Financial Data and Key Metrics Changes - In 2024, the company handled 24.6 billion parcels, a year-on-year increase of 31% [7] - Revenue reached $10.3 billion, marking a year-on-year increase of 16% [7] - Adjusted EBIT was $301 million, a significant turnaround from a loss of $335 million in the previous year [7] - Net profit was $114 million, representing the first full year of profitability in the company's history [7][28] - Total revenue increased by 15.9% year-on-year from $8.8 billion in 2023 to $10.3 billion in 2024 [19] - Adjusted net profit reached $200 million in 2024, a turnaround from an adjusted net loss of $432 million in 2023 [28] Business Line Data and Key Metrics Changes - In China, the company handled 19.8 billion parcels, a year-on-year increase of 29%, with adjusted EBIT reaching $147 million [8][25] - In Southeast Asia, parcel volume increased by 41% to 4.6 billion parcels, with revenue rising by 22.3% to $3.2 billion [12][21] - New markets saw a 22% increase in parcel volume, handling 281 million parcels, with revenue growing by 76.1% to $576 million [15][25] - The cross-border business revenue decreased by 88.7% to $75 million due to a strategic shift to focus on B2B [27] Market Data and Key Metrics Changes - The company's market share in China increased to 11.3%, while in Southeast Asia, it reached 28.6%, marking a 3.2 percentage point increase from 2023 [8][12] - The cumulative parcel volume of China's express delivery industry grew by 21.5% in 2024, indicating a robust market environment [10] Company Strategy and Development Direction - The company aims to solidify its market position in Southeast Asia and China while expanding into new markets [16] - Strategies include reducing costs through refined management, leveraging expertise from China, and enhancing service quality [16] - The company plans to capture changes in business flow due to e-commerce globalization and strengthen its brand [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the express delivery industry but expressed confidence in long-term growth and profitability [17] - The company is committed to continuous self-improvement and maintaining a competitive edge in a challenging market [17] - Management expects to achieve full-year EBITDA breakeven for new markets in 2025 [55] Other Important Information - The company reported a significant improvement in cash flow, with a net cash inflow from operating activities of $807 million in 2024 [28] - Free cash flow turned positive for the first time, reaching $252 million [29] Q&A Session Summary Question: Performance of TikTok Shop in Mexico and expectations for parcel volume growth - Management indicated that TikTok Shop began operations in Mexico in February 2025, and the performance is still in early stages [32] - The company expects meaningful contributions to parcel volume growth in new markets as operations develop [32] Question: Expectations for domestic parcel volume growth and competition in 2025 - The company reported a 29% year-on-year increase in parcel volume in China, with expectations to maintain growth despite competition [33] Question: Specific measures for cost reduction in China and future expectations - Management highlighted improvements in operational efficiency and cost optimization measures, with expectations for further reductions [36] Question: Competitive trends in the return parcel market - Management noted that return services have higher profitability than normal delivery services, and competition is expected to increase [38] Question: Business strategy in Southeast Asia and price trends - The company aims to increase market share and expects unit prices to decrease by 5% to 10% annually over the next few years [44] Question: Cash flow position and pressures from debt repayment - The company maintains a strong cash position with sufficient cash equivalents to cover interest-bearing debt, with no near-term repayment pressures [47] Question: Updates on new markets and potential opportunities - Management is optimistic about achieving breakeven in new markets by 2025 and is exploring opportunities in Latin America and the Middle East [55] Question: Year-on-year volume growth in Southeast Asia and major volume drivers - The company expects a parcel volume growth of 20% to 30% in Southeast Asia for 2025, with strong growth observed in the first two months [59] Question: CapEx adjustments in Southeast Asia - The company plans to continue investing in Southeast Asia to solidify its market leadership and capture growth opportunities [63]

