Incident: Sanyangma announced its 2023 annual report and 2024 quarterly report. In 2023, the company achieved total revenue of 980 million yuan, an increase of 21.8% year on year; net profit to mother of 2011.6 million yuan, up 29.0% year on year; deducted non-net profit of 16.033 million yuan, up 97.1% year on year; and the company's basic earnings per share was 0.25 yuan.

Regional leader in rail intermodal transport to build a national modern integrated logistics enterprise. Sanyangma is a logistics company located in Chongqing, a city directly under the Central Government. Comprehensive logistics services for automobiles are the company's largest business, contributing more than 80% of revenue in 2023, while integrated logistics services for non-automotive products are the second largest business, contributing more than 10% of revenue. In terms of gross profit, integrated automotive logistics services contribute mainly to gross profit.

Demand in the downstream automobile market is increasing, and the automotive logistics industry is expected to gradually recover. In 2023, automobile production and sales reached 301.61 million units and 30.94 million units, respectively, up 11.6% and 12% year on year; in 2023, China exported 4.91 million vehicles, up 57.9% year on year. As the country's policy to promote consumption and steady growth continues to advance, the implementation of a series of policies to promote the high-quality development of the NEV industry, including continuing the vehicle purchase tax exemption policy and further promoting NEV and infrastructure construction to the countryside, will further stimulate market vitality and consumption potential.

Expertise in the automotive sector builds a competitive moat. Relying on the large-scale and intensive effects of railway transportation, Sanyangma has formed the characteristic of concentrating large-scale vehicles in the same batch into logistics production operations, and has large-scale scheduling and operation capabilities for production management of the entire vehicle logistics process. Using the location of the OEMs as a hub, the company has built a transportation network covering all parts of the country. In particular, it has a strong competitive advantage in the southwest, northwest and other regional market segments. Sanyangma has established long-term cooperative relationships with many well-known automotive OEMs. These stable downstream customer resources form an important industry barrier for the company.

The automotive industry has recovered steadily, and the company's business scale and profitability have increased. The company's operating income and gross profit mainly come from the automotive integrated logistics service business. In 2023, with the improvement of the external environment and the introduction of stimulus policies for the automobile industry in various regions, etc., the company's revenue increased; at the same time, as operating unit prices increased, partly hedging the adverse effects caused by rising diesel prices, etc., and gross margin rebounded steadily.

Profit forecast and investment advice: The company's net profit for 2024-2026 is estimated to be 2579.8, 3190, and 36.122 million yuan, respectively. We believe that the stable and healthy development of the automobile industry will drive the automobile logistics industry to continue to stabilize and improve. As a professional company in the automotive logistics field, Sanyangma is expected to fully benefit, and we recommend that you pay attention.

Risk Warning: Global Economy and Domestic Macros