Operating and financial data: Zhongtong Express released its 2024 quarterly report. In 24Q1, the company achieved revenue of 9.60 billion yuan, +10.9% year over year; realized net profit of 1,448 billion yuan, -13.0% year on year; achieved adjusted net profit of 2,224 billion yuan, +15.8% year over year. The company completed 7.171 billion units of business in the first quarter, +13.9% year-on-year.
The strategic focus was adjusted, and the profit level of a single ticket increased. In the past few years, the company's strategic goal was to balance service quality, business scale and profit, but at the beginning of '24, the company shifted its strategic focus to service quality, and while maintaining a reasonable business scale and good profit level, it paid more attention to creating differentiated products and services. 24Q1. Against the backdrop of continued price competition in the industry, the company adhered to the bottom line of “no loss-making express shipments”. Although the year-on-year growth rate of business volume in the first quarter was slower than the industry growth rate, and its market share declined, Zhongtong achieved a better single-ticket profit level. The company's single-ticket adjusted profit in the first quarter was 0.31 yuan, up 0.01 yuan year on year, up 0.06 yuan month-on-month, and achieved an increase in profit levels during the off-season. The main reason was that single ticket revenue fell only 0.04 yuan year on year, far below the industry average, and benefited from standardized and intelligent operations. In-depth, single ticket sorting and Transportation costs achieved a year-on-year decrease of 0.06 yuan.
Optimize the supply and demand environment, and focus on the investment opportunities of leading e-commerce express delivery companies. On the supply side, industry capital expenditure peaked in '21, corporate capital expenditure peaked in '23, and Zhongtong's capital expenditure fell 26.50% year on year in 24Q1, and the scale continued to shrink year on year; on the demand side, the company's annual business volume growth rate was 15% to 18%, and the company's capacity utilization rate is expected to continue to increase. Currently, the company's undervalued and high-growth attributes still exist, and emphasis is placed on the investment opportunities of leading e-commerce express delivery companies.
Profit forecasting and investment advice. EPS is expected to be 12.73, 14.89, and 17.42 yuan/share in 24-26, respectively, giving the company a 24-year PE valuation of 15 times. The corresponding reasonable values for Hong Kong stocks and US stocks are HK$210.31 per share and $26.54 per share, respectively, all maintaining a “buy” rating.
Risk warning. Industry demand growth fell short of expectations, industry price competition worsened again, franchise network operations were unstable, policy impact was uncertain, and macroeconomic environment was under pressure.