Key points of investment:
Incident: Jiayou International announced a preliminary increase in its 2024 semi-annual results. It is estimated that net profit attributable to the owner of the parent company will be 0.746 billion yuan to 0.796 billion yuan in 2024. Compared with the same period last year, it will increase 0.242 billion yuan to 0.292 billion yuan, an increase of 48% to 58% over the previous year. Overall performance exceeded expectations.
The cross-border logistics market between China and Mongolia is developing well, and the company's business model innovation is driving a high increase in business volume. The import and export volume of Ganqimaodu and Erlianhot ports reached new highs in the first five months of 2024. According to Ganqimaodu Port statistics, Ganqimaodu Port completed a total import and export cargo volume of 16.8249 million tons from January to May 2024, an increase of 29.73% over the previous year, including 16.2974 million tons of imported coal, an increase of 30.01% year on year, laying the foundation for the company's integrated cross-border logistics business between China and Mongolia. In the first half of 2024, the company acquired 20% of Khangad Exploration LLC's shares and signed a long-term coal cooperation agreement with Mongolian Mining Corporation to explore a highly competitive “resource+trade+logistics” business model, thus further consolidating the company's core competitiveness in the China-Mongolia cross-border logistics market.
The African sector created a second growth curve, and business in the Central Asian market developed rapidly. The company's African business segment grew steadily in the first half of 2024. After completing the acquisition of 80% of Reinsberg Holding AG's shares, the company's inland transportation business network layout in Africa was further deepened, which helped the company build a transportation network in Central and Southern Africa integrating highways, ports, logistics nodes and ports. The Central Asian market also developed rapidly in the first half of the year. From January to May 2024, the import and export trade volume between China and the five Central Asian countries reached 259.6 billion yuan, an increase of 14.8% over the previous year; the import and export cargo volume of Khorgos Port exceeded 17 million tons, an increase of 12% over the previous year. Benefiting from the positive trend of rapid increase in import and export trade volume and price, the company's business volume in the Central Asian market continues to grow thanks to the location advantage of the Khorgos Port customs supervision site.
In line with the company's 2024 semi-annual performance advance announcement, adjust the profit forecast and maintain the “purchase” rating: In line with the company's 2024 semi-annual performance advance announcement, considering the sharp increase in the company's main coking coal business volume in China and Mongolia, the steady growth of the cross-border multimodal transport business sector, and the profit contribution of African highway and dry port projects, the profit forecast for 24, 25, and 26 was raised. The company's 2024E-2026E net profit is expected to be 1.584, 1.779, and 2.01 billion yuan (the original 24-26 profit forecast was 1.313, 1.556) , 1.768 billion yuan), corresponding PE is 11/9/8 times, respectively. Maintain Jiayou International's “buy” rating.
Risk warning: The number of customs clearance vehicles at Ganqimaodu Port fell short of expectations, the price of main coking coal fell sharply, traffic on African highways fell short of expectations, and geopolitical risks.