Core Viewpoint - Xinde Securities report indicates that Zhonggu Logistics, a leading player in domestic container shipping, has a strong profitability positioned at a high level within the industry [1] Group 1: Company Overview - As of October 2025, the company operates a fleet of 49 vessels with a total capacity of 2.5019 million deadweight tons, including 41 container ships with a capacity of 132,200 TEU [1] - The company's profitability is among the top in the industry, achieving a ROE of 16.86% in 2024, ranking third in the shipping sector [1] Group 2: Business Model and Services - The core business of the company is centered around domestic container logistics services, primarily focused on shipping, with an extension into land transportation [1] - The company provides integrated services between ports and the origin or destination of goods, enhancing its service offerings [1] Group 3: Financial Stability and Valuation - The company is experiencing stable cash inflows coupled with reduced capital expenditures, supporting its long-term dividend capability [1] - The report suggests that the company's current valuation is underestimated, initiating coverage with a "Buy" rating [1]

Investment Rating - The investment rating for the company is "Buy" [2] Core Views - The company is a leading player in domestic container shipping, with strong profitability and a robust dividend policy. It operates a fleet of 49 vessels with a total capacity of 2.5019 million deadweight tons, including 41 container ships with a capacity of 132,200 TEU. The company's return on equity (ROE) reached 16.86% in 2024, ranking third in the shipping sector [5][18][19]. Summary by Sections 1. Domestic Container Shipping - The company is a leader in domestic container logistics, providing comprehensive logistics services that extend from shipping to land transport. Its core business is supported by a diverse cargo structure, with key cargo types such as paper products, steel, and food each accounting for around 7% of the total [5][7][30][32]. 2. Foreign Trade Chartering - The foreign trade container shipping chartering market has seen increased demand following the Red Sea crisis in December 2023. The company’s fleet aligns well with the market demand for small to medium-sized vessels, and the structure of new contracts is improving, with longer terms and higher rental rates compared to 2024 [6][62][68]. 3. Cash Flow and Dividend Capability - The company plans to distribute 60% of its cumulative distributable profits in cash over the next three years. Historical dividend payout ratios are high, reaching 88% and 90% for 2023 and 2024, respectively [6][8]. 4. Profit Forecast and Valuation - The company is expected to achieve a net profit of 2.145 billion yuan in 2025, with revenue projections of 10.770 billion yuan. The estimated earnings per share (EPS) for 2025 is 1.02 yuan, with a price-to-earnings (P/E) ratio of 10.95 [8][10].