Financial Performance - For the fiscal year ending December 31, 2024, the company reported total revenue of $10,259.1 million, a 15.9% increase from $8,849.3 million in 2023[5]. - The gross profit for the same period was $1,078.2 million, representing a significant increase of 128.0% compared to $472.8 million in the previous year[5]. - The adjusted EBITDA reached $778.3 million, up 430.5% from $146.7 million in 2023[5]. - The adjusted net profit for the year was $113.7 million, a significant recovery from a loss of $1,156.4 million in the previous year[5]. - The company reported a net profit attributable to shareholders of $100.6 million for 2024, a recovery from a net loss of $1,100.99 million in 2023[185]. - Basic earnings per share for 2024 were $1.2, compared to a loss of $26.3 per share in 2023, reflecting a positive turnaround in profitability[185]. Revenue Growth - The Southeast Asia segment generated revenue of $3,220.9 million in 2024, up from $2,633.4 million in 2023, indicating strong growth in this region[104]. - The China segment's revenue increased from $5,229.3 million in 2023 to $6,388.1 million in 2024, showcasing robust performance in the Chinese market[104]. - New market revenue grew by 76.1% from $326.8 million in 2023 to $575.6 million in 2024, with parcel volume increasing by 22.1%[118]. - Express service revenue grew by 23.4% from $8,086.8 million in 2023 to $9,980.3 million in 2024, primarily due to increased service revenue from the growth in express business[111]. Package Volume and Market Share - The company processed a total of 24.65 billion packages in 2024, a 31.0% increase from 18.81 billion packages in 2023[10]. - The total package volume in Southeast Asia reached 4.5632 billion in 2024, compared to 3.2400 billion in 2023, marking a year-on-year growth of 40.8%[38]. - In China, the company processed 19.8012 billion packages in 2024, a 29.1% increase from 15.3414 billion packages in 2023[34]. - The company's market share in Southeast Asia increased to 28.6% in 2024 from 25.4% in 2023[10]. - The company's market share in China increased to 11.3% in 2024, up from 10.6% in 2023, reflecting a 0.7 percentage point gain[47]. Cost Management and Efficiency - The average cost per package in Southeast Asia decreased from $0.67 in 2023 to $0.57 in 2024, demonstrating effective cost management strategies[44]. - The single ticket cost has decreased from $0.34 in 2023 to $0.30 in 2024, reflecting ongoing operational optimization[54]. - The overall single-piece cost in China decreased from $0.34 in 2023 to $0.30 in 2024, due to ongoing operational optimization[124]. - The company achieved a gross profit margin improvement from 5.3% in 2023 to 10.5% in 2024, with total gross profit rising from $472.8 million to $1,078.2 million[138]. Operational Improvements - The average delivery time for packages in Southeast Asia decreased by 10.5% in 2024 compared to 2023, reflecting improved operational efficiency[42]. - The company processed over 24.0 million packages in a single day during the 2024 Double Twelve shopping festival, showcasing its strong logistics network and capacity flexibility[42]. - The company aims to enhance service quality and customer satisfaction by reducing average delivery times and increasing the proportion of same-day and next-day deliveries[52]. - The company has established an intelligent route planning and resource management system, optimizing transportation routes to reduce costs and improve efficiency[81]. Market Expansion and Strategy - The company plans to continue expanding its market presence in new regions, including Saudi Arabia, UAE, Mexico, Brazil, and Egypt[8]. - The company is actively expanding its non-e-commerce customer base, including social media businesses and enterprises, which are expected to contribute higher pricing and profitability[101]. - The company is focusing on building strong partnerships with global e-commerce platforms to capitalize on the growth of cross-border e-commerce logistics[98]. - The company aims to enhance its network coverage and capacity by investing in transit center facilities and increasing the number of vehicles to meet rising market demands[95]. Technology and Innovation - The company is investing heavily in automation equipment and AI route planning technology to reduce operational costs and improve efficiency in the collection and delivery process[77]. - The "Hello Boss" application has achieved over 90% coverage in China, with plans to expand into Southeast Asia, significantly enhancing end-point digitalization and operational efficiency[76]. - The company has developed a proprietary address digitization platform, significantly improving address analysis accuracy and reducing misdelivery rates, particularly in Southeast Asia[83]. - The company is exploring the application of cutting-edge technologies such as unmanned vehicles and drones in the collection and delivery process[77]. Financial Position and Liabilities - Total liabilities increased to $4,771,958 thousand in 2024 from $4,121,815 thousand in 2023, indicating a rise in financial obligations[169]. - The group's debt-to-asset ratio as of December 31, 2024, is 65.4%, up from 62.4% in 2023[155]. - Cash generated from operating activities in 2024 is $807.4 million, compared to $342.0 million in 2023, indicating improved cash flow management[154]. - As of December 31, 2024, the group's cash and cash equivalents total $1,596.9 million, with total borrowings under current liabilities amounting to $262.6 million[154].

