Zhongtong Express reveals 2024 mid-year report
Zhongtong Express disclosed its 2024 mid-year report. The company's revenue for the first half of the year was 20.69 billion yuan, up 10.5% year on year, net profit attributable to common shareholders was 4.04 billion yuan, down 4.1% year on year, and adjusted net profit attributable to common shareholders was 5.01 billion yuan, up 12.1% year on year. The company's revenue for the second quarter was 10.73 billion yuan, up 10.1% year on year, net profit attributable to common shareholders was 2.61 billion yuan, up 2.8% year on year, and adjusted net profit attributable to common shareholders was 2.78 billion yuan, up 9.2% year on year.
Focusing on product value, the unit volume growth rate slowed. The unit price was relatively stable. In the first half of the year, the unit volume growth rate slowed down in the first half of the year. In the first half of the year, the order volume was 15.62 billion units, up 11.8% year on year, of which it increased 10.1% in the second quarter. The express delivery business revenue in the first half of the year was 1.22 yuan, down 1.7% year on year.
The scale effect is compounded by efficiency improvements, unit cost reduction, and gross profit increase. With the scale effect brought about by the growth in business volume, the company's single ticket transportation cost declined steadily, reaching 6.7% year on year. Depreciation and amortization costs of single ticket sorting centers increased due to automated equipment upgrades. The first half of the year decreased 0.4% year on year, but increased 4.6% year on year in the second quarter.
The company's gross profit increased 13.6% year on year to 6.62 billion yuan in the first half of the year, and the gross profit margin increased 0.9 pct to 32.0% year on year.
Operating expenses have increased, financial expenses have improved, and impairment losses have increased in the first half of the year, the company's sales, general and administrative expenses increased 15.4% year on year to 1.49 billion yuan, and other operating income increased 19.3% year on year to 0.349 billion yuan. The company's operating profit increased 13.5% year-on-year to 5.48 billion yuan in the first half of the year, but due to the company's accruing impairment losses of Cainiao Logistics and Zhejiang Yizhan investment, the company's equity investment loss reached 0.673 billion yuan, resulting in a decrease of 3.2% to 4.1 billion yuan year-on-year. The double-digit increase in the company's adjusted profit was generally in line with expectations.
Investment advice
Under the intense market environment in the industry, the company kept the unit price basically stable in the first half of the year, and its performance improved steadily after the adjustment. The company's order volume guidelines for the whole year increased by 15-18% year on year, and business volume increased or accelerated in the second half of the year. We continue to be optimistic about Zhongtong's ability to flexibly switch between volume and price as the e-commerce express delivery leader, and we are optimistic that the company will continue to reduce costs and increase efficiency and performance improvement in the context of maintaining a high growth rate. The company's net profit to mother is expected to be 9.77 billion yuan, 11.06 billion yuan, and 12.35 billion yuan respectively in 2024-2026, up 11.7%, 13.2%, and 11.6% year-on-year, respectively. As of the closing price of August 23, 2024, the company expects the PE valuations corresponding to EPS in 2024-2026 to be 12.2X, 10.8X, and 9.7X, respectively. The State Post Office proposed that express delivery be retracted, or that it may further benefit leading companies to increase their value and maintain a “buy” rating.
Risk warning:
The macroeconomic economy declined, the express delivery industry's growth rate fell short of expectations, and the price war worsened.