The Zhitong Finance App learned that CICC released a research report saying that maintaining the “outperforming industry” rating of Aneng Logistics (09956), due to the company's cost reduction exceeding expectations and the strong implementation of the scale growth logic, the 2024/2025 net profit was raised 10.9%/15.7% to 693 million yuan/903 million yuan, corresponding adjusted net profit of 795 million yuan and 1,001 million yuan, respectively. Based on optimism about the company's long-term share growth and rising profit margins, the target price was raised by 13.3% to HK$8.5. The company's 1Q24 performance significantly exceeded this forecast.

According to the report, joining the express industry shows a clear sign of accelerated concentration, and the cost advantage is becoming the company's core competitiveness. The three major signals indicate an accelerated concentration of joining Express: ① 10 million tons of cargo volume has become a watershed in profit, and the gap between companies has widened; ② the capital market has returned to rationality, and the industry has not had large-scale financing in recent years; ③ leaders have adopted more proactive pricing and franchisee management mechanisms. Reviewing the LTL development process in the US, cost and cash flow are the core competitiveness of logistics companies during the integration period. It is recommended to continue to pay attention to the company's cost optimization process.

The bank said it is optimistic that Eneng Logistics's medium- to long-term cost reduction and scale growth will continue to be realized. Based on 1Q's profit exceeding expectations, compounding the increase in demand for goods in the subsequent peak season and sufficient “bullets” to reduce costs, the bank is optimistic that the company will enter a healthy growth path of “lower cost - better pricing - higher share - stronger scale effect”. Looking at the medium to long term, the bank is expected to concentrate on the franchise industry pattern, and there is still room for further improvement in the company's profit margin.