Company Repurchase Activity - The company has conducted share repurchases for 4 consecutive days since December 27, 2024, totaling 3.93 million shares with a cumulative repurchase amount of HKD 23.82 million [1] - On January 2, the company repurchased 1.03 million shares at a price range of HKD 5.91 to HKD 6.01 per share, amounting to HKD 6.13 million [2] Stock Performance - The stock closed at HKD 5.86 on the day of the latest repurchase, representing a 4.40% decline [1] - The stock's trading volume for the day reached HKD 68.40 million [1] - During the repurchase period, the stock experienced a cumulative decline of 6.24% [3]

Investment Rating - The report gives J&T Express-W (1519 HK) a "Buy" rating, with an initial coverage [5][58] Core Views - J&T Express is a global logistics company with a strong presence in 13 countries, ranking as the 6th largest express service provider in China and showing robust growth in new markets [2][3] - The company's agent-based model, inherited from the "BBK" system, ensures strong policy execution and network stability, facilitating rapid international expansion [2][3] - J&T's profitability has turned positive in 2024, with significant improvements in cash flow and gross profit, indicating self-sustaining growth [3][8] - The company's global network layout and growth potential are highly promising, with a focus on profitability in China, market leadership in Southeast Asia, and strong growth momentum in new markets [5][58] Market Performance China Market - J&T entered the Chinese market late but quickly gained traction with competitive pricing and an efficient agent model, achieving a daily parcel volume of over 48 million and a market share of 11% in H1 2024 [3][24] - The company shifted its strategy from scale-first to profit-first, leading to positive EBITDA in China in 2023, driven by cost optimization and capacity expansion [3][24] - J&T's asset-light approach, combining heavy investments in transportation and automation with leased land and buildings, has helped reduce costs significantly [24][34] Southeast Asia Market - J&T has maintained its leading position in Southeast Asia for four consecutive years, with a 27.4% market share in H1 2024 and a 42% YoY increase in parcel volume [4][42] - The company leverages its unique agent model and competitive pricing to consolidate its market position, with further growth expected as e-commerce platforms like TikTok Shop and Temu expand in the region [4][42] - J&T's cost structure in Southeast Asia continues to improve, with significant reductions in per-parcel costs, driving profitability [42][48] New Markets - J&T has expanded into new markets such as the Middle East and Latin America, achieving a 63.9% YoY increase in parcel volume in H1 2024 and a market share of 6.1% [4][52] - The company has significantly reduced losses in new markets, with EBITDA improving to -$7.8 million in H1 2024, driven by higher-quality non-e-commerce clients and improved operational efficiency [52][56] Financial Projections - The report forecasts J&T's net profit for 2024-2026 to be $150 million, $390 million, and $500 million, respectively, with PE ratios of 41.4X, 16.4X, and 12.7X [5][58] - Revenue is expected to grow at a CAGR of 15% from 2024 to 2026, driven by strong performance in China, Southeast Asia, and new markets [58][59]

Revenue and Profit Growth - Revenue for the first half of 2024 reached $4.86 billion, a 20.6% increase compared to $4.03 billion in the same period of 2023[9] - Express service revenue grew by 33.7% to $4.74 billion in H1 2024, up from $3.55 billion in H1 2023[9] - Gross profit surged by 176.8% to $535.7 million in H1 2024, compared to $193.5 million in H1 2023[9] - Adjusted EBITDA increased by 795.6% to $350.8 million in H1 2024, up from $39.2 million in H1 2023[9] - Operating profit turned positive at $115.0 million in H1 2024, compared to a loss of $1.64 billion in H1 2023[9] - Net cash from operating activities increased significantly to $345.6 million in H1 2024, up from $2.8 million in H1 2023[9] - Revenue increased to $4,861.7 million in H1 2024 from $4,030.4 million in H1 2023, with gross profit rising to $535.7 million from $193.5 million[36] - Operating profit improved to $115.0 million in H1 2024 from a loss of $1,636.2 million in H1 2023, reflecting significant operational improvements[36] - Adjusted EBITDA surged to $350.8 million in H1 2024 from $39.2 million in H1 2023, indicating strong financial recovery[36] - Total revenue increased by 20.6% from $4,030.4 million in the first half of 2023 to $4,861.7 million in the first half of 2024, primarily