Shentong Express discloses 2023 annual report and 2024 quarterly report

Shentong Express disclosed the 2023 annual report and 2024 quarterly report. The company's revenue in 2023 was 40.92 billion yuan, up 21.5% year on year, and net profit to mother was 341 million yuan, up 18.4% year on year; the company's revenue for the first quarter of 2024 was 10.13 billion yuan, up 15.9% year on year, and net profit to mother was 190 million yuan, up 43.2% year on year.

The number of orders is growing rapidly, and the market share has increased markedly

E-commerce express delivery continued to grow rapidly in 2023. The company's express delivery business reached 17.51 billion units, up 35.2% year on year, and the market share reached 13.26%, up 1.55 pcts year on year. The company's express delivery business volume was 4.59 billion units in the first quarter of 2024, up 36.7% year on year. E-commerce express delivery competition continues. The unit price of the company's express delivery business still declined year on year. In 2023, the express delivery business ticket revenue was 2.23 yuan, down 11.2% year on year, and 2.08 yuan in the first quarter of 2024, down 16.1% year on year.

Cost control continues to gain strength, and performance has improved markedly

In 2023, the company continued to push forward a three-year 10 billion production capacity improvement project, further boosting production capacity, improving utilization, optimizing the capacity structure, increasing the share of its own transportation capacity, and increasing investment in digital intelligence to improve operational efficiency. The cost of a single ticket continued to decline. For the full year of 2023, single ticket payment costs and transit costs were 1.35 yuan and 0.78 yuan respectively, down 10.0% and 12.6% year on year, respectively, and gross profit of single ticket was 0.087 yuan, down 18.1% year on year.

On the cost side, the company's overall expense ratio declined in 2023. Among them, sales, management, R&D, and finance expenses were 0.41%, 1.96%, 0.41%, and 0.44%, respectively. The year-on-year decrease was 0.12 pct, a decrease of 0.08 pct, an increase of 0.04 pct, and a decrease of 0.13 pct, respectively. In terms of other categories, the company's other earnings declined in 2023, but non-operating expenses also declined significantly, and performance increased year-on-year.

In the first quarter of 2024, the company's single ticket cost continued to drop significantly year on year. Combined business volume increased dramatically, and the company's performance improved markedly year over year.

Profit forecasts and investment advice

At the beginning of 2024, the number of express delivery orders continued to grow at a high rate, clearly exceeding market expectations at the beginning of the year. The company's order volume growth rate maintained its advantage over the industry's growth rate. In 2024, the company may continue to have stable capital expenditure, focus on the main economical express delivery business, implement a production capacity improvement strategy, consolidate the operating chassis, continuously implement digital intelligence transformation, deepen fine management, promote cost reduction and efficiency throughout the network, and enhance competitiveness. We expect the company's revenue in 2024-2026 to be 48.17 billion yuan, 53.97 billion yuan, and 59.34 billion yuan respectively, up 17.7%, 12.0%, and 9.9% year-on-year respectively. Net profit to mother will be 80 billion yuan, 1.2 billion yuan, and 15.1 billion yuan respectively, up 135.1%, 50.2%, and 25.5% year-on-year respectively. The first coverage gives a “buy” rating.

Risk warning:

The macroeconomic economy has declined, competition in the express delivery industry has intensified, and cost reduction and efficiency have fallen short of expectations.