Core Viewpoint - Sinotrans has signed a Share Purchase Agreement to sell a 25% equity stake in Loscam International Holdings Limited for US$470 million, retaining a 20% stake post-transaction, which is expected to optimize its asset structure and enhance investment returns [1][2]. Group 1: Transaction Details - The sale of the 25% stake in Loscam International is valued at approximately Rmb3.38 billion, with Loscam being a leading company in the pallet leasing business [1]. - The transaction implies a P/E ratio of 28.4x based on Loscam's 2024 earnings, which is significantly higher than Sinotrans' A-shares and H-shares valuations [2]. Group 2: Financial Impact - The transaction is expected to generate an investment gain of approximately Rmb1.79 billion and cash inflows of around Rmb4.44 billion, including additional dividends of approximately Rmb1.06 billion from Loscam [2]. - It is estimated that the transaction could boost Sinotrans' net profit by Rmb1.35 billion, representing a 38% increase in 2025 earnings [3]. Group 3: Business Resilience and Dividend Yield - Sinotrans has shown strong business resilience, with a 9% year-on-year increase in sea freight forwarding volume in Q1 2023, despite facing cost pressures [4]. - The transaction may alleviate market concerns over 2025 earnings, with estimated dividend yields of 6.8% for A-shares and 9.2% for H-shares based on a 50% dividend payout ratio [4]. Group 4: Financial Forecast and Valuation - The earnings forecast for 2025 and 2026 remains unchanged at Rmb3.56 billion and Rmb3.70 billion, reflecting growth rates of -9.2% and 4.0% respectively [5]. - Sinotrans' A-shares and H-shares are currently trading at P/E ratios of 10.2x and 7.5x for 2025 [5]. Group 5: Ratings and Target Prices - The company maintains an OUTPERFORM rating on A-shares with a target price of Rmb5.80, implying an 11.9x 2025 P/E and a 17% upside [6]. - For H-shares, the OUTPERFORM rating is maintained with a raised target price of HK$4.75, implying a 9.0x 2025 P/E and a 19.9% upside [6].