Incidents:

In 2023, the company achieved operating income of 40.924 billion yuan, an increase of 21.54% over the previous year, and achieved net profit of 341 million yuan to mother, an increase of 18.41% over the previous year. Among them, in Q4 2023, the company achieved revenue of 11.587 billion yuan, a year-on-year increase of 20.78%, and achieved net profit of 120 million yuan to mother, an increase of 55.91% over the previous year.

In Q1 2024, the company achieved operating income of 10.132 billion yuan, an increase of 15.87% over the previous year, and realized net profit of 190 million yuan, an increase of 43.20% over the previous year.

The business volume increased 35.2% year on year in '23, and the market share increased by 1.55pct. The national express delivery business volume in 2023 was 132.07 billion units, a year-on-year growth rate of 19.4%. The company's business volume was 17.507 billion units, a year-on-year growth rate of 35.23%, 15.8 percentage points higher than the industry's growth rate.

The company's market share in 2023 was 13.26%, up 1.55 percentage points year over year. In terms of single ticket prices, industry prices were under pressure throughout 2023, and the average express delivery ticket price dropped 4.33% year on year. The company's single-ticket express delivery service revenue in '23 was 2.23 yuan, down 11.24% year on year.

The cost control effect was good. The cost of a single ticket decreased by 10.9% year on year. The company's operating cost in 2023 was 39.214 billion yuan, up 21.80% year on year, and the cost of single express delivery service was 2.15 yuan, down 10.94% year on year. Mainly, the company continued to invest in equipment automation upgrades and main line transportation efficiency, etc., and the scale effect of the decline in cost continued to be realized. In 2023, the company's gross margin was 4.18%, down 0.20pct year on year. Mainly due to price competition, gross margin was under relative pressure; net profit from a single ticket was 0.019 yuan, down 12.44% year on year.

The Q1 business volume increased 36.7% year on year in 2014, and the net profit of a single ticket rebounded year on year. In 2024, the company achieved a express delivery business volume of 4.587 billion units, an increase of 36.68% over the previous year, and a market share of 12.36%. Under the same caliber, the year-on-year increase was 1.03 percentage points. Q1 The company's single ticket revenue was 2.17 yuan, down 12.39% from Q1 2023 and up 0.20% from Q4 2023. The net profit from a single ticket in Q1 was 0.041 yuan, which was relatively the same as Q1 in 2023 (0.040 yuan), and an increase of 0.018 yuan over Q4 in 2023.

Profit Forecasts, Valuations, and Ratings

The company's revenue for 2024-2026 is estimated to be 481.92/559.40/63.923 billion yuan, respectively, with year-on-year growth rates of 17.76%/16.08%/14.27%; net profit to mother of 8.21/11.89/1,428 billion yuan, respectively, with year-on-year growth rates of 140.84%/44.92%/20.10%; EPS of 0.54/0.78/0.93 yuan respectively. In view of the company's business volume maintaining a high growth rate and the gradual release of scale effects, we gave the company 21 times PE in 2024, with a target price of 11.34 yuan, and raised the rating to a “buy” rating.

Risk warning: The growth rate of online consumption falls short of expectations; price competition in the express delivery industry exceeds expectations; and the cost control effect falls short of expectations.