High revenue growth, adjusted net profit loss
The company achieved operating income of 48.5 billion yuan in the first half of 2021, +53.7% year on year; adjusted net profit loss was 1.50 billion yuan, profit for the same period last year was 1.98 billion yuan; and Guimu's net profit loss was 15.4 billion yuan.
Continuing to cultivate six major industries, the share of external customer revenue increased sharply in the first half of 2021. In the first half of 2021, the company's total revenue grew 54%. Among them, external customers contributed 26.5 billion yuan, a year-on-year growth rate of 110%, and the revenue share increased to 54.7% (46.1% in 2020). Based on its high-quality integrated supply chain services, the number of external integrated supply chain customers increased to 59,000 yuan, an increase of 59% over the previous year. At the same time, the average revenue of a single customer increased to 197,000 yuan in the first half of the year (189,000 yuan in the same period last year). The company continues to cultivate in the six major industries of FMCG, clothing, home appliances and furniture, 3C, automobiles and fresh food, represented by Xiaomi. In June of this year, cooperation between the two sides further deepened, and a warehouse and distribution center was built in Tianjin to cover the fulfillment of all categories of Xiaomi products throughout the country. JD Logistics provides one-stop logistics services such as collection, sorting, warehousing, packaging, and delivery.
“Reduced epidemic support+increased network investment” caused adjusted net profit to change year-on-year from profit to loss in the first half of this year. The gross margin fell from 12.9% in the same period last year to 3.7% in the first half of this year, mainly due to (1) the reduction in government support benefits related to the epidemic this year, including highway tolls and social security cost relief; (2) Beginning in the second half of 2020, the company strengthened and expanded its logistics network, including increasing warehouse space, transportation routes and other logistics infrastructure, 2020H1, 2020H2, 2021H1's capital expenditure It was 1,400, 1.8 billion yuan, and 1.6 billion yuan respectively. Furthermore, the increase in equity value after the company went public caused a loss of 12.8 billion yuan from changes in the fair value of convertible and redeemable preferred shares in the first half of the year, which is an unrecurring profit and loss.
Risk warning: Competition in the industry has worsened, and the expansion progress of external customers has fallen short of expectations.
Investment advice: Give a “buy” rating
Taking into account changes in non-recurring profit and loss and increased investment, we lowered our performance forecast. The net profit attributable to the mother for 2021-23 is estimated to be -160.3/-1,56/1.24 billion yuan respectively (the absolute value for 21-23 was reduced by 137/66/0.4 billion yuan), respectively. Considering that the company has huge room for development and the certainty that it will grow into a logistics giant is very high, we gave the company a target PS of 1.5-1.6 times in '21, got a target price of HK$31-33, and gave it a “buy” rating.