Key points of investment:
Incident: Yunda Co., Ltd. released performance reports for the first quarter of 2023 and 2024. In 2023, the company achieved operating income of 44.983 billion yuan, -5.17%; net profit to mother of 1,625 million yuan, +9.58% year over year; 24Q1 achieved operating income of 11.156 billion yuan, +6.50% year over year, and realized net profit of 412 million yuan, +15.02% year over year, net profit of 385 million yuan. The results were in line with expectations.
The company has been operating steadily for 23 years, and the volume growth rate picked up in the second half of the year. In 2023, the company completed 18.854 billion units, an increase of 7% over the previous year. Of these, the company completed 3.88 billion units in November-December, an increase of 30% over the previous year, and the volume growth rate improved.
In 23 years, the company actively adopted various measures to build and optimize the express delivery service network: in terms of network construction, the company continued to promote the “westward to outward” project, further increasing the coverage of county-level regions and township service networks, and greatly expanding the scope of services in rural areas, further consolidating the foundation of domestic business development; in terms of transportation management, the company mainly focuses on land transportation and adopts a combination of vehicle transportation modes to gradually optimize and adjust the transportation resource structure, increase the share of self-operated vehicles in capacity and strengthen standardized vehicle management. (Data from the company's annual report)? The volume growth rate in the first quarter continued the good growth trend, and the cost drop was obvious, which led to a recovery in performance. 2024Q1 completed a business volume of 4.942 billion units, an increase of 29% over the previous year. The volume growth rate was fixed, and the profit per ticket was 0.08 yuan/ticket, the same as 23Q4, and the operation continued to improve. The cost side declined significantly in the first quarter. The 24Q1 company's single ticket sorting cost was 0.34 yuan/ticket, down 0.08 yuan/ticket (18.4%) year on year; single ticket transportation cost was 0.42 yuan/ticket, down 0.16 yuan/ticket (28.1%) year on year.
The company adheres to a high-quality development strategy, continuously balances the interests of headquarters and outlets, and actively lays out terminal stations, grid warehouses and packaging warehouses, and is expected to continue to improve in the future. (Data from company announcements)? The profit forecast was lowered and the “gain” rating was maintained. According to data disclosed by the State Post Office, the revenue of the 2024Q1 express delivery industry increased 17.4% year on year, and the number of items increased 25.2% year on year. The volume growth rate is far ahead of the revenue growth rate, which means that unit prices have dropped a lot, industry competition is fierce, and there is some uncertainty about the company's single ticket profit due to the overall decline in unit prices. Therefore, we lowered our 24-25 profit forecast. Assuming that the net profit from a single ticket for 24-25 was 0.1 yuan/ticket (the original forecast value was 0.15 yuan/ticket), and the estimated net profit for 24-26 was 23.43/24.98/2,844 billion yuan, respectively (the original 24-25 forecast value was 35.1/3.66 billion yuan, an additional 26-year profit forecast), and the year-on-year growth rates were 44.2%/6.6%/13.9%, respectively, corresponding to the current PE multiples of 10x/10x/8x. The express delivery industry previously experienced a full decline in stock prices due to factors such as fierce price competition. According to the closing price calculation on May 7, 2024, the comparable company Shentong Express/Yuantong Express had a 2025 valuation of 11x/10x, respectively. Based on the valuation center, we gave a 25-year PE10.5x, corresponding to a target market value of 262 billion yuan and 11% space, maintaining an “increase” rating.
Risk warning: The degree of price competition in the industry exceeds expectations; the macroeconomic economy is declining, demand for express delivery is declining; there have been major changes in the industry pattern; and the franchise network is unstable.