Investment title:
Incident: Zhongtong Express announced 2024Q2 results. In 2024Q2, the company achieved operating income of 10.73 billion yuan, a year-on-year increase of 10.1%, achieved net profit of 2.61 billion yuan, +3.3% year-on-year, and adjusted net profit of 2.81 billion yuan, an increase of 10.9% over the previous year. The company's package volume in the second quarter of 2024 was 8.45 billion pieces, up 10.1% year over year.
Focus on balanced growth and strengthen loose order collection. Volume: The company achieved 8.45 billion express deliveries in the second quarter of 2024, +10.1% year over year, 19.6% market share, and -2.0pp year over year. The company continued to focus on balanced growth strategies, optimize the volume structure, and promote the transformation from high quantity to high quality, and its market share declined. Price: The company's 2024Q2 single ticket express delivery business revenue was 1.17 yuan, -0.3% year on year, and core single ticket revenue was 1.24 yuan; cost: Single ticket sorting cost was 0.26 yuan, up 1 cent year on year; single ticket transportation cost was 0.39 yuan, down 3 cents year on year; gross profit of express single ticket was 0.52 yuan, up +2.6% year on year. Looking at the first half of the year, the cost of sorting a single ticket was 0.28 yuan, the same as the previous year; the transportation cost of a single ticket was 0.43 yuan, down 3 cents from the previous year.
Operational efficiency continues to improve, and profitability continues to be optimized. 2024Q2 achieved gross profit of 3.62 billion yuan, +9.6% year over year, net profit of 2.61 billion yuan, +3.3% year over year, and adjusted net profit of 2.81 billion yuan, up 10.9% year on year. Looking at the first half of the year, the company achieved gross profit of 6.62 billion yuan in 24H1, +13.6% year on year, and adjusted net profit of 5.03 billion yuan, +13% year over year. Looking at the single ticket situation, the company's net profit after the 24Q2 single ticket adjustment was 0.33 yuan/ticket, +0.7% year-on-year. Profitability continues to increase thanks to improved fleet operation efficiency and better use of resources. 24Q2's net operating cash flow is 3.48 billion yuan. Based on current market conditions and operating conditions, the company expects express delivery volume to be in the range of 34.73 billion to 35.64 billion units in 2024, an increase of 15% to 18% over the previous year.
Profit forecasting and investment advice. The company has the strongest scale effect and has a strong and balanced franchise network. As industry demand continues to exceed expectations, the company adheres to a high-quality management strategy, achieved high-quality profits, and maintained the company's net profit forecast for 2024/25/26 at 10.5, 12.1, and 14 billion yuan, maintaining a “buy” rating.
Risk warning: A sharp slowdown in express delivery volume; the risk of rising labor costs; the risk of cultivating new businesses.