driven by growth in express delivery services across 13 countries[39] - Express delivery service revenue grew by 33.7% from $3,546.2 million in the first half of 2023 to $4,740.0 million in the first half of 2024, with parcel volume increasing by 38.3% from 7.97 billion to 11.01 billion pieces[40] - Revenue for the first half of 2024 increased to $4,861.7 million, up 20.6% compared to $4,030.4 million in the same period of 2023[108] - Gross profit surged to $535.7 million in H1 2024, a significant increase from $193.5 million in H1 2023[108] - Operating profit improved to $115.0 million in H1 2024, compared to an operating loss of $1,636.2 million in H1 2023[108] - Net profit for H1 2024 was $31.0 million, a turnaround from a net loss of $666.8 million in H1 2023[108] - Basic earnings per share for H1 2024 were $0.003, compared to a loss per share of $0.208 in H1 2023[108] - The company's comprehensive loss for H1 2024 was $40.6 million, an improvement from $676.6 million in H1 2023[109] - The company's profit attributable to owners for the six months ended June 30, 2024, was $27.589 million, a significant improvement from a loss of $1.670 billion in the same period in 2023[155] Parcel Volume and Market Share - The company handled 11.01 billion parcels in H1 2024, a 38.3% increase from 7.97 billion parcels in H1 2023[13] - Southeast Asia parcel volume grew by 42.0% to 2.04 billion parcels in H1 2024, with a market share of 27.4%[12][14] - China parcel volume increased by 37.1% to 8.84 billion parcels in H1 2024, capturing an 11.0% market share[12][14] - New markets parcel volume surged by 63.9% to 136.3 million parcels in H1 2024, with a 6.1% market share[12][14] - Company's market share in Southeast Asia increased to 27.4% in H1 2024, up 2.0 percentage points from 25.4% in 2023[15] - Company's market share in China rose to 11.0% in H1 2024, up 1.1 percentage points from 9.9% in H1 2023[15] - Company's market share in new markets reached 6.1% in H1 2024, up 0.1 percentage points from 6.0% in 2023[15] - Southeast Asia's total parcel volume is projected to reach 14.93 billion in 2024, up 17.1% from 2023[16] - Company processed 2.04 billion parcels in Southeast Asia in H1 2024, a 42.0% increase from 1.44 billion in H1 2023[20] - Southeast Asia's daily parcel volume reached 11.2 million in H1 2024, a 42.0% YoY increase[23] - China's e-commerce retail sales grew 8.8% YoY to RMB 6.0 trillion in H1 2024, with express delivery volume increasing 23.1% YoY to 80.16 billion parcels[25] - The company's market share in China increased to 11.0% in H1 2024, up 1.1 percentage points YoY, ranking 6th among express operators[26] - China's parcel volume grew 37.1% YoY to 8.84 billion in H1 2024, outperforming the industry growth rate[27] - The company's parcel volume in new markets grew 63.9% YoY to 136.3 million in H1 2024, with market share increasing from 6.0% to 6.1%[33] Operational Efficiency and Cost Management - Company's single-ticket cost in Southeast Asia decreased by 15.5% year-over-year in H1 2024[21] - Southeast Asia's average delivery time decreased by 13.8% YoY in H1 2024, with loss and damage rates also declining[22] - China's single-ticket cost decreased from $0.34 in H1 2023 to $0.32 in H1 2024[28] - Single-ticket express revenue remained stable at $0.34 in H1 2024, unchanged from H1 2023, driven by optimized e-commerce platform parcel structure and improved product categories[30] - Single-ticket express cost decreased from $0.34 in H1 2023 to $0.32 in H1 2024, a significant reduction due to scale effects and refined operational management[30] - Southeast Asia's per-parcel cost decreased from $0.71 in H1 2023 to $0.60 in H1 2024, driven by a 42.0% YoY increase in parcel volume and operational optimization leveraging China's experience[48] - The number of Southeast Asia outlets reached 10,600 as of June 30, 2024, with 2,000 network partners, and per-parcel pickup and delivery costs decreased from $0.40 to $0.37[48] - Southeast Asia's transportation fleet grew to 3,800 vehicles (1,500 self-owned) as of June 30, 2024, with per-parcel transportation costs decreasing from $0.19 to $0.16[48] - Southeast Asia's sorting centers decreased to 119 as of June 30, 2024, with 47 automated sorting systems, and per-parcel sorting costs decreased from $0.09 to $0.06[49] - China's per-parcel revenue remained stable at $0.34 in H1 2024, while per-parcel costs decreased from $0.34 to $0.32 through operational optimization[50][51] - China's transportation fleet exceeded 5,900 vehicles (4,200 self-owned) as of June 30, 2024, with per-parcel transportation costs decreasing