occurrences

Recently, Hongchuan Wisdom released its 2023 annual report. During the reporting period, it achieved total revenue of 1,547 million yuan, an increase of +22.48% over the previous year; net profit to the mother was 296 million, an increase of +32.49% over the previous year; the company also released the 2024 Q1 quarterly report, achieving total revenue of 380 million yuan, an increase of +1.07% over the same period last year; and net profit to mother of 60 million yuan, a year-on-year decrease of -12.75%.

In the 2023 annual report, the company's weighted average return on net assets is 11.8%, and it is proposed to pay a cash dividend of 0.25 yuan (tax included) per share. Based on the closing calculation at the time of disclosure on the 27th, the dividend rate is 1.7%.

reviews

The company is an innovative petrochemical product logistics integrated service provider, mainly providing integrated warehousing services and other related services for domestic and foreign petrochemical product producers, traders and end users. The petrochemical logistics industry is a link between the supplier side and the demand side of petrochemical industry products. The main characteristics are: industry supervision is getting stricter, and supply is constrained; the industry has high entry barriers, and it is also an asset-heavy industry. Resources such as shorelines and terminals are important barriers to entry into the industry.

In recent years, the market concentration of this industry has gradually increased, and the industry has become large-scale. Through a continuous merger and acquisition growth path, the company gradually realized the dual track development pattern of the first main business terminal storage tank storage business and the second main business chemical warehouse storage business. By the end of last year, the company's subsidiaries had a total of 14 terminals, ranging from 1,000 tons to 80,000 tons; the total operating tank capacity was 5.03 million cubic meters, with a single storage tank capacity ranging from 100 to 50,000 cubic meters; the total operating capacity was 64,900 square meters; the chemical warehouses were mainly Class A warehouses and Class B warehouses, and several warehouses were designated delivery depots for methanol on the Zhengzhou Commodity Exchange.

The company's warehousing bases/storage areas are mainly located in East China and South China, and effective linkages with each storage base/storage area through value-added services. The advantages of the cluster effect are gradually showing, which can meet the storage needs of most petrochemical products.

Investment ratings

With the cyclical recovery of chemicals, the rental rate of the company's newly put into production warehouses gradually climbed, which is expected to contribute incremental performance to the company in the second half of the year. We covered it for the first time and gave it an “gain” rating.

Risk warning

Macroeconomics fell short of expectations; unexpected decline in warehouse occupancy rates; operational safety incidents;