occurrences
Eneng Logistics released the 24Q1 performance report: In 24Q1, the company recorded operating income of 2,378 million yuan/ +15.2%, and adjusted net profit of 209 million yuan/ +173.9%. In 24Q1, the company's profit level improved significantly. Its gross margin reached 16.1%, up 5.7 percentage points from 10.4% in 23Q1.
reviews
Freight volume: 24Q1. The total freight volume completed by the company was 2,875,000 tons/ +21.7%, the total number of tickets was 31.568 million tickets/ +25.3%, and the average ticket weight was 91 kg/-2.9%. Among them, the volume of mini tickets (under 70 kg)/LTL (70 to 500 kg) for small tickets (70 to 500 kg) and LTL (500 kg or more) for large tickets increased by 24.8%, 20.8%, and 20.9%, respectively, over the same period last year.
Freight unit price: 24Q1. The company's freight unit price was 827 yuan/ton, down 5.4% year on year.
Among them, 1) the unit price of transportation services fell 10.7% year on year. On the one hand, due to 23Q1, the company adjusted the price system, the unit price base was high; on the other hand, since 23Q2, the company's distribution and transportation cost reduction results were remarkable. It actively conveyed the cost reduction results to outlets and terminal customers and participated in competition through flexible policies and pricing; 2) The unit price of value-added services increased 10.6% year on year, mainly due to the increase in ticket numbers; 3) The unit price of delivery services fell 4.4% year on year, mainly after the network was encrypted, the average delivery distance was shortened.
Cost: In 24Q1, the company's unit operating cost fell 11.3% year on year. Among them, main line transportation costs fell 8.0% year on year, and distribution center costs fell 27.1% year on year, mainly due to the company's continuous promotion of lean management: abolishing small distribution centers, reducing site area, optimizing leasing terms for existing sites, and improving the direct access rate of main line routes, thereby improving overall operational efficiency.
Profit prediction and recommendations:
We expect the company's gross margin to grow steadily in 2024-2026, mainly due to its cargo weight structure optimization strategy, cost price mechanism, scale effect, efficiency improvement, etc. We forecast that in 2024-2026, the company's adjusted net profit will be RMB 686 million, RMB 810 million, and RMB 934 million, respectively. We used the PE valuation method, based on comparable company valuations, and gave the company 14 times PE in 2024 to arrive at a target price of HK$8.95. Maintain an “better than the market” rating.
Risk warning: Macroeconomic growth falls short of expectations, freight volume growth falls short of expectations, industry competition is fierce, excessive reliance on franchisees, and human fuel costs have increased dramatically.