from $0.08 to $0.07[52] - China's sorting centers totaled 83 as of June 30, 2024, with 6 new automated sorting lines added in H1 2024, reducing per-parcel sorting costs from $0.06 to $0.05[52] - New markets' per-parcel revenue increased from $1.60 in H1 2023 to $2.14 in H1 2024, while per-parcel costs remained flat at $1.88[53][54] - Total operating costs and expenses decreased by 15.9% from $5,623.6 million in the first half of 2023 to $4,731.2 million in the first half of 2024, primarily due to a significant reduction in share-based payments and expenses from $1,426.9 million to $32.2 million[56] - Fulfillment costs increased by 29.9% from $1,790.8 million in the first half of 2023 to $2,326.5 million in the first half of 2024, driven by network expansion and increased parcel volume[57] - Employee costs rose by 23.3% from $540.0 million in the first half of 2023 to $665.7 million in the first half of 2024, mainly due to increased headcount and higher average wages[57] - Other labor costs increased by 39.1% from $213.3 million in the first half of 2023 to $296.7 million in the first half of 2024, reflecting higher parcel volume[58] - Southeast Asia's costs grew by 20.2% from $1,026.0 million in the first half of 2023 to $1,232.7 million in the first half of 2024, driven by a 42.0% increase in parcel volume[59] - China's costs increased by 25.4% from $2,220.2 million in the first half of 2023 to $2,784.4 million in the first half of 2024, with parcel volume rising by 37.1%[60] - New markets' costs surged by 64.2% from $156.2 million in the first half of 2023 to $256.6 million in the first half of 2024, supported by a 63.9% increase in parcel volume[60] - Gross margin improved from 4.8% in the first half of 2023 to 11.0% in the first half of 2024, with significant improvements in China and new markets[61] - Sales, general, and administrative expenses decreased by 78.4% from $1,767.9 million in the first half of 2023 to $381.7 million in the first half of 2024, largely due to reduced share-based payments[64] - Southeast Asia: Adjusted EBITDA increased by 12.9% from $184.1 million in the first half of 2023 to $207.8 million in the first half of 2024, with adjusted EBITDA margins of 14.8% and 13.7% respectively[66] - China: Adjusted EBITDA turned from a loss of $45.0 million in the first half of 2023 to a profit of $198.9 million in the first half of 2024, with adjusted EBITDA margins improving from -2.0% to 6.6%[66] - Cross-border: Adjusted EBITDA loss narrowed from $11.3 million in the first half of 2023 to $7.2 million in the first half of 2024[67] - New markets: Adjusted EBITDA loss significantly improved from $55.2 million in the first half of 2023 to $7.8 million in the first half of 2024, with the adjusted EBITDA margin improving from -41.6% to -2.7%[67] - Financial costs: Total financial costs remained stable at $45.0 million in the first half of 2024 compared to $44.6 million in the first half of 2023, primarily due to interest expenses on borrowings[68] - Other income: Total other income decreased to $3.1 million in the first half of 2024 from $12.2 million in the first half of 2023, mainly due to changes in subsidy policies[69] - Cash flow: Operating cash flow significantly increased to $345.6 million in the first half of 2024 from $2.8 million in the first half of 2023, with cash and cash equivalents totaling $1,428.2 million as of June 30, 2024[71] - Capital expenditure: Total capital expenditure decreased to $165.2 million in the first half of 2024 from $250.6 million in the first half of 2023[73] - Capital commitments: Total capital commitments decreased to $111.8 million as of June 30, 2024, from $134.9 million as of December 31, 2023[74] - The company has 152,145 full-time employees as of June 30, 2024, with competitive compensation packages based on qualifications, expertise, and experience[76] - The company invested approximately $457.0 million in Huisen Global Limited's convertible bonds in 2022, with an additional $58.0 million investment in May 2023[76] - As of June 30, 2024, the fair value of the convertible bonds held in Huisen Global Limited is approximately $484.9 million, representing 7.3% of the company's total assets[76] - The company recognized a fair value change income of approximately $1.4 million from the Huisen Global Limited investment in the first half of 2024[76] - The company has pledged restricted deposits of $31.2 million as collateral as of June 30, 2024[77] - Huisen Global Limited, in which the company holds significant investment, is focusing on expanding overseas markets while maintaining a stable presence in