The Zhitong Finance App learned that Yamato released a research report saying that it raised the target price of Sinotrans (00598) by 38% to HK$4.15, indicating that the 2023 performance was better than expected, but the rating was lowered from “buying” to “outperforming the market.”

According to the report, Sinotrans revenue fell 6.9% to 101.7 billion yuan last year, but declared profit increased 3.5% to 4.2 billion yuan, better than expected. Gross margin increased 0.1 percentage points to 5.7%, and net margin increased 0.4 percentage points to 4.2%.

The bank raised the company's 2024-25 earnings forecast per share by 8-25%, and the net profit margin forecast was raised by 1 percentage point to about 4%. The valuation was extended from 2023 to 2024. It is cautiously optimistic about this year. It is expected that the company's net profit will rise to 4.46 billion yuan this year. The main risk is that trade demand will fall short of expectations.