The results for the first quarter of '24 showed steady year-on-year growth. In the first quarter of 2024, the company achieved operating income of 9.96 billion yuan, a year-on-year increase of 10.9%; realized net profit of 1.43 billion yuan, a year-on-year decrease of 14.6%; and achieved adjusted net profit of 2.22 billion yuan, an increase of 15.8% over the previous year.
The year-on-year decline in the company's unit price in the first quarter narrowed markedly, and the growth rate of business volume also slowed. In the first quarter of 2024, the company stuck to the bottom line of “express delivery without loss” and the price strategy was tightened, resulting in a business volume of 7.171 billion units in the first quarter, an increase of 13.9% over the previous year. The growth rate slowed and the performance was weaker than the industry and peers (in the first quarter, the volume growth rates of industry, Yuantong, Yunda, Shentong and Jitu were 25.2%, 24.9%, 29.1%, 36.7%, and 46.1%, respectively), which led to a decrease in market share compared to the same period last year, but still far higher than that of peers. The single ticket price for the company's core express delivery service fell 2.5% year on year in the first quarter. Compared with the unit price of -18.2% year on year in the fourth quarter of last year, the decline narrowed sharply from month to month.
The company's single-ticket express delivery operating costs in the first quarter were clearly optimized year-on-year, and single-ticket express profits showed steady year-on-year performance.
The company's single ticket transportation costs and single ticket transit costs for the first quarter were 0.47 yuan and 0.30 yuan respectively, with year-on-year changes of -7.0% and -5.4%, respectively. The reduction in unit transportation costs is mainly due to scale effects, optimization of trunk route planning, and improvement of loading rates; the reduction in unit transit costs is mainly due to improved equipment automation efficiency, implementation of standardized operation, and optimization of talent assessment systems. As the year-on-year decline in single ticket prices narrowed, the gross profit of single ticket for core express delivery services in the first quarter was 0.42 yuan, an increase of 0.02 yuan and 0.06 yuan year-on-year, respectively. In the end, the company's net profit for a single ticket for the first quarter (after adjustment) was 0.31 yuan, an increase of 0.01 yuan and 0.06 yuan year-on-year, respectively, and the performance increased steadily. The company's capital expenditure for the first quarter was 1.69 billion yuan, a significant year-on-year decrease (2.30 billion yuan in the same period in 2023). The high point of the company's capital expenditure has passed, and it is expected that the level of capital expenditure will continue to decline throughout 2024.
Risk warning: Price competition worsens; e-commerce express delivery demand growth is lower than expected.
Investment advice: Maintain a “buy” rating.
Considering the adjustment of the company's competitive strategy, we slightly adjusted the company's profit forecast. Net profit due to mother is estimated to be RMB 100.2/118.4/13.49 billion yuan (24-25 adjustment range -5.5%/-3.5%), respectively, up 14.5%/18.2%/13.9% year-on-year, respectively. Zhongtong Express has been balancing the balance between service quality, business scale, and profit growth for a long time. We believe that short-term market share fluctuations are the company's efforts for long-term sustainable development. At this stage, the company's long-term investment value is prominent, maintaining the company's “buy” rating. Currently, the PE valuation of the stock price corresponding to 24-25 EPS is 14X and 12X, respectively.