China[78] - As of June 30, 2024, the company has no significant investment or capital asset plans[78] - The company has no significant contingent liabilities as of June 30, 2024[79] - Li Jie holds approximately 11.11% of the company's issued shares through controlled entities[81] - Tencent Holdings Limited holds approximately 6.81% of the company's issued shares through controlled entities[84] - Li Jie holds 979,333,410 Class A shares, representing approximately 55.56% of the total voting rights for non-reserved matters[90] - Tencent holds a total of 533,278,240 Class B shares through its subsidiaries[86] - Boyu Capital Fund IV, L.P. and related entities hold a total of 460,820,640 Class B shares[87] - The 2024 Share Incentive Plan has an authorized limit of 881,216,623 shares available for grant[89] - The company has a dual-class share structure with Class A shares having 10 votes per share and Class B shares having 1 vote per share[90] - Conversion of all Class A shares to Class B shares would result in 979,333,410 Class B shares, representing approximately 12.50% of total Class B shares[91] - The Pre-IPO Share Incentive Plan involved the issuance of 38,000,000 Class A shares to NP Investment Platform Limited[88] - Guangdong Oujia Holdings Co., Ltd. holds approximately 65.9% of Team Spirit Group Limited, which owns 373,175,910 Class B shares[85] - The company's global offering raised a net amount of HKD 3,553.50 million, with 30% (HKD 1,066.05 million) allocated to expanding logistics networks, 30% (HKD 1,066.05 million) for entering new markets, 30% (HKD 1,066.05 million) for R&D and technological innovation, and 10% (HKD 355.35 million) for general corporate purposes and working capital[96] - As of June 30, 2024, the company had utilized USD 286.5 million of the net proceeds, with USD 58.0 million spent on logistics network expansion, USD 83.0 million on service expansion, USD 129.0 million on R&D and technological innovation, and USD 16.5 million on general corporate purposes[97] - The company plans to fully utilize the remaining net proceeds by the end of 2027[97] - The company has appointed Shang Quanxi and Zheng Chengjie as joint company secretaries, with an exemption granted by the Stock Exchange for Shang Quanxi's qualification, valid for three years from her appointment date[94] - The company's board of directors has deviated from the Corporate Governance Code by having Mr. Li Jie serve as both Chairman and CEO, citing his extensive experience and the need for consistent leadership[93] - The company has established an audit committee, corporate governance committee, nomination committee, and remuneration committee to oversee governance and financial matters[101] - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period and holds no treasury shares as of June 30, 2024[98] - The company has confirmed that all directors complied with the standard code for securities transactions during the reporting period, with no violations detected[95] - The company secured a financing agreement with a total facility of up to $674.0 million in USD, HKD 1,362.0 million, and RMB 2,871.4 million[103] - The financing agreement has a term of 36 months from the date of the first drawdown[103] - The company did not declare an interim dividend for the period ending June 30, 2024[103] - The company's financial costs increased to $62.2 million in H1 2024, up from $56.0 million in H1 2023[108] - Total assets increased to $6,653,998 thousand as of June 30, 2024, compared to $6,601,414 thousand at the end of 2023[110] - Non-current assets decreased to $3,277,133 thousand from $3,464,108 thousand, primarily due to a reduction in intangible assets and investment properties[110] - Current assets rose to $3,376,865 thousand, up from $3,137,306 thousand, driven by an increase in cash and cash equivalents and prepayments[110] - Total liabilities increased to $4

Investment Rating - The report maintains a "Buy" rating for the company, with a market price of HKD 6.07 and an industry rating of "Outperform" [1][3]. Core Insights - The company achieved its first profitable quarter in domestic operations, with a significant increase in market share in Southeast Asia. The revenue for the first half of 2024 reached USD 4.86 billion, a year-on-year growth of 20.6%, and the net profit was USD 30 million, marking a turnaround from losses [3]. - The company’s express delivery volume grew nearly 40% in the first half of 2024, with a total of 11.01 billion packages delivered, reflecting a year-on-year increase of 38.3% [3]. - The company’s market share in Southeast Asia increased to 27.4%, up