SINOTRANS(SH:601598) Huachuang Securities·2024-03-22 16:00Investment Rating - The report maintains a "Recommend" rating for China National Freight (601598), with a target price of 7.39 CNY, indicating a potential upside of 30% from the current price of 5.69 CNY [4][5]. Core Insights - The company reported a net profit attributable to shareholders of 4.22 billion CNY in 2023, a year-on-year increase of 4%, slightly exceeding expectations. The annual dividend payout ratio has been raised to 50% [2][5]. - Total revenue for 2023 was 101.7 billion CNY, a decrease of 7% year-on-year, while gross profit was 5.8 billion CNY, down 5% year-on-year, with a gross margin of 5.7%, up 0.1 percentage points [2][5]. - Investment income for 2023 was 2.33 billion CNY, a decline of 10% year-on-year, with significant contributions from Sinotrans DHL [2][5]. - The company has focused on enhancing shareholder returns, with a total dividend and share buyback accounting for 50.4% of net profit [2][5]. Revenue Breakdown - Freight Forwarding: Revenue was 61.9 billion CNY, down 11.5% year-on-year, with a gross profit of 3.3 billion CNY, down 18% [2][5]. - Professional Logistics: Revenue was 27.5 billion CNY, up 0.2% year-on-year, with a gross profit of 2.5 billion CNY, up 8.8% [2][5]. - E-commerce: Revenue was 12.3 billion CNY, up 3.3% year-on-year, with a gross profit of 0.06 billion CNY [2][5]. Future Outlook - The company has adjusted its profit forecasts for 2024-2026, expecting net profits of 4.49 billion CNY, 4.68 billion CNY, and 4.92 billion CNY respectively, with corresponding EPS of 0.62 CNY, 0.64 CNY, and 0.67 CNY [2][5]. - The report emphasizes the company's ongoing investment in transportation capabilities and overseas network expansion, including establishing subsidiaries in Hungary and expanding operations in Southeast Asia [2][5].