Financial Performance - Revenue for the six months ended June 30, 2024, reached $4.86 billion, a 20.6% increase compared to the same period in 2023[2] - Gross profit surged to $535.7 million, marking a 176.8% year-over-year growth[2] - Adjusted EBITDA for the period was $350.8 million, a 795.6% increase from the previous year[2] - Operating profit for the period was $115.0 million, compared to a loss of $1.64 billion in the same period of 2023[2] - Net cash flow from operating activities reached $345.6 million, a significant improvement from $2.8 million in the previous year[2] - Revenue grew by 20.6% to $4,861.7 million in H1 2024, driven by growth in express delivery services across 13 countries[33] - Adjusted EBITDA for H1 2024 was $350.8 million, a significant improvement from $39.2 million in H1 2023[30] - The company's gross profit increased to $535.7 million in H1 2024, up from $193.5 million in H1 2023[30] - Adjusted EBIT improved to $118.2 million in H1 2024, compared to a loss of $212.8 million in H1 2023[30] - Revenue for the first half of 2024 was $4.862 billion, an increase of 20.6% compared to $4.030 billion in the same period of 2023[75] - Gross profit for the first half of 2024 was $535.732 million, a significant increase of 176.8% compared to $193.540 million in 2023[75] - Net profit for the first half of 2024 was $31.026 million, a turnaround from a net loss of $666.769 million in 2023[75] - Basic earnings per share for the first half of 2024 were $0.003, compared to a loss per share of $0.208 in 2023[75] - Total comprehensive loss for the first half of 2024 was $40.635 million, an improvement from a loss of $676.591 million in 2023[76] - Operating cash flow for the first six months of 2024 was $345.63 million, a significant increase from $2.8 million in the same period in 2023[77] - Net cash used in investing activities for the first six months of 2024 was $266.31 million, compared to $366.04 million in 2023[77] - Net cash used in financing activities for the first six months of 2024 was $114.71 million, compared to a net cash inflow of $64.17 million in 2023[77] - Total segment revenue for the first six months of 2024 was $4.86 billion, with Southeast Asia contributing $1.52 billion and China contributing $2.99 billion[82] - Adjusted EBITDA for the first six months of 2024 was $350.78 million, a significant improvement from $39.17 million in 2023[82] - The company reported a net profit of $31.03 million for the first six months of 2024, compared to a net loss of $666.77 million in 2023[83] - Basic earnings per share for the first six months of 2024 were $0.003, compared to a loss per share of $0.208 in 2023[85] - Diluted loss per share for the six months ended June 30, 2024, was $0.003, compared to a loss of $0.222 for the same period in 2023[87] - The company's net profit attributable to owners for the six months ended June 30, 2024, was $27.589 million, a significant improvement from a net loss of $640.967 million in the same period in 2023[87] Market Share and Parcel Volume - The company handled 11.01 billion parcels in the first half of 2024, a 38.3% increase from 7.97 billion parcels in the same period of 2023[6] - Southeast Asia market share stood at 27.4%, with parcel volume growing by 42.0% to 2.04 billion parcels[7] - China's parcel volume increased by 37.1% to 8.84 billion parcels, capturing an 11.0% market share[7] - New markets, including Saudi Arabia, UAE, Mexico, Brazil, and Egypt, saw a 63.9% increase in parcel volume to 136.3 million parcels[7] - Company's market share in Southeast Asia increased to 27.4% in H1 2024, up 2.0 percentage points from 2023[8] - Company's market share in China rose to 11.0% in H1 2024, up 1.1 percentage points from H1 2023[8] - Southeast Asia's total parcel volume is projected to reach 14.93 billion in 2024, a 17.1% increase from 2023[9] - Company processed 2.04 billion parcels in Southeast Asia in H1 2024, a 42.0% year-over-year increase[12] - Company is the leading express operator in Southeast Asia by parcel volume, maintaining a 27.4% market share in H1 2024[10] - Southeast Asia parcel volume increased by 42.0% YoY in H1 2024, reaching 11.2 million parcels per day[15] - China's express delivery industry volume grew by 23.1% YoY to 80.16 billion parcels in H1 2024[18] - The company processed 8.84 billion parcels in China in the first half of 2024, a 37.1% YoY increase from 6.45 billion in the same period of 2023, surpassing industry growth rates[20] - China's express delivery industry handled 80.16 billion parcels in H1 2024, growing 23.1% YoY, with the company capturing significant market share[20] - New market parcel volume increased by 63.9% to 136.3 million in H1 2024, up from 83.2 million in H1 2023, with market share rising from 6.0% to 6.1%[26] - Southeast Asia revenue increased by 22.0% from $1,246.1 million in the first half of 2023 to $1,520.0 million in the first half of 2024, with parcel volume growing by 42.0% from 1.438 billion to 2.043 billion pieces, capturing