Brief performance review

On April 9, 2024, Yongtaiyun released its 2023 annual report. In 2023, the company achieved operating income of 2.119 billion yuan, a year-on-year decrease of 26.99%; realized net profit of 150 million yuan to mother, a year-on-year decrease of 48.97%. Among them, Q4 achieved operating income of 569 million yuan, a year-on-year decrease of 5.26%; realized net profit to mother of 08 billion yuan, a year-on-year decrease of 83.2%.

Management analysis

Export freight rates fell year on year, and revenue fell year on year. In 2023, the company's revenue fell 27% year on year. Among them, cross-border chemical logistics supply chain services achieved revenue of 1,564 billion yuan, a year-on-year decline of 42.0%, mainly due to a sharp drop in export freight rates. 1) Volume: In 2023, the company completed 2481 thousand TEU of service boxes, an increase of 34.6% over the previous year; of these, cross-border chemical logistics completed a business volume of 145,500 TEU, an increase of 27.1% over the previous year. 2) Price: Cross-border chemical logistics revenue in 2023 was 10.7 million yuan, down 54.4% year on year. The main reason is that port blockages improved in 2023, effective global shipping supply increased dramatically, and the average export freight SCFI index in 2023 was 1005.8, down 70.5% year on year.

The gross margin decreased year over year, and the cost ratio increased year over year. In 2023, the company achieved a gross profit margin of 15.2%, a year-on-year decrease of 1.8 pct. The main reason was the decline in industry freight rates. In terms of cost ratio, the company's expense ratio for the 2023 period was 6.7%, up 3.1 pct year on year, mainly due to the year-on-year decline in the company's revenue. Among them, the sales expense ratio was 2.2%, up 0.3 pct year on year; the management expense ratio was 4.2%, up 1.6 pct year on year, mainly due to the company's acquisition of companies such as Shaoxing Changrun Chemical, Hunan Hongsheng, Tianjin Ruibo, etc.; the R&D expenses rate was 0.3%, up 0.2 pct year on year; and the financial expense ratio was -0.05%, up 0.95 pct year on year. The year-on-year decline in gross margin compounded the year-on-year increase in the expense ratio. In 2023, the company's net profit margin was 6.8%, down 3 pcts year over year.

Continue to expand the scale of warehousing and capacity, and accelerate the global business layout. 70% of the company's chemical logistics service products are hazardous chemicals, and storage and transportation resources are scarce. In 2023, the company continued to integrate high-quality offline resources. Up to now, the company owns and manages nearly 550,000 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. Looking forward to the future, the company will continue to deeply cultivate the main chemical logistics supply chain service business, accelerate the global business layout and industrial chain expansion, and achieve epitaxial development through mergers and acquisitions.

Profit Forecasts, Valuations, and Ratings

Considering the freight rate trend, the company's 2024-2025 net profit forecast was adjusted to 250 million yuan and 330 million yuan, and the net profit returned to mother for 2026 was increased by 400 million 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.