Jiayou International(603871) 长江证券·2024-07-10 02:31Investment Rating - The report maintains a "Buy" rating for the company [6][5]. Core Insights - The company is a leader in cross-border transportation under the "Belt and Road" initiative, focusing on logistics infrastructure in Mongolia, Africa, and Central Asia, establishing strong barriers in logistics, trade, and resource collaboration [2][12]. - The report emphasizes the competitive strength and growth potential of the company's African operations, particularly in the Democratic Republic of the Congo (DRC), where abundant copper and cobalt resources are expected to drive rapid growth in transportation volumes due to the expansion of Chinese mining enterprises [2][31]. - The company's logistics assets in Africa are anticipated to accelerate performance, with significant growth in profitability expected from the acquisition of a major trucking company in Zambia and ongoing projects [5][57]. Summary by Sections Introduction: Restructuring Supply Chains in Africa - The global supply chain is being reshaped, with a focus on securing energy and strategic mineral resources from "Belt and Road" countries, including Russia, Mongolia, and the DRC [12][22]. DRC: A Rich Resource Base - The DRC is rich in copper and cobalt, becoming the world's largest producer of cobalt and the second-largest producer of copper in 2023. The country relies heavily on exports, with mining products constituting 91.9% of its total trade [31][32]. - Chinese companies, such as Zijin Mining and Luoyang Molybdenum, are significant players in the DRC's mining sector, with production expected to grow at a compound annual growth rate (CAGR) of over 15% in the next two years [31][91]. Transportation Resource Challenges - The DRC faces severe transportation challenges due to inadequate infrastructure, with most roads in poor condition and limited railway capacity. The company is addressing these issues through strategic projects like the Kasai project, which aims to enhance logistics efficiency [71][76]. Moving Towards Africa: Expanding Logistics Models - The company is replicating its successful logistics model from Mongolia to Africa, with the Kasai project becoming a crucial logistics hub. The project is expected to significantly increase profitability, with a reported gross profit growth of 242% in 2023 [78][80]. - Ongoing projects in Zambia and the DRC are set to create an integrated transportation network, enhancing the company's operational capabilities in the region [79][83]. Investment Recommendations - The report suggests that the company's African operations are poised for accelerated performance, with a robust network expansion expected to drive growth [47][5].