The company disclosed the results of the 2023 three-quarter report. In the first three quarters, the company's operating income reached 32.835 billion yuan, a year-on-year decrease of 6.84%; net profit of the mother reached 1,164 billion yuan, an increase of 56.05% over the previous year.
In 2023Q3, the company achieved operating income of 11.261 billion yuan, a year-on-year decrease of 9.15%, and net profit of 296 million yuan, an increase of 51.46% over the previous year, maintaining the company's holdings increase rating.
Key points to support ratings
Operating income has declined, business volume has been rising steadily, and net profit has increased markedly. The company achieved revenue of 32.835 billion yuan in the first three quarters, a year-on-year decrease of 6.84%. Market share increased by 0.5pct year over year. The company achieved an express delivery business volume of 4.86 billion units in the first three quarters, an increase of 6.4% over the previous year. The trend in revenue and business volume is mainly due to changes in the product structure of the express delivery industry, heated market competition, and adjustments in company settlement rules. From the supply side, the company not only continues to maintain overall network stability and consolidate and restore franchisee confidence, but also focuses on improving customer experience. The company's effective complaint rate in the third quarter was the best among comparable peers. Looking at the demand side, the company continues to focus on improving its competitiveness. Combined with industry rebound expectations and increased e-commerce consumer demand, it is expected that performance will be further improved.
The revenue, cost, and expenses of a single ticket have been reduced, and the cost structure has been continuously optimized. The company's 2023Q3 single ticket revenue was 2.22 yuan, a decrease of 7.0% over the previous month. The company's Q3 single ticket fee was 0.12 yuan, a year-on-year decrease of 0.05 yuan. From the price side, the company continues to optimize the express delivery network, product structure, and customer structure, making it superior to the industry in terms of volatility. From the cost side, the company continues to carry out cost control and optimization, continuously upgrade digital tools, and continue to be widely used in different scenarios. The continuous decline in transit center costs has benefited from fine management and the continuous improvement of the level of sorting automation; the reduction in transportation costs has benefited from route optimization and increased loading rates. The company firmly implements the strategy of shrinking the surrounding express delivery business and focusing on the main business. We expect the company to benefit from the scale effect, expand its marginal advantages, and continuously increase its market share.
Competition in the express delivery industry is fierce, company operations are constantly improving, and performance is expected to pick up in the future. The company's 2023Q3 gross margin increased 1.1 pct year on year to 8.6%. The company continues to improve the express delivery service network to ensure service quality, and continuously improve the efficiency of production capacity utilization in grid warehouse layout. In addition to this, with the deepening implementation of stock option incentive plans and employee stock ownership plans, the company's core team's enthusiasm for work is also increasing. Overall, with competition easing, bottom recovery, double recovery in volume and price, and declining cost industry trends, it is expected that the company's performance will be elastic.
valuations
Due to the significant decline in the company's single ticket revenue, we adjusted the company's profit forecast. It is estimated that the company's net profit for 2023-2025 will be 17.65/26.19/3.295 billion yuan, +19.0%/+48.4%/+25.8% year-on-year, and the EPS is 0.61/0.90/1.14 yuan/share, corresponding to PE 14.8/10.0/7.9 times, respectively, maintaining the company's shareholding growth rating.
The main risks faced by ratings
Demand growth fell short of expectations, competition among industries intensified, labor costs rose, and economic recovery fell short of expectations.