The 23-year performance is under pressure, and the 24-year logistics business performance is expected to improve
Transanhua Zhilian announced 2023 results: achieved operating income of 33.64 billion yuan, a year-on-year decrease of 9.1%; achieved net profit to mother of 590 million yuan, a year-on-year decrease of 20.7%. Of these, 4Q23 achieved net profit to mother of 86.81 million yuan, a year-on-year decrease of 36.8%/27.7%. The year-on-year decline in performance in 23 was mainly due to supply chain disruptions mitigated by the epidemic, falling costs in various links, and weak combined demand, putting pressure on the company's logistics sector business performance.
Looking ahead to 24 years, the company will adjust its business structure and continue to promote the national highway port layout. By extending the service chain and expanding the customer base, it is expected to achieve a positive cycle of business and bring about a year-on-year increase in revenue and profit. We forecast that the company's net profit for 24/25/26 will be 660 million/780 million/940 million yuan, respectively. Based on 20x 24E PE (comparable transportation infrastructure company Wind's agreed forecast of 11.4x, the valuation premium is mainly due to the company's highway port business still in the process of expansion and optimization, and profitability is expected to continue to increase), adjust the target price to 4.7 yuan to maintain “growth”.
The highway port business is progressing steadily, and the profitability of the logistics business is improving
In '23, the company's logistics business achieved revenue of 24.71 billion yuan, down 12.6% year on year; achieved gross profit margin of 6.1%, up 0.7 pct year on year. Among them, the revenue of the smart highway port business fell slightly by 0.9% to 1.22 billion yuan, and gross margin increased 4.2pct to 74.5% year on year. The company is deeply involved in the construction of road port ecological scenarios, continuously improving line coverage and contract delivery capacity around special lines within Hong Kong, and the operating quality is steadily improving; supply chain logistics business revenue fell 49.6% year on year, but gross margin increased by 2 pct to 7.6% year on year. The company focused on improving business quality and efficiency, actively optimizing the customer structure. Revenue declined significantly but profit margins increased.
The chemical business operates steadily, and product structure improvements increase gross profit margin
In '23, the company's chemical business achieved revenue of 8.87 billion yuan, up 2.9% year on year; achieved gross profit margin of 23.0%, up 2.4 pct year on year. The chemical business has been operating steadily, the product structure has been optimized, and both revenue and profit have grown. By product, the revenue of printing and dyeing auxiliaries/leather chemical fiber oil/coatings and construction chemicals/butadiene rubber was +3.2%/+0.6%/-9.6%/+13.7%, respectively. Among them, printing and dyeing additives benefited from strong demand, compounded supply chain cost transmission, and gross margin increased 5.9pct to 31.6% year over year.
The short-term logistics business is still under pressure. We are optimistic about the medium- to long-term development of the company's chemical business. The company's logistics business is under pressure due to declining costs due to weak warehousing demand. In the medium to long term, in terms of logistics business, with the gradual expansion of highway port nationalization, the company is expected to continue to expand the scale of the highway port business and achieve a positive cycle by expanding the scale of the highway port business and achieving a positive cycle; by deepening the R&D system, strengthening supply chain network construction, expanding overseas demand and product structure differentiation, the company is expected to maintain resilience in the downward economic cycle, and have some profit elasticity during the upward economic cycle.
Risk warning: macroeconomic growth falls short of expectations; cost optimization falls short of expectations; security risks.