Hengtong Logistics(603223) Haitong Securities International·2025-04-02 07:43Investment Rating - The report initiates coverage with an "OUTPERFORM" rating [1][2]. Core Views - Hengtong Logistics is positioned to benefit from the Yulong Petrochemical project, with its port business entering a performance delivery phase, leading to significant revenue growth [3][4][6]. - The company has optimized its business structure, with port operations becoming the main growth engine, significantly increasing its gross profit margins [4][13]. - The port's strategic location and the influx of cargo from the Yulong Petrochemical project provide a competitive advantage, ensuring sustained demand for its services [5][29]. Financial Summary - The company reported a revenue of Rmb 2,002 million in 2024, with a projected increase to Rmb 2,391 million in 2025, representing a 19.4% growth [2][41]. - Net profit for 2024 was Rmb 155 million, expected to rise to Rmb 309 million in 2025, indicating a 99.14% increase [2][41]. - The diluted EPS is projected to grow from Rmb 0.22 in 2024 to Rmb 0.43 in 2025 [2][41]. Business Structure and Growth Drivers - Hengtong Logistics operates a comprehensive logistics business, including port construction and operation, road transportation, and LNG trading, primarily serving the Yulong Petrochemical industrial park [3][9]. - The port business achieved a gross profit of Rmb 1.28 billion in 2024, a 100.9% increase year-on-year, driven by the commencement of operations at the Yulong Petrochemical project [4][24]. - The company has established a strong foothold in the logistics sector, with plans for further expansion as the Yulong Petrochemical project progresses [18][39]. Future Outlook - The report anticipates continued growth in net profit, projecting Rmb 3.09 billion in 2025, Rmb 3.76 billion in 2026, and Rmb 4.10 billion in 2027, supported by the ongoing development of the Yulong Petrochemical project [6][41]. - The port business is expected to generate significant revenue, with forecasts of Rmb 6.62 billion in 2025, Rmb 7.86 billion in 2026, and Rmb 8.42 billion in 2027 [38][39]. - The strategic adjustments in the LNG business are expected to enhance profitability, despite a reduction in revenue due to a shift towards a lighter asset model [34][35].