Company performance: In 2023, the company achieved operating income of 1.55 billion yuan, +22.5% year on year, net profit to mother of 30 billion yuan, +32.0% year on year; 2024Q1, the company achieved operating income of 380 million yuan, +1.1% year on year, and net profit to mother of 60 million yuan, -12.7% year on year.

The company's performance continued to grow well in 2023. In 2023, the company achieved operating income of 1.55 billion yuan, +22.5% year-on-year; net profit to mother was 3.0 billion yuan, +32.0% year-on-year. The company's comprehensive gross profit margin was 57.6%, +1.4 percentage points year-on-year, and the net profit margin to mother was 19.2%. The increase in the company's performance mainly benefited from the increase in storage tank volume brought about by the acquisition project. By the end of 2023, the company had a total tank capacity of 5.031 million cubic meters, operating a total of 64,900 square meters of chemical warehouses, and 94,400 square meters of chemical warehouses under construction. Split the company's core business segment integrated warehousing and transit services: 1) Terminal storage tank integrated service revenue of 1.37 billion yuan, +23.0% year-on-year; 2) Integrated logistics service revenue of chemical warehouses was 80 million yuan, +42.2% year-on-year.

Due to weak demand for warehousing, Q1 results declined year over year. 2024Q1, the company achieved operating income of 380 million yuan, +1.1% year over month, and -1.7% month on month; net profit to mother was 60 million yuan, -12.7% year on year, +7.6% month on month.

In terms of profit margin, 2024Q1's comprehensive gross profit margin was 52.7%, down 5.3 percentage points year on year, and net profit margin was 15.8%, down 2.5 percentage points year on year. We believe that the year-on-year decline in the company's performance was mainly due to weak demand from petrochemical warehousing customers (methanol imports fell sharply month-on-month and ethylene glycol supply fell sharply in the first quarter), and the decline in the rental rate of the company's new production capacity also had an impact.

Short-term performance is under pressure, and the long-term growth path is clear. In recent years, the company has continued to maintain dual main business operations and actively expand its business layout through mergers and acquisitions. The scale of the terminal storage tank and chemical warehouse business and the company's market share have continued to expand. In the medium to long term, the company's location advantage is obvious. It is expected that it will continue to expand in scale through the acquisition of high-quality assets, and as chemical warehouses under construction are put into operation over the next three years, the contribution of the second growth curve will gradually be reflected, and the company's long-term growth path is clear. Considering short-term fluctuations in warehousing demand, we updated our profit forecast. The company's net profit for 2024-26 is estimated to be 3.5/4.2/4.9 billion yuan, respectively. The current stock price corresponds to the 2024-26 P/E of 19.2/15.9/13.8 times, maintaining the “Highly Recommended” rating.

Risk warning: Acquisition progress falls short of expectations, warehousing demand falls short of expectations, risk of safe operation, risk of policy changes.