SINOTRANS(SH:601598) Tianfeng Securities·2024-03-03 16:00Investment Rating - The report initiates coverage with a "Buy" rating for the company [4][6]. Core Views - The cross-border e-commerce sector is poised for growth, presenting new opportunities for comprehensive logistics leaders like the company [2][3]. - The company is a leading global integrated logistics service provider, ranking second in global sea freight forwarding and eighth in air freight forwarding in 2022 [1][22]. - The company has a robust employee incentive mechanism, enhancing operational resilience and performance [1][24]. Company Overview - The company operates under the unified logistics platform of China Merchants Group, focusing on three main segments: professional logistics, agency and related services, and e-commerce [1][18]. - The company has maintained a steady profit growth, with a compound annual growth rate (CAGR) of 18% in net profit from 2011 to 2022 [29]. Financial Performance - In 2022, the company's revenue was approximately 108.82 billion yuan, a decrease of 12.49% year-on-year, while net profit attributable to shareholders was about 4.07 billion yuan, reflecting a 9.56% increase [5][29]. - The company expects revenues of 97.99 billion, 105.56 billion, and 113.91 billion yuan for 2023, 2024, and 2025, respectively, with projected net profits of 4.04 billion, 4.37 billion, and 4.73 billion yuan [4][5]. Market Opportunities - The report highlights a structural opportunity in cross-border e-commerce logistics, particularly with the growth of platforms like SHEIN and Temu, which are expected to drive the company's e-commerce logistics back into an upward trajectory [3][40]. - The air freight market is showing signs of recovery, with a narrowing decline in year-on-year performance, indicating potential for growth in cross-border logistics [2][43]. Business Segments - The company’s revenue breakdown in 2022 was 64% from agency services, 25% from professional logistics, and 11% from e-commerce, with corresponding gross profit contributions of 58%, 39%, and 3% [18][19]. - The professional logistics segment is expected to continue driving high-margin growth due to its tailored solutions for clients [34]. Valuation - The report estimates the company's earnings per share (EPS) for 2023, 2024, and 2025 to be 0.55, 0.60, and 0.65 yuan, respectively, with a price-to-earnings (P/E) ratio projected at 11x, 10x, and 9x [4][5].