Revenue was under pressure in '23 but profits achieved steady growth. We are optimistic that Yunda Co., Ltd. will release results for 2023 and 1Q24:1) Achieved operating income/net profit of $44.98 billion/1.63 billion yuan in 23, -5.2%/+9.6% year over year; 2) 1Q24 achieved net profit to mother of 410 million yuan, an increase of 15.0% year on year. In '23, industry demand was weak and competition continued, compounding the company's business strategy adjustments, putting pressure on the company's business volume growth rate and single ticket revenue, suppressing the level of operating income; however, the company achieved strong cost reduction through measures such as optimizing the transportation resource structure, applying digital tools, and building grid warehouses, and achieved a good growth rate on the profit side of the company. Looking ahead to 24 years, we expect the company's component volume growth rate to continue to recover, and the share is expected to increase year-on-year, driving the company's performance. However, considering that industry competition still suppresses single ticket prices, we lowered our 2024/2025 net profit forecast by 20%/20% to 2.10 billion/2.56 billion yuan, added our 2026 net profit forecast by 3.0 billion yuan, and lowered the target price by 18% to 10.9 yuan, corresponding to 15x 2024E PE (comparable company Wind's unanimous expectation) to maintain “buying.”
The increase in volume was small in '23, and single ticket revenue declined year-on-year
In terms of volume, the company's component volume increased 7.1% year on year to 18.85 billion pieces in '23 (industry/Shentong/Zhongtong/Yuantong: +19.4%/+35.2%/+23.8%/+21.3%), and the market share was -1.6 pct to 14.3% year over year (Shentong/Zhongtong/Yuantong: +1.5pct/+0.8pct/+0.2pct). In terms of price, the company's single ticket revenue fell 9.0% year on year to 2.37 yuan (Industry/ Shentong/ Zhongtong/ Yuantong: -4.5%/-11.3%/-11.3%/-6.9%). The company's volume growth rate was low in '23, and the company's business strategy was adjusted, leading to a decline in short-term market share.
Significant cost-side optimization, significant increase in gross profit per ticket
In '23, the company's single ticket cost/gross profit per ticket was 2.16 yuan/0.14 yuan, respectively, -11.8%/+30.8%, and the gross margin of the express delivery business was +0.4 pct to 9.6% year over year. The main reason for cost-side optimization is that companies improve the per capita efficiency of transit centers, optimize vehicle resources and adjust management models, and use digital tools to improve capacity utilization and equipment turnover. The company's sales/management expense ratios were -0.1 pct/-0.3 pct year-on-year, respectively, and the cost reduction effect was obvious. We are optimistic that the company will improve operational efficiency through refined management and continue to reduce costs to support steady profit growth.
The number of pieces increased year-on-year in the first quarter, and the company's performance was improving
In 1Q24, the company achieved net revenue/return to mother of 11.16 billion yuan/410 million yuan, an increase of 6.5%/15.0% year-on-year.
In terms of volume and price, the company completed 4.94 billion packages, an increase of 29.1% year on year; the average price of each package was -15.9%/-4.4% yoy to 2.20 yuan. The company's volume increased significantly in the first quarter, and strong demand for terminals is expected to continue in the second quarter, supporting the company's component volume growth rate. In the medium to long term, the company's perfect express delivery service network guarantees service quality, digital tools and automation equipment improve capacity utilization, and the grid warehouse layout improves terminal delivery efficiency. We are optimistic that the company's profitability will continue to improve, and the profit side is expected to maintain steady growth.
Risk warning: The volume growth rate is lower than expected; the cost reduction effect is lower than expected; price competition worsens.