Event: Yongtai Yun publishes its semi-annual report 2023. In the first half of the year, the company achieved revenue of 1.2 billion yuan,-27.3% year-on-year; net profit of 100 million yuan,-25.5%; and deduction of 90 million yuan,-33.6%, from the same period last year.

Among them, the company's cross-border chemical logistics supply chain service achieved revenue of 790 million yuan,-49.5% year-on-year, accounting for 65.3%, year-on-year-28.7pp. Since the beginning of this year, the price of international sea freight has fluctuated obviously compared with the same period last year, resulting in a certain decline in the company's performance.

The number of operating boxes expanded significantly compared with the same period last year. The number of operating boxes is the main indicator of the company's service capacity. In 2023 and a half year, the number of service boxes in various business sectors of the company was 10900 TEU, which was + 26.2% compared with the same period last year. The company adjusts its business development strategy in time to stabilize the fluctuation of the company's main business performance caused by the price change of international sea freight through the growth of container volume and warehousing business.

The transportation market of dangerous chemicals is constantly expanding. With the refinement of the chemical market, the increasing degree of specialization and the requirements of supervision, the management cost of transportation links leads to an increase in the demand for transportation of hazardous products outsourced to qualified enterprises. In the first half of 2023, the total amount of social logistics in the country was 160.6 trillion yuan, an increase of 4.8% over the same period last year at comparable prices, and the cumulative growth of logistics demand for the year as a whole showed a rebound trend. At the same time, in recent years, the domestic dangerous chemicals market has grown at an annual rate of more than 100 billion yuan, with an average annual growth rate of + 8.8% from 2019 to 2022, exceeding the average growth rate of social logistics (+ 0.4%). The return of the track is significant.

Cross-border chemical logistics supply chain continues to improve. From 2017 to June 2023, the company broke through regional restrictions and improved the company's cross-border chemical logistics supply chain by acquiring high-quality warehouse resources in Tianjin, Qingdao, Shanghai, Zhoushan, Ningbo, Shaoxing, Hunan and other places. Relying on the mode of external acquisition emphasizing assets and internal assets operation, the company takes the initiative to broaden the moat of operation and improve its competitiveness in the industry.

With the recovery of overseas demand in the future, the company is expected to achieve simultaneous volume and price increases at home and abroad.

Profit forecast and investment suggestions: with the international macroeconomic recovery and the further expansion of the cross-border supply chain management market, with the role of the "Matthew effect" in the transportation industry of dangerous chemicals at home and abroad and the advantages in the layout of the company's domestic storage resources, the company's profitability has improved steadily. The company's annual return net profit in 2023-24-25 is expected to be 3.3,4.0 and 500 million yuan respectively. The EPS is 3.14,3.90,4.83 yuan respectively, and the corresponding PE is 12x, 10x, 8x respectively. We believe that under the company's long-term development strategy, cross-border chemical logistics supply chain services will maintain medium-and high-speed growth and maintain a "hold" rating.

Risk hints: macroeconomic fluctuation risk, transportation safety risk, exchange rate risk, geo-conflict risk and so on.