Main points of investment:

Event: Yongtai Yun released the third quarter of 2023 results report, the company's performance is lower than expected. Affected by the international shipping container rate, the prosperity of the chemical industry and the exchange rate, the net profit attributed to the owner of the parent company reached 142 million yuan in the first three quarters of 2023, down 42.2% from the same period last year. In the third quarter, the net profit attributed to the owner of the parent company was 38.7256 million yuan, down 63.82% from the same period last year.

In the third quarter of 2023, the price index of Chinese chemical products declined compared with that in 2022, and the prosperity of chemical industry was higher than that of Q2. According to iFind, the average price index of Chinese chemical products in the third quarter of 2023 was about 4697 points, down about 9 per cent from 2022Q3 and 0.6 per cent higher than Q2. As of October 27, 2023, the price index of China's chemical products has reached 4713 points, with a significant improvement compared with the previous month. It is expected that the prosperity of 2023Q4 chemical industry will continue to rise.

Independent investment construction and M & A together to enable the chemical supply chain integrated service platform capacity building. According to the company announcement on August 1, 2023, Nanjing Shengwangtai Logistics Technology Co., Ltd. (hereinafter referred to as "Nanjing Shengwangtai", the company holds 51%) intends to sign an Investment Agreement with the people's Government of Wuda District, Wuhai City, Inner Mongolia, to build a chemical supply chain service management base that radiates northwest China. The completion of the project will effectively integrate the related demand of chemical logistics within the radiation scope of the project. To achieve the core node infrastructure drainage effect, while effectively promoting the proportion of chemical compliance logistics in the region. On August 17, the company announced that it intends to acquire a 60% stake in Tianjin Ruibolong Wisdom supply chain Co., Ltd., in order to improve the company's strategic layout of chemical supply chain integration in the Bohai Rim region. The acquisition will bring new impetus to the company in customer base expansion and service capacity enhancement.

Private placement to major shareholders to inject new momentum into the expansion of the company's facilities network. On July 22, 2023, the company issued the 2023 preliminary Plan for issuing shares to specific targets, in which the company intends to issue additional shares to major shareholders and the total amount of funds to be raised shall not exceed 500 million yuan. Through this additional offering, the company will further expand its financial strength and inject new momentum into the follow-up network expansion of hazardous chemicals storage facilities nationwide.

Combined with the company's three-quarter report in 2023, maintain the "buy" rating: combined with the company's three-quarter report in 2023, taking into account the phased operating pressure brought by the decline in international shipping container rates and the weak recovery of the dangerous chemicals logistics industry, we cut the company's carton volume, individual income and gross profit margin per box from 2025 to 2025. Assuming that the year-on-year growth rates of cross-border chemical logistics supply chain boxes in 23-25 are 42%, 50% and 40% respectively (the original assumption is 60%, 40% and 30%), the per-box income in three years is RMB 117,000 / TEU (the original assumption is RMB 1.33,1.33 and 135m / TEU respectively) The gross profit margin per box for three years is 14% (it was originally assumed that the gross profit margin per box for 23-25 years was 14.8%, 14.8% and 14.5% respectively). Based on the above assumptions, we downgrade the company's profit forecasts for 23,24,25 years, and it is estimated that the net profit from 2023 to 2025 will be 1.86,2.80 and 380 million yuan respectively (the original profit forecast for 23-25 years is 3.21,4.40 and 557 million yuan), and the corresponding PE is respectively times that of 19-13-9. The current stock price has fully reflected the pessimistic expectation of worsening freight rates and low growth in the hazardous chemicals logistics industry, the current freight rate has been adjusted back to the pre-epidemic level, and the subsequent operation will remain stable, and this year the company's business volume level continues to grow and business continues to expand, we believe that the company is expected to realize profits in 24 years, with the current market capitalization corresponding to 24-year PE valuation 13x (October 31, 2023 data). Considering that the storage sector of the company's dangerous chemicals is comparable to that of Hongchuan, and the service segment of the company's cross-border chemical logistics supply chain is comparable to that of Milkewei, Hongchuan Wisdom and Milkewei are selected as comparable companies. According to iFind's consistent expectations, Hongchuan Wisdom and Milkewei's PE valuation in 2024 is 21x and 13x, respectively, and the average valuation of the comparable company is 17X. With regard to the average valuation level of the standard dangerous chemicals warehousing and logistics industry, considering that the company is currently in the period of investment, construction, mergers and acquisitions, and the business continues to expand, we believe that in 2024, the company's reasonable PE valuation multiple is 17X, corresponding to the target market value of 4.6 billion yuan, space 32.07%, maintaining the "buy" rating of Yongtaiyun.

Risk hint: safety operation risk, third-party dangerous chemicals logistics demand is less than expected risk, restricted stock lifting risk.