In the first half of the year, the benefits spanned the merger and the company strengthened the development of external customers, and the company's revenue increased by 54% to 48.5 billion yuan, which was significantly faster than the same period last year. However, due to the policy dividend during the epidemic period, such as road exemption and social security relief last year, and the company is currently in the early stage of developing integrated supply chain customers, the cost has risen a lot. The company adjusted the return net profit to-1.5 billion yuan in the first half of the year (1.98 billion yuan in the same period last year).

In the short term, the company will continue to develop external customers of the integrated supply chain, and it is recommended to pay attention to revenue growth and customer development.

2021H1 JD Logistics, Inc. 's income increased by 54% to 48.5 billion yuan, while the net profit returned to his mother decreased by 176% to-1.5 billion yuan.

In the first half of the year, the benefits across the table-continue to expand external customer business, the company's revenue increased by 53.7% to 48.47 billion yuan, the revenue side maintained a high growth level, but the cost and expense side also showed a significant increase compared with the same period last year. The company's operating costs rose 70 per cent in the first half of the year, outpacing revenue growth, causing gross profit margins to fall by 9.2pcts to 3.7 per cent. In the first half of the year, the company's sales / R & D / management expenses increased by 131%, 55%, and 59% to 1.38 billion / 1.38 billion / 1.51 billion, respectively, and the rate for the promotion period (excluding financial income and expenses) increased to 8.8% by 1.1pcts.

The company's first-half net profit / adjusted net profit is-152 billion yuan /-1.5 billion yuan respectively (the adjusted net profit is down 176%). The gap between the net profit and the adjusted net profit is mainly due to the fact that the company confirmed a variable loss of 12.8 billion yuan in the fair value of convertible redeemable preferred shares in the first half of the year.

The expansion of external customers is rapid, and the revenue of non-integrated supply chain keeps growing rapidly. In the first half of the year, the company's integrated supply chain / other customer income increased by 29.6%, respectively, from 164.8% to 33.62 billion / 14.85 billion yuan. The high increase in other customer income was mainly due to the consolidation effect brought about by the acquisition completed in the second half of last year. At the same time, the company's personal express also maintained good growth. In terms of specific integrated supply chain business, the company's internal integrated supply chain / external integrated supply chain revenue increased by 65.6% to 21.9 billion / 11.7 billion yuan respectively. JD.com Mall's steady GMV growth promoted the company's internal integrated supply chain business to maintain good growth, while the beneficiary company maintained a high customer development rate (the number of external customers increased by 59% to 59067 in the first half of the year). The company's external integrated supply chain revenue maintained rapid growth, and the proportion of external customer revenue in the integrated supply chain increased by 7.6pcts to 34.8% compared with the same period last year.

Short-term business development leads to higher costs, the company continues to layout infrastructure, deep ploughing integrated supply chain industry. In the first half of the year, the company's labor costs / outsourcing costs / leasing costs / depreciation amortization / other costs increased by 49% up to 17.2 billion / 19 billion / 4.5 billion / 3.6 billion / 5.1 billion. The increase in outsourcing costs is mainly due to the increase in the procurement of transport capacity & the increase in costs brought about by the consolidation of tables, and the increase in rental costs, mainly due to the expansion of the leasing of warehouses, sorting centers and distribution stations. For the development of integrated supply chain logistics business. In the first half of the year, the company continues to increase the layout and investment in warehouse network, transportation network, last kilometer network, bulk network, cold chain network and cross-border network. Good infrastructure is the chassis for the development of the company's integrated supply chain business. In the first half of the year, the company continued to cultivate the integrated supply chain business, which significantly improved XIAOMI's supply chain operation efficiency and deepened the cooperation between the two sides, while providing one-stop service from the factory to the national circulation link for the well-known furniture brand Zhihuas. it also launched "Jinghui" products (standardized supply chain optimization products), and combined with logistics services, widely served small and medium-sized customers. Help small and medium-sized customers to improve supply chain efficiency, reduce inventory and improve logistics efficiency.

Risk factors: labor, fuel and other costs are rising rapidly; competition in the supply chain logistics industry has intensified; the growth rate of logistics revenue from JD.com Mall has slowed down significantly; the company's long-term profit margin is lower than expected.

Investment suggestion: the short-term company is still in the pre-investment and development stage of its business, and its profitability is expected to remain low, but revenue is expected to maintain good growth. We slightly downgrade the company's annual core profit EPS forecast for 2021-22-23 to-0.44 shock 0.30 shock 0.17 yuan (the original forecast-0.40 shock 0.24 plus 0.22 yuan) Due to the recognition of the fair value change loss of large convertible preferred shares after the listing of the company, we have significantly reduced the company's return net profit forecast for this year. The current market capitalization of the company corresponds to the PS of 2021 to 2023 income is 1.2 PE 0.7 times, and the company's profit is expected to pick up significantly in the long run. Based on the assumption of forward 30 times PS and 5% net interest rate, we believe that the company's reasonable PS valuation is 1.5 times, calculating JD Logistics, Inc. 's target market value of 215.8 billion yuan in the next 12 months, corresponding to the target price of 42 Hong Kong dollars, and maintaining the "buy" rating.