a 27.4% market share[39] - China revenue grew by 36.1% from $2,203.1 million in the first half of 2023 to $2,998.3 million in the first half of 2024, with parcel volume increasing by 37.1% from 6.446 billion to 8.836 billion pieces, achieving an 11.0% market share[40] - New markets revenue surged by 119.6% from $132.8 million in the first half of 2023 to $291.6 million in the first half of 2024, with parcel volume growing by 63.9% from 832 million to 1.363 billion pieces, increasing market share from 6.0% to 6.1%[41] Operational Efficiency and Cost Management - Southeast Asia single-ticket cost decreased by 15.5% YoY in H1 2024, driven by operational optimization and cost reduction strategies[13] - Average delivery time in Southeast Asia shortened by 13.8% YoY in H1 2024, with reduced loss and damage rates[14] - The company's single-ticket cost decreased from $0.34 in H1 2023 to $0.32 in H1 2024, driven by scale effects and operational optimization[22] - Southeast Asia single-ticket cost decreased from $0.71 in the first half of 2023 to $0.60 in the first half of 2024, driven by a 42.0% increase in parcel volume and operational optimization leveraging China's express delivery experience[43] - The company operates approximately 10,600 outlets in Southeast Asia, managing around 2,000 network partners, and reduced single-ticket pickup and delivery costs from $0.40 in the first half of 2023 to $0.37 in the first half of 2024[44] - Single-ticket sorting cost: The company reduced its single-ticket sorting cost from $0.09 in the first half of 2023 to $0.06 in the first half of 2024, driven by increased automation and employee training[45] - China single-ticket cost: The overall single-ticket cost in China decreased from $0.34 in the first half of 2023 to $0.32 in the first half of 2024, with transportation costs dropping from $0.08 to $0.07 and sorting costs from $0.06 to $0.05[46][48] - New market single-ticket cost: Single-ticket cost in new markets remained flat at $1.88 in the first half of 2024, despite rapid parcel volume growth and scale effects[50] - Total operating costs: The company's 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 reduced share-based payments and expenses[51] - Fulfillment costs: Fulfillment costs increased by $535.7 million in the first half of 2024 compared to the same period in 2023, driven by growth in parcel volume[51] - Fulfillment costs increased by 29.9% from $1,790.8 million in H1 2023 to $2,326.5 million in H1 2024, accounting for 44.4% and 47.9% of total revenue respectively[52] - Employee costs rose by 23.3% from $540.0 million in H1 2023 to $665.7 million in H1 2024, driven by increased headcount and higher average wages[52] - Other labor costs surged by 39.1% from $213.3 million in H1 2023 to $296.7 million in H1 2024 due to increased parcel volume[53] - Southeast Asia costs grew by 20.2% from $1,026.0 million in H1 2023 to $1,232.7 million in H1 2024, with parcel volume increasing by 42.0% to 2,042.9 million pieces[54] - China costs increased by 25.4% from $2,220.2 million in H1 2023 to $2,784.4 million in H1 2024, with parcel volume rising by 37.1% to 8,835.7 million pieces[55] - New markets costs surged by 64.2% from $156.2 million in H1 2023 to $256.6 million in H1 2024, driven by a 63.9% increase in parcel volume to 136.3 million pieces[55] - Gross margin improved from 4.8% in H1 2023 to 11.0% in H1 2024, with China turning from a -0.8% loss to a 7.1% profit[56][57] - Sales, general, and administrative expenses decreased by 78.4% from $1,767.9 million in H1 2023 to $381.7 million in H1 2024, primarily due to reduced share-based payments[58][59] Regional Performance - Southeast Asia adjusted EBIT grew by 45.9% YoY to $134.8 million in H1 2024, with an adjusted EBIT margin of 8.9%[16] - China's e-commerce retail sales grew by 8.8% YoY to RMB 6.0 trillion in H1 2024[17] - China business achieved adjusted EBITDA of $198.9 million in H1 2024, with an EBITDA margin of 6.6%, turning from a -2.0% margin in H1 2023[23] - Adjusted EBIT for China operations reached $59.6 million in H1 2024, a significant improvement from a loss of $183.1 million in H1 2023[23] - The company expanded into rural markets, reducing shipping costs for remote areas and improving e-commerce experiences, while launching agricultural support projects[21] - New market's nominal GDP reached $5.9 trillion in 2023, with an 8.0% YoY growth, and e-commerce penetration is expected to grow from 14.7% in 2023 to 32.5% by 2028[25] - New market's express delivery industry is projected to grow at an 18.5% CAGR, reaching 9.25 billion parcels by 2028, with a fragmented competitive landscape[25] - Southeast Asia's adjusted EBITDA increased by 12.9% from $184.1 million in H1 2023 to $207.8 million in H1 2024, with adjusted EBITDA margins of 14.8% and 13.7% respectively[61] - China's adjusted EBITDA turned from a loss of $45.0 million in H1 2023 to a profit of $198.9 million in H1 2024, with adjusted EBITDA margins improving from -2.0% to 