Overview - The dangerous goods warehousing industry in China has seen significant growth, with a market size reaching 392.4 billion yuan in 2022, reflecting a year-on-year increase of 6.28% [6][8] - However, the market is expected to slightly decline to 388.1 billion yuan in 2024 due to various factors such as global geopolitical conflicts, inflation pressures, and uneven economic recovery [6][8] Industry Chain - The upstream of the dangerous goods warehousing industry involves the production, processing, and supply of hazardous materials, including chemical raw materials and explosives [4] - The downstream consists of industries such as chemicals, pharmaceuticals, energy, and cosmetics, which are the primary demanders of dangerous goods warehousing services [4] Current Development - The industry plays a crucial role in the logistics system for hazardous materials, providing comprehensive storage and related services to ensure safe and efficient operations [6][8] - The demand for dangerous goods logistics is increasing due to the growth of high-risk industries in China [6][8] Competitive Landscape - The dangerous goods warehousing industry has high specialization and is subject to strict safety and environmental regulations, creating significant entry barriers [10][11] - The top ten companies in the hazardous goods warehousing sector include Milky Way Intelligent Supply Chain Service Group, Shanghai Changji Supply Chain Management, and others, with Milky Way leading in warehouse area at 679,000 square meters [12][14] Company Analysis - Milky Way Intelligent Supply Chain Service Group reported a total revenue of 12.12 billion yuan in 2024, with a significant portion coming from integrated logistics services [14] - Guangdong Hongchuan Smart Logistics Co., Ltd. achieved a total revenue of 1.45 billion yuan in 2024, primarily from comprehensive storage and transfer services [16] Development Trends - The future of the industry will see increased application of IoT technology and big data analytics to enhance monitoring and emergency response capabilities [18] - There will be a stronger focus on green development, with companies adopting environmentally friendly materials and optimizing logistics to reduce energy consumption and carbon emissions [18]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 9.70 [7][8]. Core Views - The company reported a revenue of RMB 1.45 billion for 2024, a decrease of 6.3% year-on-year, and a net profit attributable to shareholders of RMB 158.3 million, down 46.6% year-on-year, which was below expectations [1][4]. - The decline in profitability is primarily attributed to weak demand in the downstream petrochemical industry, leading to lower rental rates and occupancy for storage tanks and chemical warehouses [1][2]. - Despite the weak overall demand for petrochemical storage, the company expects a slight improvement in profitability in 2025 due to new project launches [1][4]. Summary by Sections Financial Performance - In 2024, the company's gross profit was RMB 720 million, a decline of 19.3% year-on-year, with a gross margin of 49.6%, down 8.0 percentage points [2]. - The gross profit from terminal tank services decreased by 21.1% year-on-year, while the gross profit from chemical warehouse services increased by 7.3% year-on-year [3]. Revenue and Profit Forecasts - The revenue growth rate for terminal tank services is projected to decline, while the gross margin is also expected to decrease due to weak demand [12][13]. - The net profit forecasts for 2025 and 2026 have been reduced by 47% and 38% respectively, to RMB 175.3 million and RMB 255.1 million [4][22]. Market Conditions - The report highlights significant uncertainty in the global macroeconomic environment due to tariffs, which may impact the demand for petrochemical storage [4]. - The company anticipates that the overall demand for petrochemical storage will remain weak, but new projects may provide some support for revenue [1][4].