Event: The company released its report for the third quarter of 2024. In terms of financial data, in Q1-Q3 of 2024, the company achieved cumulative operating income of 17.674 billion yuan, +24.19% year over year; realized net profit to mother 2.067 billion yuan, +24.14% year over year; net profit after deduction was 1.938 billion yuan, +26.78% year over year.

2024Q3 continues to benefit from the boom in cross-border e-commerce, and the company's integrated logistics revenue increased significantly year-on-year.

On the revenue side, in Q1-Q3 of 2024, the company achieved revenue of 17.674 billion yuan, air express transport/ground integrated service/integrated logistics solutions achieved revenue of 6.606 billion yuan/1.863 billion yuan/9.198 billion yuan respectively, +2.37%/+6.52%/+52.78% year-on-year respectively. In the first three quarters of 2024, the company's revenue in the integrated logistics solutions sector continued to show significant year-on-year growth, mainly benefiting from the catalytic boom in cross-border e-commerce since the beginning of the year. In terms of a single quarter, in Q1/Q2/Q3 of 2024, the company's quarterly revenue was 5.224 billion yuan/6.062 billion/ 6.388 billion yuan, respectively, +14.17%/+26.29%/+31.55% year-on-year.

Driven by high demand for cross-border e-commerce, the 2024Q3 company's single-quarter revenue reached a new high during the year. We anticipate that the company's revenue side is expected to continue to show positive performance under the catalyst of the 2024Q4 overseas cross-border e-commerce peak season.

2024Q3, the company's gross margin rebounded slightly during the year, and the financial expense ratio continued to show a year-on-year decline. On the cost side, in Q1-Q3 of 2024, the company achieved operating costs of 14.893 billion yuan, +24.18% year-on-year; among them, in a single quarter of Q1/Q2/Q3 in 2024, the company's operating costs were 4.618 billion yuan/5.009 billion yuan/5.267 billion yuan, respectively. In the first three quarters of 2024, the company's gross margin was 19.19%, -1.94 pct year on year, but there was a slight recovery in 2024.

On the cost side, in Q1-Q3 of 2024, the company's sales expenses (0.165 billion yuan), management expenses (0.219 billion yuan), R&D expenses (0.037 billion yuan), and financial expenses (0.15 billion yuan) cost ratios were 1.11%, 1.47%, 0.25%, and 1.0%, respectively, +0.06pct, -0.29pct, +0.1pct, and -1.19pct financial expense ratio levels continued to decline year-on-year, mainly in US dollars This is due to the narrowing of exchange rate fluctuations compared to the previous year, as well as a decrease in the size of the company's interest-bearing debt.

The 2024Q3 maintains the size of the entire B777 freighter fleet and continues to improve operational efficiency. As of the end of the third quarter of 2024, the company had 14 B777 freighters, and the size of the 2024Q3 fleet has not changed compared to the first half of the year. In 2024, the company achieved a continuous increase in the daily utilization rate and load rate of all freighters by optimizing the route network, encrypting the operating frequency of international long routes, and improving the utilization rate of crew resources.

The company plans to pay a mid-term cash dividend of 48.35% in 2024, focusing on the fulfillment of shareholder returns. Within 2024, the company plans to distribute a cash dividend of 3.89 yuan (tax included) to all shareholders for every 10 shares, for a total of 0.618 billion yuan (tax included), accounting for about 48.35% of net profit attributable to mother for the 2024 half year. The company achieved an interim cash dividend for the first time, and shareholder returns are attractive.

Investment advice: According to our profit forecast results, the company is expected to achieve basic earnings per share of 1.89/2.17/2.40 yuan in 2024/25/26, corresponding PE of 8.93X/7.77X/7.02X, maintaining the “recommended” rating.

Risk warning: Risk of global economic recovery falling short of expectations, risk of large fluctuations in air and sea freight prices, risk of cross-border logistics demand falling short of expectations, risk of fluctuations in crude oil prices and RMB exchange rates.