from 25.4% in 2023, while its market share in China rose to 11.0% from 9.9% [3]. - The report highlights the scale effects of logistics infrastructure, with a decrease in per-package costs in the Chinese market, contributing to improved profitability [3]. Summary by Sections Financial Performance - For the first half of 2024, the company reported revenues of USD 4.86 billion, with segment revenues of USD 3.00 billion from China, USD 1.52 billion from Southeast Asia, and USD 290 million from emerging markets, showing growth rates of 36.1%, 22.0%, and 119.6% respectively [3][4]. - The adjusted EBITDA for 2024 is projected to be RMB 2.898 billion, with net profit expected to reach RMB 560 million, a significant turnaround from a loss of RMB 7.845 billion in 2023 [4][5]. Market Position - The company’s market share in Southeast Asia has shown a notable increase, indicating a strong competitive position and potential for further growth in the region [3][4]. - The report emphasizes the company's ability to leverage domestic operational expertise to enhance its performance in Southeast Asia [3]. Valuation - The report adjusts profit forecasts, projecting net profits of RMB 5.60 billion, RMB 22.48 billion, and RMB 33.40 billion for 2024, 2025, and 2026 respectively, with corresponding EPS of RMB 0.06, RMB 0.25, and RMB 0.38 [3][4].

Investment Rating - The report maintains an "Accumulate" rating for Jitu Express-W (01519) [1] Core Views - Jitu Express has achieved profitability in the China region, continuing its growth trajectory with a significant increase in business volume [1][4] - The company reported a total business volume of 11.01 billion parcels in H1 2024, representing a year-on-year growth of 38.3% [2][4] - The revenue for H1 2024 reached $4.862 billion, up 20.62% year-on-year, with a gross profit of $536 million, reflecting a substantial increase of 176.81% [3][4] Summary by Sections Business Performance - In H1 2024, Jitu Express achieved a business volume of 11.01 billion parcels, with Southeast Asia, China, and new markets contributing 2.043 billion, 8.836 billion, and 136 million parcels respectively, showing year-on-year growth rates of 42.0%, 37.1%, and 63.9% [2][4] - The company’s Q2 2024 business volume was 5.983 billion parcels, a 30.7% increase year-on-year [2][4] Revenue and Profitability - The company’s revenue for H1 2024 was $4.862 billion, a 20.62% increase from the previous year, with a net profit of $28 million, marking a turnaround from losses [3][4] - The average revenue per parcel varied across markets, with Southeast Asia at $0.74, China at $0.34, and new markets at $2.14, reflecting changes of -14.12%, -0.72%, and +34.07% respectively [3][4] Cost Management - Jitu Express has implemented refined management strategies that have significantly reduced per-parcel costs in Southeast Asia and China, leading to improved gross margins [6][7] - In Southeast Asia, the per-parcel cost decreased to $0.60, down 15.41% year-on-year, while in China, it fell to $0.32, an 8.51% reduction [6][7] Market Outlook - The growth in e-commerce continues to provide opportunities for Jitu Express, with expectations for sustained business volume growth and improved profitability driven by economies of scale [7][8] - The company is projected to achieve revenues of $10.137 billion, $12.022 billion, and $14.004 billion for 2024, 2025, and 2026 respectively, with corresponding net profits of $185 million, $390 million, and $476 million [8][9]

Investment Rating - The investment rating for J&T Express has been upgraded from Hold to Buy [1][2]. Core Insights - J&T Express achieved a net profit of $31 million in the first half of 2024, a significant improvement compared to losses of $264 million and $168 million in the first and second halves of 2023, respectively [1]. - The company is on a clearer path to sustainable profitability due to ongoing cost-cutting trends in Southeast Asia and China [1]. - Revenue for the first half of 2024 grew by 22% year-on-year to $1.52 billion, driven by a 42% increase in parcel volume, although this was offset by a 14% decline in average selling price (ASP) [1][6]. - The target price has been adjusted to HK$10 from HK$12.80, reflecting a more conservative valuation approach post-industry correction [1][10]. Southeast Asia Performance - In the first half of 2024, revenue in Southeast Asia increased by 22% to $1.52 billion, with parcel volume rising by 42% to 2 billion units [1]. - The average selling price (ASP) decreased by 14% to $0.74, while market share increased by 2 percentage points to 27.4% [1][6]. - The unit gross margin