CRT(SH:600125) Tianfeng Securities·2024-08-05 12:00Investment Rating - The report assigns a "Buy" rating for the company with a target price of 7.45 CNY, based on a comprehensive valuation approach [6][3]. Core Insights - The railway market reform is expected to release significant growth potential for railway freight, with a target of 25% of total freight turnover by 2035, up from 14.7% in 2023 [1][26]. - The company has actively expanded its special container business, achieving a compound annual growth rate (CAGR) of 8% in revenue and 14% in gross profit from 2018 to 2023, with a gross margin increase of 6 percentage points [2][32]. - The company is positioned to benefit from the "public transport to rail" policy, which has increased railway freight market share, although it faces pricing competition [4][25]. Summary by Sections 1. Railway Special Container Transportation - The company operates as a major player in railway special container logistics, with a focus on optimizing its business structure and increasing profitability in its core railway operations [12][19]. - The special container business has seen a significant increase in both revenue and gross profit, driven by strategic investments and market demand [19][35]. 2. Active Demand Exploration and High Growth in Special Container Business - The company has seen continuous growth in the quantity and volume of special containers, contributing to rapid revenue and profit growth [2][32]. - The turnaround speed of tank containers has improved, indicating strong demand and higher freight rates, which have positively impacted gross margins [2][32]. 3. "Public Transport to Rail" Policy Boosting Railway Freight Share - The policy has successfully increased the railway freight share from 11% in 2016 to 28% in 2020, although the company must navigate competitive pressures from road transport [4][25]. - The company has leveraged its strategic assets, such as the Sha-Ba Railway, to enhance its freight and logistics operations [4][25]. 4. Financial Forecast and Target Price - The company is projected to experience sustained profit growth from 2024 to 2026, with expected EPS of 0.41, 0.45, and 0.53 CNY, reflecting year-on-year growth rates of 13%, 12%, and 17% respectively [3][6]. - The financial metrics indicate a recovery in revenue and profitability, with a forecasted revenue of 14.98 billion CNY in 2024, up from 14.69 billion CNY in 2023 [3][6].