The company announced 2023 results and 2024Q1 performance forecast: In 2023, the company achieved revenue of 1,225 million yuan, -4.1% year on year, net profit to mother 164 million yuan, -4.0% year on year; 2024Q1, the company is expected to achieve net profit of +50.0-70.0% year on year.

The company's results declined slightly year over year in 2023. In 2023, the company achieved revenue of 1,225 million yuan, -4.1% year-on-year, and net profit of 164 million yuan, or -4.0% year-on-year. The decline in revenue was mainly due to the boom in the home appliance industry, and the traditional e-commerce festival distribution business did not meet expectations in the fourth quarter. Looking at the main business segment: 1) Integrated logistics business revenue of 664 million yuan, +1.7% year on year, gross profit margin of 45.3%, +4.0 percentage points year on year; 2) Distribution business revenue of 558 million yuan, -10.2% year on year, gross profit margin 11.6%, and +1.0 percentage point year on year. In addition, factors that dragged down the company's profit situation in 2023 include: 1) a significant year-on-year increase in financial expenses, mainly an increase in interest on convertible bonds in the fourth quarter after Ka Shing International Port was fully consolidated and put into use; 2) Credit impairment of 44 million yuan.

Benefiting from new production capacity and the development of cross-border e-commerce business, 2024Q1's performance increased significantly over the same period last year. According to 2024Q1, the company is expected to achieve +50.0-70.0% of net profit attributable to mother and +50.8-70.8% of net profit without deduction. The sharp increase in Q1 performance was mainly due to the full commissioning of Jiacheng International Port and the company's addition of a new export logistics business for world-renowned large-scale cross-border e-commerce platform enterprises, which brought good economic benefits. In 2023, the company has reached cooperation with all four well-known e-commerce platform companies in the world. Currently, the company provides warehousing services for cross-border e-commerce with an area of about 1 million square meters, and continues to add new high-standard warehouses and expand new warehouse networks. Looking ahead to the full year of 2024:1) Jiacheng International Port, which was put into operation last year, will fully release profit growth this year; 2) The company's Haikou warehousing project has been capped and will be mainly used for duty-free logistics services. We believe it may contribute profits in the second half of the year; 3) The company is expected to continue to deepen and expand the cross-border e-commerce customer service chain to undertake more air transport services and customs services for customers.

Maintain a “Highly Recommended” rating. The company is based on high-quality high-standard warehouse resources, building a nest and attracting rapidly growing customers on emerging cross-border e-commerce platforms. It is expected to expand the service chain, and the release of production capacity combined with the expansion of the service chain is expected to catalyze performance. In the short term, the company will significantly benefit from rental income from Ka Shing International Port this year. It is estimated that in 2024-26, the company's net profit to mother will be 30/3.4/410 million yuan, respectively, and the P/E corresponding to the company's current stock price is 11.5/10.1/8.3 times, respectively.

Risk warning: Storage capacity release falls short of expectations, demand falls short of expectations, risk of depreciation.