Incident: The company released its 2024 three-quarter report. In Q1-Q3 of 2024, the company achieved cumulative operating income of 14.417 billion yuan, compared with the first three quarters of 2023, or 199.49% of the same period in 2019; realized net profit of 0.472 billion yuan, compared with -16.31% in the first three quarters of 2023, or 184.38% of the same period in 2019; realized net profit without deducted net income of 0.468 billion yuan, compared with 11.72% in the first three quarters of 2023, compared with the same period in 2019 182.81%

In 202403, a direct customer contract was signed to achieve a smooth price model. Revenue further benefited from freight rate flexibility, and single-quarter revenue reached a new high level during the year. On the revenue side, looking at Q1-Q3 2024, out of the 14.417 billion yuan revenue achieved by the company, Q1/02/03 revenue was 3.883 billion yuan/4.717 billion yuan 15.817 billion yuan, respectively, +31.67%/+30.61%/+51.54% year-on-year. As the company signed new contracts with customers to achieve smooth prices starting in 202402, the Q3 revenue side further benefited from freight rate flexibility, and single-quarter revenue hit a new high level during the year: 202403. The company continued to make efforts to control costs and improve efficiency. The gross margin for the first three quarters was 10.88%. On the cost side, on 2024/01/03, the company achieved operating costs of 13.826 billion yuan, +42.11% compared to 199.91% of the same period in 2019; among them, in the single quarter of 01/02/03 of 2024, the company's operating costs were 3.667 billion yuan/4.572 billion yuan/5.585 billion yuan, respectively. As of 202403, the company's gross margin was 10.88%. Compared with the 2024 interim report (11.76%) -0.88pct cost side, in 2024 Q1-03, the company's sales expenses (0.539 billion yuan), management expenses (0.371 billion yuan), R&D expenses (0.013 billion yuan), and financial expenses (0.046 billion yuan), the cost rates were 3.74%, 2.57%, 0.09%, and 0.32%, respectively, compared with the same period in 2023. -1.32pct, -1.08pct, -0.09pct+0.39pct The results of the company's fee control and efficiency have been further demonstrated.

The company continues to make efforts to deploy cross-border e-commerce logistics, and is expected to continue to usher in accelerated growth during the year. In 2024, along with the continuous advancement of China's local brands going overseas, the “Four Little Dragons Going Overseas” rose rapidly, and the prosperity of China's cross-border e-commerce industry remained high, and the company made further efforts to lay out the cross-border e-commerce business sector. Among them, since the beginning of 2024, the company has actively expanded the Japanese parcel business to maintain steady growth in cargo volume; developed charter services in Chengdu, Liège and Budapest, overseas customs clearance and delivery services in Central Asia; increased the construction of domestic and foreign storage resources, completed the launch of the US overseas warehouse system, and expanded the Dutch overseas warehouse capacity. We maintain our previous expectations, and the company's cross-border e-commerce business is expected to continue to usher in a wave of accelerated growth during the year. The company has paid out the mid-2024 cash dividend, with a dividend rate of 50.11%. According to the company announcement on October 21, 2024 (dividend payment date), the company will distribute cash dividends of 1.16 yuan (tax included) to all shareholders for every 10 shares based on the total share capital of 1.309 billion shares on June 30, 2024. The total cash dividend amount is 0.152 billion yuan (tax included), and the dividend ratio is 50.11%. The company will continue to maintain a high level of shareholder returns in 2024.

Investment recommendation: According to the profit forecast results, the company is expected to achieve basic earnings per share of 0.52/0.58/0.65 yuan in 2024/25/26, corresponding PE of 11.46X/10.26X/9.22X, maintaining the “recommended” rating.

Risk warning: the risk of large fluctuations in air and sea freight prices; the risk of cross-border logistics demand falling short of expectations; risks arising from changes in the international trade situation under geographical conflicts.