Zhonggu Logistics(SH:603565) Dongxing Securities·2025-03-04 10:35Investment Rating - The report gives a "Buy" rating for Zhonggu Logistics, indicating a positive outlook for the company's future performance [6][14]. Core Views - Zhonggu Logistics is a leading player in the domestic container shipping industry in China, with a robust logistics network and strong profitability despite industry challenges [1][19]. - The company has a high dividend payout ratio, which is attractive to investors, with a commitment to distribute at least 60% of its cumulative distributable profits over the next three years [14][19]. Summary by Sections Company Overview - Zhonggu Logistics, established in 2003, is a leader in domestic container shipping, integrating rail and road resources to form a comprehensive logistics network [1][7]. - The company has developed a multi-modal logistics system centered on waterway transport, covering major coastal and inland ports across China [2][19]. Business Expansion and Profitability - The company ranks second in terms of capacity and revenue in the domestic container shipping sector, with a strong focus on maintaining high profit margins and stable earnings [3][55]. - Despite industry volatility, Zhonggu has managed to maintain a profit margin of around 13%, showcasing its operational efficiency [47][60]. Competitive Advantages - Zhonggu's profitability is supported by its refined management capabilities and cost advantages in shipbuilding, allowing it to optimize logistics processes and reduce operational costs [4][71]. - The company has invested in a self-developed comprehensive management system that enhances efficiency across the entire logistics chain [65][64]. Industry Demand Drivers - The long-term growth of the domestic container shipping industry is supported by trends such as the shift from road to water transport and the increasing adoption of multi-modal logistics [5][13]. - The report highlights that the proportion of water transport in China's logistics is expected to rise, driven by government initiatives to improve multi-modal transport infrastructure [5][13]. Financial Forecast and Recommendations - The projected net profits for Zhonggu Logistics from 2024 to 2026 are estimated at 1.6 billion, 1.77 billion, and 2.04 billion yuan, respectively, with corresponding PE ratios indicating attractive valuations [14][15]. - The company is committed to high shareholder returns, with a dividend yield forecasted to reach 5.2%, 5.7%, and 6.6% over the next three years [14][19].