, down 0.4 percentage points year on year. Among them, shipping agent/ air freight agent/ railway agent/ shipping agent/ depot station service revenue was 411/70/124/51/38 billion yuan respectively, -17.3%/-13%/+31.4%/16%/8.5%, respectively, and segment profits were 7.8/2.8/1.6/5.1/330 million yuan, +11.3%/-15.5%/+19%/+21%/+44.4%; cargo volumes were 13.77 million TEUs, 900,000 tons/500,000 TEUs, 60,000 ships/26 million tons, the same The ratios were +3%/+15%/+27%/-6%/+4%, respectively. Looking at unit profit, sea/air freight unit profits were 58 yuan/box and 407 yuan/ton, respectively, +8%/-22% year-on-year, and net interest rates were 1.9% and 4.1%, respectively.
2) Professional logistics: Revenue of 275 billion yuan, +0.2% year on year, gross profit of 2.5 billion yuan, +8.8% year on year, gross profit margin 9.2%, up 0.7 percentage points year on year. Among them, contract logistics/project logistics/chemical logistics/cold chain logistics revenues were 210/41/20 billion yuan, +4%/-16%/-1% year-on-year; segment profits were 8.2/1.4/1.2/-50 billion yuan, respectively, +13%/+39%/+29%/+41%; business volume was 47/6/4/1 million tons, respectively, +13%/+10%/+4%/0.3% year-on-year, respectively.
3) E-commerce business: revenue of 12.3 billion yuan, +3.3% year-on-year, gross profit of 06 billion yuan. Among them, cross-border e-commerce logistics achieved 360 million tickets, +17% year over year.
Pay attention to shareholder returns to increase the dividend ratio: the company has implemented a mid-term dividend of 0.145 yuan per share (dividend ratio of 48%), and plans to pay a dividend of 0.145 yuan per share at the end of 2023. If implemented, this means a total dividend of 0.29 yuan per share for the whole year, and the annual dividend ratio is 49.77%. The amount of H shares repurchased by the company in 2023 was HK$0.3 billion, and dividends and repurchases for the full year of 2023 accounted for 50.4% of net profit attributable to mother. The corresponding current dividend rate is 5%.
The company continues to improve its transportation service capabilities and attaches importance to overseas network layout. 1) In terms of transportation capacity building, the company completed the integration of the Yangtze River container business and became the largest branch line carrier for public containers in the Yangtze River; the air transport side stably operated 11 international freighter routes, operating a total of 1,274 flights throughout the year, and the annual air transport channel volume exceeded 920,000 tons. 2) In terms of overseas network layout, establish Hungarian subsidiaries; continue to open city/regional branches in Singapore, Malaysia, Vietnam, Laos and Indonesia; vigorously expand strategic regional infrastructure resources and build new warehouses in Thailand; launch the construction of a logistics center in the Dubai South City Free Trade Zone; build the first 5G automated warehouse in the UAE; and invest 90,000 square meters of new controlled work space in Europe.
Investment advice: 1) Profit forecast: As the company's operating quality continues to improve, we slightly raised the company's 2024-2025 net profit to 44.9 billion yuan and 4.68 billion yuan (the original forecast was 41.9 billion yuan and 4.51 billion yuan), adding the 2026 forecast to 4.92 billion yuan. The corresponding EPS is 0.62, 0.64, and 0.67 yuan, respectively, and the corresponding PE is 9, 9, and 8 times, respectively. 2) Investment advice: We maintain the valuation method and give the company 12 times PE in 2024, corresponding to a market value of 53.9 billion yuan in 2024, and a target price of 7.39 yuan for a one-year period. The expected space is 30% compared to the current price, and emphasizes the “recommended” rating.
Risk warning: external environmental risks, sharp fluctuations in freight rates, and overseas network expansion falling short of expectations.