Brief performance review
On August 21, 2024, Zhongtong Express announced its results for the second quarter of 2024.
2024Q2 achieved revenue of 10.73 billion yuan, up 10.1% year on year; net profit of 2.61 billion yuan, up 3.3% year on year. 2023Q3's business volume was 8.452 billion units, up 10.1% year on year, and its market share fell 2pct to 19.6%.
Management analysis
Single ticket revenue remained flat, and business volume increased year over year. 2024Q2's revenue increased 10.1% year on year, with the express delivery business revenue growth rate of 10.4%: (1) Price: Q2 The express delivery industry continued to compete fiercely. The company's express ticket revenue was 1.24 yuan, which was flat year on year. The main reason was that the unit price drop due to incremental subsidies and reduced package weight was offset by the positive impact of the increase in the proportion of high-value non-e-commerce items; (2) Volume: 2024Q2 mass consumer demand continued to be released, and the company's business volume reached 8.452 billion units, up 10.1% year on year, and the market share declined 2pct to 19.6%, mainly for the company to control the amount of lost parts in the whole link and maintain the sustainable and healthy development of the entire network.
The cost of a single ticket rose slightly, and gross margin declined. The cost of a single express ticket for 2024Q2 increased by 0.01 yuan to 0.82 yuan, an increase of 0.7% over the previous year. Among them, single ticket transportation costs decreased by 0.03 yuan to 0.39 yuan, mainly due to improvements in economies of scale, optimization of main line route planning, and increased loading rates; single ticket transit costs increased by 0.01 yuan to 0.26 yuan, mainly due to increased depreciation brought about by the commissioning of new equipment. Combined with the above effects, 2024Q2's gross margin fell 0.1 pct to 33.8% year on year, and net margin decreased 1.6 pct year on year to 24.4% year on year.
Maintaining the full-year volume forecast, an interim dividend will be paid. Based on current market conditions and operating conditions, management maintained the company's full-year package growth forecast for 2024 between 15% and 18%, corresponding to 34.73 billion to 35.64 billion units. The company's board of directors has approved an interim cash dividend for 2024H1. 2024H1 will pay a dividend of $0.35 per share, with a dividend ratio of 40%. The company has previously promised regular dividends in 2024, with a dividend payment rate of not less than 40%, to be paid every six months. This interim dividend payment is in line with previous promises.
Profit Forecasts, Valuations, and Ratings
Maintain the company's 2024-2026 net profit forecast of 10.5 billion yuan, 12.1 billion yuan, and 13.6 billion yuan. Maintain a “buy” rating.
Risk warning
There is a risk that e-commerce growth falls short of expectations, the risk of a sharp increase in artificial oil prices and costs, and the risk that the price war exceeds expectations.