Key points of investment
2023 Annual Report Results: The adjusted EBITDA in 2023 was corrected, and the results were in line with expected results: The company's overall revenue in 2023 was US$8.849 billion, +21.8% year-on-year. Among them, the express delivery business achieved revenue of 8.09 billion US dollars, +24.7% year-on-year, accounting for an increase of 91.4% from 89.2% in 2022; cross-border service revenue was US$660 million, -6.8% year-on-year, mainly due to the company's business transformation and adjustment, which shut down the cross-border small package business. Gross profit of US$470 million, a significant improvement compared to the same period in 2022; net profit to mother of US$1,101 billion was achieved, and adjusted EBITDA of US$147 million turned a loss into a profit.
As of the end of 2023, the company's operating cash flow was US$340 million, which was corrected; the cash balance was US$1.53 billion, which remained abundant. Overall, the company's operations in 2023 were relatively steady, and performance improved, in line with expectations.
Operating data: In 2023, the company handled a total of 18.81 billion packages, +29% over the same period last year. At present, the company's network has fully covered seven Southeast Asian countries, with a county-level coverage rate of over 99% in China, and has also quickly achieved over 95% coverage in new markets. As of December 31, 2023, the company has about 8,500 network partners and about 1,600 outlets, and operates 237 transit centers, more than 3,900 trunk routes and more than 9,600 mainline vehicles, including more than 5,100 own-line vehicles.
Southeast Asia market: The market share reached a new high of 25.4%, and profitability continued to be steady.
Performance: Achieved operating income of US$2.63 billion in 2023, +10.6% year on year, adjusted EBITDA of US$376 million, +13.3% year over year, adjusted EBITDA rate of 14.3%, up 0.4 pct from 13.9% in 2022, and is progressing steadily. The Southeast Asian market continues to maintain a healthy and sustained level of profitability.
Operating data: The number of packages handled by the company in Southeast Asia in 2023 was 3.24 billion, +28.9% over the same period last year. According to Frost & Sullivan's data, the company is the number one express delivery operator in Southeast Asia in terms of package volume in 2023, with a market share of 25.4%. Compared with +2.9 pct in 2022, it continues to consolidate the company's leading position and competitive advantage in Southeast Asia. Judging from the growth in the express delivery market, the company's package volume increased by 730 million units year-on-year in 2023, while the total number of packages in the express delivery industry increased by 1.60 billion, and the company obtained most of the increase in the express delivery industry.
Single ticket data: In 2023, the company's single ticket revenue in the Southeast Asian market was 0.81 US dollars, down 0.14 US dollars from 2022; in 2023, the company improved integration of outlets that did not meet quality standards, improved the operating efficiency of outlets, and increased delivery frequency. The cost of integrated vehicle resources was significantly reduced. In 2023, the cost of a single ticket in the Southeast Asian market was 0.67 US dollars, -11.8% year over year, down 0.09 US dollars from 2022; of these, the cost of a single ticket package and delivery was 0.4 US dollars, a decrease of 0.03 US dollars, and transportation costs were 0.17 US dollars, a decrease of 0.05 US dollars. In the future, the company is expected to continue to maintain its competitive advantage in the stock market with first-mover advantage, excellent service and competitive prices.
China market: Adjusted EBITDA was corrected for the first time.
Performance: In 2023, we achieved revenue of US$5.23 billion, +27.7% year-on-year, and adjusted EBITDA of US$0.3 billion, which was corrected for the first time.
Operating data: In 2023, the number of packages handled by the company in China was 15.34 billion, compared with 12.03 billion in 2022, +27.6% year over year, exceeding the industry growth rate. The market share was 11.6%, +0.7 pct year on year. The company's growth in package volume in China is mainly due to deepening cooperation with existing e-commerce customers while expanding partnerships with more e-commerce platforms. The company cooperated with more vertical e-commerce platforms in 2023, and basically completed full platform coverage. At the same time, it has also seized the opportunities brought by the rapid growth of social e-commerce. Continuously improve service quality to enhance customer acquisition capabilities.
Single ticket data: In 2023, the company's single ticket revenue in the Chinese market was $0.34, the same as in 2022. The overall cost of a single ticket fell from $0.40 in 2022 to $0.34 in 2023. Among them, the company's single ticket collection and delivery costs remained the same, at $0.20. Transportation links: As of December 31, 2023, the company operated more than 6,100 trunk line vehicles in China, of which more than 3,700 were its own trunk line vehicles, an increase of more than 900 compared to December 31, 2022. Transportation efficiency has been improved through continued investment in its own mainline vehicles. In 2023, the company's single ticket transportation cost was $0.07, a year-on-year decrease of $0.02. Sorting process: As of December 31, 2023, the company operated 83 transit centers in China. The company is cautious about investing in self-construction of transit centers, mainly leasing. In 2023, two self-built transit center projects were launched in Yangzhou and Guangzhou. Among them, the Yangzhou Self-built Transit Center is expected to be put into use in the second half of 2024, and the Guangzhou Self-built Transit Center is expected to be put into use in 2025. The cost of sorting a single ticket in 2023 was $0.06, down $0.02 year over year.
New market: The loss rate has narrowed drastically, and the scale effect is beginning to appear.
Performance: The new market achieved revenue of US$327 million in 2023, +299.7% year-on-year, and adjusted EBITDA of -80 million US dollars. The adjusted EBITDA rate was -90.2% in 2022 to -25% in 2023, and the loss ratio narrowed sharply.
Operating data: The company achieved rapid growth in new markets. The number of packages increased by 369.0% from 49.1 million in 2022 to 230.3 million in 2023, and the market share increased from 1.6% in 2022 to 6.0% in 2023. Mainly due to the company's continuous improvement of network carrying capacity, expanding and deepening cooperation with cross-border e-commerce platforms and local e-commerce platforms, and continuing to seize new opportunities for e-commerce market growth.
Single ticket data: The company entered the new market in 2022, and is still in a stage of rapid development in 2023. Due to changes in the package volume structure of different e-commerce platforms, the new market's single ticket revenue in 2023 was $1.42, -15% over the same period last year.
In 2023, the company is still in the investment stage in the new market. By increasing investment in transit center equipment, increasing mainline vehicles, and building new outlets, the company will further enhance network carrying capacity to meet growing market demand. By the end of 2023, the new market had 35 transit centers, more than 200 mainline vehicles and a large number of feeder vehicles, and more than 1,300 outlets. The cost of a single ticket fell from $2.05 in 2022 to $1.41 in 2023; of this, the cost of single ticket collection and delivery was $0.84, a decrease of $0.09, and transportation costs were reduced from $0.71 to $0.26. Mainly due to the rapid increase in package volume in the new market, the scale effect was initially evident.
Profit forecasting
Considering that the company continues to maintain its competitive advantage in the Southeast Asian market, as volume increases, new market size advantages appear, and price competition in the Chinese market is expected to slow year-on-year, we expect GeTu Express's net profit to be -3.43/1.47/ 198 million US dollars respectively, corresponding to PS of 1.2 times, 1.1 times, and 0.9 times, respectively, maintaining an increase rating.
Risk warning
There are downside risks to the economy, the industry's growth rate is lower than expected, the express delivery price war worsens, and overseas business progress falls short of expectations.