Description of the event
Yuantong Express disclosed its 2023 annual report and 2024 quarterly report: In 2023, the company achieved operating income of 57.68 billion yuan, an increase of 7.7% over the previous year, and realized net profit of 3.72 billion yuan, a year-on-year decrease of 5.0%. Among them, with 2023Q4, the company achieved operating income of 16.93 billion yuan, an increase of 15.0% over the previous year, and realized a net profit of 1.06 billion yuan to mother, a decrease of 7.4% over the previous year. With 2024Q1, the company achieved operating income of 15.43 billion yuan, an increase of 19.5% over the previous year, and achieved net profit of 940 million yuan to mother, an increase of 4.1% over the previous year. In 2023, the company plans to pay a cash dividend of 3.5 yuan (tax included) for every 10 shares, with a corresponding dividend payment rate of 32.1%.
Incident comments
Shares are rising steadily, and cost optimization hedges down prices. In 2023, the company's volume increased by 21.3% year-on-year to 21.20 billion units, and its share increased steadily by 0.2 pct to 16.1%. Competition in the industry intensified, and the company's single ticket revenue fell 6.7% year on year (down 0.18 yuan year on year) to 2.41 yuan. The company continues to deepen digital transformation, optimize the capacity structure and main routes, implement lean production, and achieve impressive cost optimization. The cost of a single ticket decreased by 6.0% year on year (down 0.14 yuan from the previous year) to 2.18 yuan. Among them, single ticket payment/single ticket transportation cost/single ticket operation cost decreased by 0.05/0.05/0.02 yuan, respectively. Non-net profit from single express deductions fell 12.6% year on year (down 0.03 yuan year on year) to 0.18 yuan.
Q4 The share was steady, and single ticket profit improved month-on-month. 2023Q4, the company's volume increased by 28.9% year on year, and the share increased by 0.2 pct year on year. The price of a single ticket decreased by 0.23 yuan year on year and increased by 0.09 yuan over the previous month. The gross profit for a single ticket was 0.26 yuan, down about 0.08 yuan year on year, and increased by about 0.01 yuan month on month. Due to the decline in aviation and freight forwarding business profits, air freight prices and fuel prices affected profits, single ticket profits declined and increased month-on-month. If this factor is excluded, Q4 Express's net profit performance is steady.
Q1 The volume growth was steady, and the profit from a single ticket remained stable. 2024Q1, the company's component volume increased by 24.9% year on year, maintaining a relatively high growth rate. The price of a single ticket decreased by 0.09 yuan year on year and increased by 0.01 yuan from month to month. Price competition in the industry is relatively moderate. The net profit of single express delivery reached 0.17 yuan, a year-on-year decrease of 0.02 yuan, showing profitability resilience. The gross profit of the air cargo business declined due to the market environment. In the end, the company's net profit to mother increased 4.1% year on year, and express delivery net profit increased 11.9% year on year.
Capital expenditure was relatively stable, and freight increased cash flow fluctuations. In 2023Q4/2024Q1, the company's capital expenditure was 1.26/1.4 billion yuan respectively, up 11.6%/20.0% year-on-year, maintaining the capital expenditure level. In 2023Q4/2024Q1, the company's net cash flow from operating activities was 2.23/580 million yuan, respectively, down 7.6%/56.5% year-on-year respectively. In Q4, the net cash flow from operating activities declined due to a year-on-year increase in freight charges paid by the company to carriers. In 2023, the company's dividend per share was 0.35 yuan, a year-on-year increase of 40%. The company's total cash dividends reached 1,574 billion yuan (dividend amount of 1,195 million yuan+repurchase amount of 379 million yuan), paying more attention to shareholder returns.
Deeply involved in digital transformation, optimistic about a sharp rise in volume and profit. The company continues to deepen digital transformation, deepen cost optimization through lean production, continuously improve service quality, enhance product pricing capabilities, promote international development, and enhance comprehensive service capabilities. Industry demand exceeds expectations and competition is moderate, and the company is expected to achieve balanced development in volume, profit, and service. The company's net profit for 2024/2025/2026 is estimated to be 42.1/50.6/5.97 billion, and the corresponding PE is 13.0/10.8/9.2X, respectively, maintaining a “buy” rating.
Risk warning
1. Price competition in the industry has intensified;
2. Macro demand recovery falls short of expectations;
3. Labor and oil price costs have risen sharply.