Brief performance review

On August 27, 2024, Yongtaiyun released the 2024 semi-annual report. 2024H1 achieved operating income of 1.85 billion yuan, a year-on-year increase of 77.5%; net profit to mother of 0.06 billion yuan, a year-on-year decrease of 40%. Among them, Q2 achieved operating income of 1.18 billion yuan, an increase of 110% over the previous year, and realized net profit of 0.03 billion yuan to mother, a decrease of 58% over the previous year.

Management analysis

Supply chain trade revenue increased dramatically, driving overall revenue growth. 2024H1's revenue increased 77.5% year on year, mainly due to the increase in supply chain trade service revenue. By business: (1) Cross-border chemical logistics supply chain business revenue was 0.96 billion yuan, up 22.76% year on year. Due to the strong shipping market, the company's operating tank volume in the first half of the year was 0.0748 millionteU, up 11% year on year, and single box revenue increased 10% year on year; (2) revenue from supply chain trade services was 0.7 billion yuan, up 370.6% year on year; (3) Road transport service revenue was 0.066 billion yuan, up 126% year on year; (4) Warehouse storage service revenue was 0.049 billion yuan, up 4.3% year on year.

Decreased exchange earnings are compounded by depreciation, and profits are under pressure in the short term. 2024H1's gross margin was 10.4%, a year-on-year decrease of 6.3 pct. The main reasons were: (1) changes in revenue structure.

The revenue share of the 2024H1 supply chain trade business increased by 24 pct to 37.9%, and its gross margin was 6.22%, which is lower than the company's overall level; (2) the gross margin of the cross-border chemical logistics supply chain business decreased by 4.98 pct to 11.41%. In terms of expense ratios, the 2024H1 company's expense ratio for the period was 4.1%, down 0.5 pct from year on year. Among them, the sales expense ratio decreased by 0.9 pct and the management expense ratio decreased by 1.2 pct, mainly due to a combination of factors such as a year-on-year increase of about 9.9 million yuan in exchange earnings compared to the same period last year, and a compounded increase of about 26.8 million yuan in accrued credit impairment losses. The net profit of the 2024H1 company to mother was 0.06 billion yuan, the same A decrease of 40% compared to that.

Having the ability to integrate resources and location advantages will ensure sustainable business performance. Up to now, the company has more than 0.5 million square meters of scarce land resources with superior geographical location, convenient transportation conditions, and meets cross-border logistics requirements across the country, and is equipped with more than 200 professional hazardous chemical transport vehicles at different bases. At the same time, the company's location advantage is obvious. The business is mainly concentrated in Ningbo Port, Shanghai Port, Qingdao Port, Tianjin Port and other regions. Good port location advantages provide the company with a huge customer base and abundant supply base. Our ability to integrate resources and location advantages will help ensure the sustainability of business performance.

Profit Forecasts, Valuations, and Ratings

The 2024-2026 net profit forecast was lowered to 0.14 billion yuan, 0.21 billion yuan, and 0.27 billion yuan (originally 0.25 billion yuan, 0.33 billion yuan, 0.44 billion yuan). Maintain a “buy” rating.

Risk warning

Risk of falling freight rates beyond expectations; risk of fluctuations in the chemical industry; risk of safe operation; risk of policy regulation; risk of mergers and acquisitions falling short of expectations.