The 2023 results were slightly lower than our expectations, and the 1Q24 results were slightly better than our expectations for the company to announce 2023 results: revenue of 44.983 billion yuan, -5.17% year over year; net profit to mother of 1,625 billion yuan, +9.58% year over year, net profit of 1,390 billion yuan excluding net profit of non-return to mother, +0.07% year on year.
4Q23: Revenue of 12.147 billion yuan, -0.34% year on year; net profit attributable to mother was 461 million yuan, or -37.47% year on year; net profit without return to mother was 420 million yuan, or -39.28% year on year. Considering that 2H23 still has price competition in the industry, it is slightly lower than our expectations. In terms of single ticket data, the cost of a single ticket in 2023 was -0.29 yuan to 2.16 yuan year on year, thanks to scale effects and cost control. Among them, single ticket payment was -0.13 yuan year over year, single ticket transportation and operation costs -0.11 yuan year over year, single ticket gross profit -0.02 to 0.23 yuan year over year, and single ticket net profit was 0.09 yuan, which was basically the same year on year. Single ticket deducted non-net profit of 0.07 yuan and -0.01 yuan year on year.
The company also announced 1Q24 results: revenue of 11.156 billion yuan, +6.50% year-on-year; net profit to mother of 412 million yuan, +15.02% year-on-year, net profit of 385 million yuan excluding non-return to mother net profit of 385 million yuan, +11.50% year-on-year. In terms of single ticket data, the company's 1Q24 business volume +29.1% reached 4.942 billion units, and the new-caliber market share was 13.3% (+0.4ppt): corresponding single ticket revenue was 2.26 yuan, down 0.48 yuan year on year; single ticket transportation and operation costs were -0.24 yuan to 0.76 yuan year on year, a significant improvement; single ticket net profit of 0.08 yuan and single ticket deducted non-net profit of 0.08 yuan, all remained flat month-on-month, down 0.01 yuan year on year, slightly better than our expectations.
Development trends
Industry level: Express delivery demand data continues to improve, and the volume growth rate is expected to continue to exceed expectations. According to the Post Office, the 1Q24 volume was +25.2% year-on-year, exceeding market expectations. We believe that due to live e-commerce, small packages, and returns, the annual growth rate is expected to exceed the previous forecast of 10-15%. There is limited room for unit price reduction. The peak of capital expenditure in the industry has passed, investment is in a downward cycle, and the competitive situation is manageable; considering the direction of high-quality regulatory development, we believe that there is limited room for price decline in the industry this year, and there is still room for cost optimization. Specifically, Yunda 1Q24 single-ticket express revenue was +0.08 yuan month-on-month.
Looking ahead to the future market, if business volume continues to grow at a high level and capacity utilization rate increases, superimposed cost control will bring flexibility in profit repair. We believe that as the volume of goods continues to grow at a high level, product service capabilities continue to improve, and cost control capabilities improve, the company is expected to show flexibility in profit repair: 1) the company's capital expenditure is in a downward channel; 2) continuous optimization of ticket costs under scale effects and refined cost control; 3) Single ticket fees continue to be optimized, and financial expenses are expected to continue to decline as the balance sheet improves. The company's shareholder returns increased steadily. In 2023, the dividend was 493 million yuan, with a dividend ratio of 30%, corresponding to +227% to 0.17 yuan per share, and the total dividend repurchase amount reached 513 million yuan.
Profit forecasting and valuation
Considering that the company's volume growth was better than expected, the price was not strong month-on-month, and the slight year-on-year increase in single ticket profit was weaker than previously anticipated, we lowered our 2024/2025 profit forecast by 10.8%/18.2% to 23.2/2.79 billion yuan. The current price corresponds to 9.8/8.1x P/E. Considering that the company is in a phase of flexible release of quantitative growth and repair of profit growth, we have maintained our outperforming industry rating and target price unchanged, corresponding to 13.5/11.2x P/E in 2024/2025, with 37.6% space.
risks
The courier business volume fell short of expectations, and the competitive pattern was repeated.