Incidents:
On April 29, 2024, Yunda Co., Ltd. released its 2023 annual report and 2024 quarterly report:
On the financial side, in 2023, Yunda Co., Ltd. achieved operating income of 44.983 billion yuan, a year-on-year decrease of 5.17%; realized net profit of 1,625 billion yuan, an increase of 9.58%; net profit without return to mother of 1,390 million yuan, an increase of 0.07%; 2024Q1, Yunda shares achieved operating income of 11.156 billion yuan, an increase of 15.02% year on year; realized net profit of 412 million yuan, up 15.02% year on year.
On the operating side, in 2023, Yunda Co., Ltd. achieved an annual business volume of 18.854 billion tickets, an increase of 7.07% over the previous year, and express ticket revenue was 2.30 yuan, a decrease of 10.08% over the previous year. The 2024Q1 business volume reached 4.942 billion tickets, up 29.14% year on year; single express ticket revenue was 2.20 yuan, down 18.94% year on year.
Investment highlights:
Service levels and customer acquisition capabilities continued to improve. The business volume growth rate returned to 2022 due to the epidemic. The company's supply was limited, and the business volume growth rate was impacted, and the business volume fell 4.31% year on year; in 2023, with the gradual restoration of the company's supply side after the epidemic and the company made full use of its service performance and digital capabilities to continuously improve the company's service level and customer acquisition capabilities, the company's growth rate was gradually repaired. The business volume growth rate in 2023 increased 7.07% year on year, and since December 2023, the business volume growth rate began to exceed the industry growth rate. 2024Q1 business volume began to exceed the growth rate of the industry. The year-on-year increase was 29.14% (the industry grew 25.20% year over year), leading the industry by 3.94 pct.
Under the scale effect, the results of cost reduction and fee reduction were gradually realized. The net profit margin continued to improve. In 2023, the company gradually optimized and adjusted the transportation resource structure, increased the proportion of self-operated vehicles, optimized vehicle loading and tandem, and strengthened standardized vehicle management. In 2023, the company used intelligent sorting equipment and digital tools to improve sorting efficiency, and as production capacity climbed, sorting costs were also reduced. In the end, the company's core operating cost per ticket fell 11% year on year in 2023, the company's operating cost in 2023 decreased by 5.61% year on year, gross profit margin was 9.55%, up 0.42 pct year on year.
In terms of expenses, in 2023, the company continued to strengthen its core express delivery position through reasonable contraction of peripheral business and resource optimization. The four expenses fell 16.09% year on year, and the four cost ratios fell 0.66 pct year on year (sales/management/ R&D/finance expenses rates were -0.10/-0.33/-0.02/-0.21pct year on year, respectively). Ultimately, the company achieved a 9.58% year-on-year increase in net profit to mother and 3.61% year-on-year increase after deducting a net profit margin of 3.09% year-on-year 0.16pct
In Q1 2024, the company's volume grew rapidly, and cost and expense improvement measures continued. Although operating costs increased 6.79% year on year, gross profit margin was 10.33%, and the year-on-year decrease of 0.24 pct year on year, the company's four expenses decreased by 8.92% year on year, and the four expenses decreased by 0.80 pct year on year (sales/management/R&D/finance expense ratios -0.29/-0.35/-0.19/+0.03pct year on year, respectively). In the end, the company achieved a 15.02% year-on-year increase in net profit to mother and a 3.70% year-on-year increase in net profit margin to mother 0.27pct, net interest rate of 3.45% after deducting non-return to mother, an increase of 0.15pct over the previous year.
The company's net profit margin is expected to continue to recover as production capacity climbs after the company's cost reduction and fee reduction measures continue to grow.
Growth rate has returned and capital expenditure has peaked. We expect performance elasticity brought about by the company's cost and expense optimization under the rebalance of supply and demand
The growth rate of the express delivery industry in 2024 is still resilient (the 2024Q1 industry's business volume grew by 25.20% year on year, and the growth rate has remained above 20% since April according to Ministry of Transport data). On the supply side, the company's expansionary capital expenditure has basically ended since 2022. The company's supply and demand will enter a stage of rebalancing. The company will give full play to the scale effect and intensive effects, continue to reduce depreciation costs and variable costs of a single ticket, expand marginal advantages, and the company's costs and expenses are expected to continue to be optimized; in addition to costs and expenses, the company continues to optimize its network and improve service capabilities. It is worth looking forward to the investment opportunities brought by the company's high performance flexibility.
Profit forecast and investment rating According to the company's 2023 annual report and 2024 quarterly report, we introduced the 2026 profit forecast. We expect Yunda's 2024-2026 operating income to be 59.550 billion yuan, 66.808 billion yuan and 73.67 billion yuan respectively, and net profit to mother will be 2,232 billion yuan, 3.08 billion yuan and 3.828 billion yuan respectively. The corresponding PE for 2024-2026 will be 10.20 times, 7.57 times and 5.95 times, respectively, and the business volume growth rate will return to + service Quality improvement premium+production capacity downhill cost optimization, optimistic about investment opportunities brought by the company's high performance flexibility, and maintain a “buy” rating.
Risks indicate the risk of increased price competition, the risk that industry sentiment falls short of expectations, the risk of changes in regulatory policies, the risk of cost control falling short of expectations, and the risk of express delivery franchisees breaking out of positions.