中通快递-SW(02057.HK):聚焦服务质量提升 强调数量质量并举高质量发展

Zhongtong Express - SW (02057.HK): Focus on improving service quality, emphasize quantity and quality development

華創證券 ·  May 20

The company announced its results for the first quarter of 2024. (1) The first quarter of 2024 achieved operating income of 9.96 billion yuan, +10.9% year on year, gross profit of 3.02 billion yuan, up 19% year on year, net profit of 1,448 billion yuan, -13% year on year, adjusted net profit of 2,224 billion yuan, +15.8% year on year. (2) The number of packages in the first quarter of 2024 was 7.171 billion pieces, an increase of 13.9% over the previous year; as of the first quarter, the number of the company's pickup/delivery outlets was more than 31,000, and the number of its own mainline vehicles was 10,000, including 9100 high-capacity vehicles, a decrease of about 400 compared to the same period last year. The 3,800 main line transportation routes were similar to the same period last year, with 96 sorting centers.

Operating data: 24Q1 completed 7.171 billion units of business, up 13.9% year on year, Q1 company's market share 19.3%; cumulative year-on-year growth rate of Q1 business volume in 24 years: Shentong (36.7%) > Yunda (29.1%) > Yuantong (24.9%) > industry (25.5%) > Zhongtong (13.9%) > SF Express (3.1%); 24Q1 industry market share: Zhongtong (19.3%) > Yunda (13.32%) > Shentong (12.36%) Abundance (7.97%).

Single ticket revenue, cost, profit. (1) Single ticket revenue: 24Q1 single express delivery revenue was 1.36 yuan, a year-on-year decrease of 2.5% (or 0.04 yuan), and an increase of 0.17 yuan over 23Q4. The company adheres to the bottom line of “don't lose money”, and the decline in single ticket revenue is low in the industry. The decline in unit prices is mainly due to a decrease in the average weight of the company's products per ticket, the decline in the share of direct-managed KA customers in the business, and the combined effects of market competition. (2) Single ticket cost: 24Q1 express delivery cost was 0.94 yuan, down 5.3% (or 0.06 yuan) year on year, up 0.11 yuan from 23Q4, of which single ticket transportation cost was 0.47 yuan, down 7% (or 0.04 yuan) year on year; single ticket sorting cost was 0.3 yuan, down 5.4% (or 0.02 yuan) year on year, and the total core cost of a single ticket fell 0.06 yuan year on year. On the one hand, the company's core costs continued to drop significantly due to the release of scale effects brought about by the growth in business volume, and on the other hand, from the continuous implementation of refined operation management The effects of tools have been released, including improvements in operational efficiency brought about by vehicle route optimization, increased capacity vehicles, and increased automation equipment. (3) Single ticket net profit: Net profit per ticket was 0.2 yuan, down 0.06 yuan year on year, down 0.05 yuan from Q4, adjusted net profit of single ticket was 0.31 yuan, up 0.01 yuan year on year, and 0.06 yuan higher than Q4.

Investment advice: (1) Profit forecast: The company focuses on improving service quality and insisting on obtaining profitable business growth. At the beginning of '24, the company shifted its strategic focus to service quality. While maintaining a reasonable business scale and good profit level, it focused on creating differentiated products and services, in line with the inevitable trend of domestic express delivery moving from high quantity to quantity and quality. Through digital intelligence and refined management, we continue to promote the continuous reduction of core costs such as single ticket sorting and transportation costs, and achieve balanced development of “quality, quantity, and profit”. The company disclosed that it will maintain an estimated business volume of 347.3-35.64 billion units for the full year of 2024, an increase of 15%-18% over the previous year. The company expects the industry to grow at a rate between 15% and 20%. Based on the principle of not making loss-making express shipments, the company accepts that its share falls within a certain range. The company values shareholder returns. The 2023 annual report discloses a dividend payment rate of not less than 40% in 2024, and has adopted a semi-annual regular dividend policy starting in 2024. We maintain our profit forecast for 2024-26, and expect to achieve net profit attributable to mother of 109, 128, and 141 billion yuan, respectively, corresponding to PE 13, 11, and 10 times, respectively. (2) We have given an estimated net profit of 15 times PE for 2024, corresponding to a market value of 163.9 billion yuan (approximately HK$1805 billion), and a target price of HK$218, compared with the current price space of 17%. We continue to be optimistic about the development opportunities of leading e-commerce express delivery companies and maintain a “recommended” rating.

Risk warning: Fluctuations in the economic environment, intensification of price wars, etc.

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