\u3000\u3 Shengda Resources Co.Ltd(000603) 713 Milkyway Chemical Supply Chain Service Co.Ltd(603713) )
Key investment points
Event: on April 10, 2022, the company issued the announcement of pre increase of performance in the first quarter of 2022. The company expects the net profit attributable to the parent company in 2022q1 to be 130 ~ 136 million yuan, with a year-on-year increase of 68.0% ~ 75.4%; It is estimated that the profit from deducting non return to parent is 126 ~ 132 million yuan, with a year-on-year increase of 64.4% ~ 71.9%. Under the influence of the Shanghai epidemic, the company still achieved a relatively bright profit growth in this quarter.
Multiple business lines go hand in hand, with broad prospects for material and trade integration and continuous high growth in performance: Milkyway Chemical Supply Chain Service Co.Ltd(603713) is the leader of China’s hazardous chemicals transportation, with the ability to perform global chemicals in multiple links. The company’s offline hazardous chemicals transportation network is a scarce resource and solid barrier. In recent years, the company’s freight forwarding business, global shipping and tank container, domestic trade transportation and other businesses go hand in hand, develop new businesses such as engineering logistics, and develop in the direction of “material and trade integration”. The e-commerce business space of industrial products is large and the growth rate is high. In 2021, the trading business of the company has achieved a revenue of 3.13 billion yuan, a year-on-year increase of + 353%. The synergy of logistics + trade is expected to enable the company to achieve sustainable growth in the future.
Everything in good order and well arranged operation and safety were kept in accordance with the WeChat public official account. In the evening of March 27th, the company established the “epidemic prevention headquarters”, actively implemented various epidemic prevention requirements, organized party members and cadres in epidemic areas to take the lead, returned to work posts, and ensured the orderly operation of all departments under the premise of ensuring health and safety. By April 6, all warehouses, vehicles, customs declaration, import and export businesses in Shanghai remained basically operational. In Shanghai and the Yangtze River Delta, the company has applied for a number of inter provincial operation permits to ensure the urgent needs of port shipment; Other coastal ports of the company are also actively operating to share relevant import and export needs.
Profit forecast and investment rating: we are optimistic about the development prospect of the company’s material and trade integration. At present, the penetration rate of e-commerce of industrial products is increasing, and the industry is in the stage of rapid development. Milkyway Chemical Supply Chain Service Co.Ltd(603713) is a rare industrial e-commerce enterprise with logistics foundation in the industry, with scarcity and solid development foundation. In consideration of the future development of the epidemic in Shanghai, we maintain the forecast of the net profit attributable to the parent company from 2022 to 2024 as 596 / 821 / 1087 million yuan, with a year-on-year increase of + 38% / 38% / 32%. The corresponding P / E of the closing price on April 8 was 31 / 22 / 17 times, maintaining the “buy” rating.
Risk tips: fluctuations in the supply and demand of industrial products, the impact of the epidemic, production safety risks, M & A integration less than expected, etc
