US Stock IPO Outlook | Revenue is rapidly expanding, how can Chengtian International (TTG.US) find new room for cross-border logistics growth?

For cross-border e-commerce companies, logistics is no longer just a simple transportation link, but a comprehensive service covering various aspects such as warehousing, international transportation, customs clearance, and terminal delivery.

Recently, Chengtian International (TTG.US), which focuses on providing integrated integrated logistics solutions for cross-border e-commerce and cross-border trading companies, submitted a prospectus to the SEC to be listed on the NASDAQ capital market.

Judging from the business model, Chengtian International is gradually building an integrated service system covering warehousing, international transportation, customs clearance and terminal delivery around cross-border logistics needs, mainly serving cross-border e-commerce platforms, freight forwarders and related enterprises.

In recent years, Chengtian International's cross-border logistics network has continued to expand. Can the company use its overseas network and customer resources to further transform the rapid growth in revenue scale into continuous profitability and long-term growth space?

The scale of revenue is expanding rapidly, and the cross-border logistics business unleashes momentum

The Zhitong Finance App learned that in recent years, Chengtian International's business scale has expanded rapidly. In 2024, the company's revenue reached about 648 million yuan, a significant increase compared to about 268 million yuan in 2023, mainly due to the expansion of the scale of the cross-border logistics business and the company's further expansion of large-scale cross-border e-commerce platforms and logistics enterprise customers.

Among them, end-to-end cross-border logistics services are one of the company's core businesses. Compared with traditional freight forwarders, this type of business covers more links. The company can start with cargo collection and further provide warehousing, international transportation, customs clearance, and overseas terminal delivery services. For cross-border e-commerce customers, this integrated service can reduce coordination costs between different logistics links, and also help improve the traceability and stability of the transportation process.

Furthermore, customer development is an important driving force for Chengtian International's revenue growth. According to the prospectus, the company has strengthened cooperation with large cross-border e-commerce ecosystems and logistics companies in recent years, including logistics business related to large-scale Chinese cross-border e-commerce platforms. As these platforms continue to enter overseas markets, logistics orders have also increased, bringing new business growth to the company.

On the market side, Chengtian International is not limited to a single market. Currently, the company's main logistics destinations include Australia, the United Kingdom, the European Union, Canada and the United States. In 2024, the company's package weight to Australia will account for about 29.7%, the UK about 26.64%, the EU about 16.72%, Canada and the US about 12.36% and 12.11%, respectively.

This multi-regional layout is important for cross-border logistics enterprises. On the one hand, e-commerce needs in different countries and regions can complement each other and reduce the company's dependence on a single market; on the other hand, as overseas logistics nodes continue to increase, companies can accept more customers and orders based on existing networks, thus gradually forming a scale effect.

It is worth mentioning that rapid expansion also means that the company is currently still in the stage of “prioritizing scale and improving efficiency simultaneously”. In 2024, the company's gross profit was about 69.26 million yuan, down from about 15.6% in 2023; net profit fell from about 11.61 million yuan in 2023 to about 6.7 million yuan, indicating that the company's revenue growth rate is currently significantly faster than profit growth.

However, from the other side, as the logistics network gradually matures, the company still has room to further improve profit efficiency in the future. For cross-border logistics companies, after the order scale is expanded, unit costs can be reduced by optimizing transportation routes, improving the utilization rate of storage and distribution resources, and enhancing bargaining power with suppliers. If the company can gradually transform its rapidly growing business scale into an increase in operational efficiency, profitability is also expected to improve.

Overseas networks are being formed at an accelerated pace. What is the room for future growth?

From a longer-term perspective, Chengtian International's growth space comes not only from the growth of its existing business, but also from the further expansion of its overseas logistics network.

The Zhitong Finance App learned that today, the development of cross-border e-commerce is driving the upgrading of logistics services from single transportation to integrated supply chain services. In the past, cross-border sellers may only need to solve the problem of “how to ship products overseas”, but as the scale of overseas orders expands, customers have higher and higher requirements for overseas storage, customs clearance, delivery time, and full-process logistics management.

As a result, companies that can cover multiple logistics links at the same time have more space to undertake business.

Currently, Chengtian International is strengthening its localized operation capabilities in markets such as the UK and Australia, and continues to expand other overseas markets. The company's current listing and fund-raising uses include further upgrading the logistics system, developing logistics technology, expanding the business network, and supplementing operating capital. For cross-border logistics companies in the expansion phase, capital market capital can help them improve overseas warehousing and distribution networks faster to meet more customer needs.

On the other hand, the company's cooperation with large cross-border e-commerce platforms and logistics companies has also provided a good customer base for future growth.

In particular, when large-scale e-commerce platforms continue to expand overseas markets, their logistics supply chains usually require strong stability and coverage capabilities. If Chengtian International can continue to expand its overseas network and continuously improve service efficiency, it will have the opportunity to further upgrade from a single logistics service provider to a comprehensive cross-border supply chain service provider.

It should be noted that the company's current profit scale is still small, and there is room for further improvement in gross margin. At the same time, the cross-border logistics industry itself will be affected by factors such as international transportation prices, exchange rates, and changes in overseas policies. Therefore, whether the company can further improve operational efficiency while maintaining revenue growth after listing will be an important indicator for measuring the quality of its growth.

Overall, the core logic presented by Chengtian International's current IPO is quite clear: on the one hand, the company has benefited from the growth in logistics demand brought about by cross-border e-commerce and the globalization of Chinese enterprises, and its revenue scale has expanded rapidly in recent years; on the other hand, the company is further building comprehensive cross-border supply chain capabilities through overseas networks, digital systems, and large-scale customer cooperation.

Therefore, what Chengtian International is concerned about is not only the current revenue scale, but whether it can rely on the established logistics network to transform new orders, overseas expansion, and digital capabilities into higher operational efficiency. If the company can continue to improve unit costs and profitability while expanding its business scale in the future, the scale effect of its business model is expected to be further reflected.

Seen from this perspective, Chengtian International is still expanding the global cross-border logistics market. In the future, changes in the company's business scale, customer structure, and profitability will be a few key dimensions for observing its growth space.