According to the news app, Zhongjin Securities released a research report for the first time covering Gogox-W(01519), giving it an 'outperform' rating with a target price of HKD 8. The company is a leading express delivery company in Asia with global business layout (in terms of package volume, the market share in 2023 is the first in Southeast Asia and the fifth in China). Its business covers 13 countries (including Latin America and the Middle East, referred to as emerging markets below)，and the bank is optimistic about the growth prospects brought by its mature network coverage and global vision. The market has not yet recognized the revenue growth potential of the company as a global express delivery company with the improvement of operating efficiency and long-term profit growth space.

CICC's main points are as follows:

There is still growth potential in the global express delivery industry, and Southeast Asia, China and emerging markets where the company is located are in different stages of development.

According to data from Frost & Sullivan, the express delivery volume in Southeast Asia will increase from 12.8 billion items in 2023 to 23.5 billion items in 2027 (CAGR is 16.5%); the total package volume in China will increase from 132.1 billion items in 2023 to 201 billion items in 2027 (CAGR is 11.1%); the size of emerging markets will increase from 3.9 billion items in 2023 to 7.1 billion items in 2027 (CAGR is 16.5%). The bank believes that due to factors such as the development of e-commerce, the miniaturization of packages, and the growth of return packages, there is still growth potential for express delivery.

Gogox-W is a global express delivery company:

It is a leading player in Southeast Asia, has strong competitiveness in China, and is constantly expanding in emerging markets (including Latin America and the Middle East). With its global express delivery network and platform-neutral characteristics, the bank expects Gogox-W to expand globally with diverse e-commerce partners: consolidate its leading position in Southeast Asia, maintain competitiveness in China, and expand rapidly in emerging markets.

The company's operating leverage is gradually becoming apparent:

The contribution of Southeast Asian business to stable profit growth, the gradual transformation of China region's operating profit, and the rapid expansion of emerging market business. From 2023 to 2025, the bank predicts that the CAGR of the company's revenue from Southeast Asia, China, and emerging markets will be 20.5%, 20.5%, and 43.7%, respectively. The bank predicts that the EBITDA margin in Southeast Asia will stabilize at 14-15%, the operating profit in China will turn positive this year, and the EBITDA in emerging markets will turn positive this year, and the operating profit may turn positive next year.

Potential catalysts: Mild coexistence of competition in the Chinese express delivery industry, operating efficiency of the company benefiting from the improvement of scale effects, and unexpected growth in emerging market revenue.