only declined by 8% year-on-year to $0.14 due to a 16% reduction in annual unit costs [1]. China Performance - Revenue in China grew by 36% year-on-year to $3 billion in the first half of 2024, supported by a 37% increase in parcel volume to 8.8 billion units [1]. - The ASP remained stable at $0.34, with market share expanding by 1.1 percentage points to 11% [1][6]. - The unit cost decreased by 6% year-on-year, resulting in a gross profit of $0.02 per parcel [1]. New Markets - Revenue in new markets surged by 120% year-on-year to $292 million in the first half of 2024, driven by a 64% increase in parcel volume [1]. - However, growth is expected to moderate in the second half of 2024 due to new tariffs affecting cross-border e-commerce in Brazil [1]. Financial Projections - Revenue projections for FY24E and FY25E have been revised upwards by 12% and 7%, respectively [1][2]. - Adjusted net profit is expected to reach $186.5 million in FY24E and $495.6 million in FY25E [2]. - The company is projected to achieve a P/E ratio of 39.7x in FY24E, decreasing to 15.2x in FY25E [2]. Valuation Methodology - The target price is based on a sum-of-the-parts (SOTP) valuation approach, applying different EV/EBITDA multiples for various markets [10][11]. - Southeast Asia is assigned a target P/E of 15x, reflecting a premium due to competitive advantages and market share growth [10]. - The valuation for China has shifted to an EV/EBITDA approach, applying a target multiple of 10x, which is approximately 50% higher than local peers [10].

Investment Rating - The report upgrades the investment rating for J&T Express to BUY from Hold [2]. Core Insights - J&T Express achieved a net profit of US$31 million in 1H24, a significant improvement from a loss of US$264 million in 1H23 and US$168 million in 2H23, indicating a clearer path to sustainable profitability [2]. - The revenue in 1H24 grew by 22% year-on-year to US$1.52 billion, driven by a 42% increase in parcel volume, although this was offset by a 14% decline in average selling price (ASP) [2]. - The company is expected to see full-year volume growth of 30% year-on-year, despite a projected double-digit decrease in ASP [2]. - In China, revenue grew by 36% year-on-year to US$3 billion, supported by a 37% increase in parcel volume and stable ASP [2]. - The report anticipates a slowdown in revenue growth in new markets due to regulatory changes affecting cross-border e-commerce in Brazil [2]. Summary by Sections Financial Performance - J&T Express reported a revenue of US$4.86 billion in 1H24, a 20.6% increase from US$4.03 billion in 1H23 [7]. - The gross profit surged to US$536 million, reflecting a 176.8% increase year-on-year [7]. - The adjusted net profit is forecasted to be US$186.5 million for FY24, a significant recovery from a loss of US$432.3 million in FY23 [4]. Market Analysis - In Southeast Asia, the market share expanded by 2 percentage points year-on-year to 27.4%, with a unit gross margin of US$0.14 [2]. - In China, the market share increased by 1.1 percentage points year-on-year to 11%, with a unit gross profit of US$0.02 [2]. - The report highlights a strong competitive edge for J&T in Southeast Asia, with a target multiple of 15x for valuation, reflecting a premium over global integrated logistics operators [10]. Valuation - The target price is revised down to HK$10 from HK$12.8, reflecting a more conservative approach following sector pullbacks [2][10]. - The valuation methodology for the China segment has shifted to EV/EBITDA, applying a target multiple of 10x, which is approximately a 50% premium to local peers [10]. - The total equity value is estimated at US$11.1 billion, with a target price of HK$10.00 [11].

Summary of Conference Call Transcript Company and Industry - The document discusses the express delivery industry in China, specifically highlighting a company's performance in the first half of 2024. Core Points and Arguments - The company achieved a significant breakthrough in its express delivery business, with a year-on-year volume growth of 37.1% [1] - The market share increased by 1.1 percentage points compared to the previous year [1] - Adjusted EBITDA turned positive, indicating a successful turnaround in profitability [1] - The dual achievement of increased market share and profitability demonstrates the feasibility and effectiveness of the company's strategy in China [1] Other Important but Possibly Overlooked Content - The document emphasizes the rapid growth and competitive positioning of the company within the Chinese express delivery market, suggesting a strong operational strategy [1]