Recommended logic: JD.com Department of business flow tamps the basic market, operational efficiency & economies of scale continues to improve, infrastructure opening dilution costs, open the growth ceiling.
1) medium-and short-term: the volume and price of the platform, the external customer connected by JD Logistics, Inc., is on the rise. JD Logistics, Inc. 's revenue is expected to maintain a year-on-year growth rate of 35% from 2021 to 2023.
2) long-term: in coordination with JD.com, JD Logistics, Inc. is optimistic that the integration of consumer supply chain to industrial supply chain will bring about the enhancement of bargaining power, the consolidation of competitiveness brought about by scale effect and operational efficiency, and the dilution of costs brought about by the opening of infrastructure construction. And through extension mergers and acquisitions, new business (air lines, high-speed rail lines) to enhance long-term competitiveness.
Performance profile: the company's 21Q3 realized revenue of 25.75 billion yuan (+ 43.3%), and the operating loss excluding equity incentive fees and amortization of intangible assets was 730 million yuan. 2021H1 realized income of 48.47 billion yuan (yoy+53.7%) and net loss of 15.36 billion in the first half of 2021. Excluding the one-time effect of changes in the fair value of convertible redeemable preferred shares (12.8 billion yuan), the net profit of non-gaap in the first half of 2021 was-1.5 billion yuan (1.98 billion yuan in the same period of 20 years). Revenue composition: 2021H1 integrated supply chain customers contributed 33.62 billion yuan (+ 29.6%), accounting for 69.3% of the total revenue, while other customers contributed 14.85 billion yuan (+ 164.8%), accounting for 30.7% of the total revenue. By customer source, customers from JD.com Group accounted for 45.3 per cent of revenue in the first half of 2021. In terms of expenses: affected by the increase in open network and promotional activities, the sales expenses, R & D expenses and management expenses of 21H1 increased by 131.1% and 55.2% respectively compared with the same period last year to 13.8 / 1.51 billion yuan.
JD Logistics, Inc. builds core competitiveness through a complete warehouse and distribution infrastructure network, Big Boss organizational structure, and continuously improved operational efficiency:
1) build a moat in the warehousing network, enhance the expansion ability through "leasing + cloud warehouse" operation in a relatively light asset mode, and extend the business capability of mergers and acquisitions. According to the company's announcement, by the end of June 2021, the company's warehousing network included 38 Asia No.1, 1200 self-operated warehouses, more than 1600 cloud warehouses cooperated by Yuncang ecological platform, 210 sorting centers operated, more than 1000 air freight lines, and more than 1000 cooperative routes with China Railway Group, of which about 200 were high-speed rail routes. Operate more than 100 temperature-controlled cold chain warehouses, bonded warehouses and overseas warehouses designed for fresh, frozen and refrigerated products to 50. During the 618 period in 2021, 92% of districts and counties and 84% of villages and towns reached the same day and the next day. In August 2020, JD Logistics, Inc. acquired leapfrog Express to supplement aviation and trunk transport capacity; in September 2021, JD.com acquired a 26% stake in China's logistics assets, continuously enriching the warehousing network.
2) decentralization of the organizational structure of BigBoss inspires front-line motivation: according to JD Logistics, Inc. 's 2020 Prospect Conference, JD.com implemented the Bigboss mechanism in 2019, dividing small businesses and making decisions. After the implementation of the mechanism, the number of front-line distribution personnel with a monthly income of more than 20, 000 by JD Logistics, Inc. increased by 225% at the end of 2019, greatly improving the vitality of the organization.
Start with the training and incentive mechanism of grass-roots personnel to realize the transformation of "small groups, big business".
3) operational efficiency continues to improve: under the background of SKU exceeding 9 million, the inventory turnover days of 2021Q3 JD.com Group has dropped to 30.1days. According to Liu Qiangdong's speech at the 2018 "China Internet +" Digital economy Summit, the future inventory turnover days may be reduced to 20 days, and the operating efficiency will continue to improve.
Profit forecast and investment suggestion: the company's revenue from 2021 to 2023 is expected to be 1090Universe 1501 / 202.5 billion yuan respectively, the net profit from its parent is-158.8Compact 15.5 / 790 million yuan.The corresponding PS is 1.30.9percentile 0.7 times. The company is backed by JD.com Group and is already the largest integrated supply chain service provider in China. The decoupling strategy standardizes, modularizes and promotes reusability. And will continue to start from the head of the enterprise, from difficult to easy deep ploughing supply chain, it is suggested to actively pay attention to.
Risk tips: logistics industry competition aggravates the risk; logistics infrastructure expansion is less than expected risk; external customer expansion is not as expected risk; industry policy downside risk.