Cross-border e-commerce dividends: The entire logistics chain benefits. Focus on the triple dividends of cross-border e-commerce logistics for “point”, “line”, and “surface” enterprises. The three types of “point”, “line”, and “surface” enterprises should invest in opportunities. China's imports and exports are the basic driving force of the cross-border logistics service industry. Under the catalyst of brands going overseas, the entire downstream logistics chain benefits. In particular, the cross-border e-commerce market in China and Southeast Asia deserves attention. Currently, cross-border e-commerce logistics faces triple dividends: growth dividends, price dividends, and model upgrade dividends. Warehouses and express delivery enjoy the most growth dividends. The circuit with the strongest supply constraints is capacity. The upgrading of the freight forwarding business model also brings investment value. The entire logistics chain “point” companies (warehouses), “line” companies (that is, transportation and freight forwarding), and “noodle” companies (express delivery) all have investment opportunities. Among them, Jitu Express is the target of a “noodle” company with dividend value. Its business is mainly located in China and Southeast Asia, and is expected to fully benefit from cross-border e-commerce dividends.
Historical development review of GeTu Express: Seize local e-commerce dividends and rapidly expand its innovative model Jitu Express seizes the e-commerce development dividend period in Southeast Asia, China and emerging markets, and uses an innovative agency model with the support of strong investors, experienced teams that are good at seizing opportunities. According to Frost & Sullivan, in 2022, Jitu Express had a market share of 22.5% in Southeast Asia, ranking first; in China, it ranked sixth with a market share of 10.9%, and its market share in emerging markets also increased rapidly.
The company grasps market dividends under the innovative model of combining agents with important assets, and is expected to continue to maintain its growth trend.
Development direction of Jitu Express: From local to cross-border, overseas growth, domestic losses will be reduced, and overseas business losses will be reduced. As the company expands in emerging markets, it will first complete terminal coverage in each region, then expand the main line to provide cross-border services. The “front-end, then trunk line” layout idea is clear, and cross-border services and emerging market business have become the company's second growth curve. 2023H1 revenue growth rate of 135%, accounting for 14%; in terms of domestic business, the profit margin in 2023H1 China improved markedly. The company adjusted EBITDA to positive. There are still improvements in this performance There is plenty of room, and profit margins are expected to continue to improve. The company has transitioned from an expansion period to a new stage of balancing expansion and loss reduction. Reducing domestic losses and boosting growth overseas is the main line of the company's development.
Profit Forecasts and Investment Ratings:
We expect the company's revenue in 2023-2025 to be US$87.26/105.35/US$13.035 billion, respectively, and net profit to mother of -9.69/ -5.33/ US$130 million, respectively. The corresponding PS for 2023-2025 will be 2.1 times, 1.8 times, and 1.4 times, respectively. The company's local express delivery layout has prepared the first and last stop supply for the cross-border business, and has opened up main lines to provide cross-border services. With the continuous release of cross-border e-commerce dividends and the company's deep cooperation with cross-border e-commerce platforms such as SHEIN, the company's business volume may continue to grow rapidly, and profitability is expected to continue to increase. Covered for the first time, a “gain” rating was given.
Risk warning: Industry sentiment falls short of expectations; overseas business growth falls short of expectations; domestic business losses fall short of expectations; overseas policy risks of cross-border e-commerce; price war restart; regulatory policy changes; unstable franchise networks; rapid labor cost inflation; continued rise in oil prices; Internet companies are forced to intervene again; risk of large fluctuations in stock prices in the secondary market; differences between the Hong Kong stock valuation system and A-shares, etc.