6.6%[61] - New markets' adjusted EBITDA loss narrowed significantly from $55.2 million in H1 2023 to $7.8 million in H1 2024, with adjusted EBITDA margins improving from -41.6% to -2.7%[62] - Cross-border adjusted EBITDA loss decreased from $11.3 million in H1 2023 to $7.2 million in H1 2024[62] - Unallocated adjusted EBITDA loss increased from $33.5 million in H1 2023 to $40.8 million in H1 2024, mainly due to fair value changes in financial assets[62] Infrastructure and Network Expansion - The company operates in 13 countries, including seven Southeast Asian nations, China, and five new markets[6] - Company operates 237 transit centers, 254 automated sorting lines, and over 4,100 trunk lines with more than 9,900 vehicles, including 5,700 self-owned vehicles[8] - Company's network covers over 99% of county-level regions in China and over 95% in new markets[8] - Company has 8,000 network partners and 19,900 service points as of June 30, 2024[8] - The company operates 35 transfer centers, over 200 mainline vehicles, and more than 2,200 service points in new markets as of June 30, 2024[28] - The company added 800 new service points and invested in two automated sorting lines in new markets during H1 2024[28] - Southeast Asia operations: As of June 30, 2024, the company operates 119 transfer centers in Southeast Asia, a decrease of 29 compared to June 30, 2023. The company has optimized the layout of transfer centers and upgraded key centers with automated sorting equipment, increasing the number of automated sorting systems to 47, up by 11 from the previous year[45] - China network partners: As of June 30, 2024, the company has over 6,000 network partners and operates approximately 7,100 service points in China, with a slight decrease in service points compared to the previous year[47] - China transportation fleet: The company operates over 5,900干线 vehicles in China, with over 4,200 being self-owned, an increase of more than 1,000 self-owned vehicles compared to June 30, 2023[48] Revenue Composition and Business Segments - Express delivery services accounted for 97.5% of total revenue in H1 2024, up from 88.0% in H1 2023[33] - Cross-border services revenue decreased to $51.9 million in H1 2024 from $448.5 million in H1 2023, representing a shift in revenue composition[33] - Express service revenue increased 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, driven by growth in parcel volume from 7.97 billion to 11.01 billion pieces, a 38.3% increase[34] - Cross-border service revenue decreased by 88.4% from $448.5 million in the first half of 2023 to $51.9 million in the first half of 2024 due to business transformation and discontinuation of small parcel services[35] - Rental income grew by 22.3% from $23.3 million in the first half of 2023 to $28.5 million in the first half of 2024, primarily from property leasing in Southeast Asia and increased leasing of reusable bags in China[36] - Sales of accessories revenue surged by 237.7% from $8.5 million in the first half of 2023 to $28.6 million in the first half of 2024, driven by increased sales of thermal paper and waterproof bags[37] - Southeast Asia single-ticket revenue decreased from $0.87 in the first half of 2023 to $0.74 in the first half of 2024 due to promotional activities and strategic price adjustments to maintain competitiveness[42] - China single-ticket revenue: The single-ticket revenue in China remained stable at $0.34 in the first half of 2024, unchanged from the same period in 2023, due to optimized e-commerce platform parcel structure and improved cargo categories[47] - New market single-ticket revenue: Single-ticket revenue in new markets increased from $1.60 in the first half of 2023 to $2.14 in the first half of 2024, driven by changes in business volume structure and increased high-quality non-platform customers[49] Strategic Initiatives and Future Plans - The company plans to further expand market share, deepen partnerships with e-commerce platforms, and strengthen infrastructure in new markets[29] - The company increased brand customer acquisition, partnering with notable brands like Red Dragonfly and Wang Xiao Lu, enhancing brand value and customer structure[24] - Automation equipment investment in network endpoints increased, improving operational efficiency and reducing costs for both the

Investment Rating - The report initiates coverage with a "Buy" rating for the company [3][4]. Core Insights - The company is a leader in the Southeast Asian express logistics industry and is expanding its overseas logistics market. It has shown significant revenue growth, with a fivefold increase from 2020 to 2023, and is leveraging its experience in China to enhance its operations in Southeast Asia and other emerging markets [3][10][18]. Company Overview - The company, established in 2019, focuses on express transportation and cross-border logistics services, covering 13 countries including Indonesia, Vietnam, and China. It has a robust logistics network with over 8,500 partners and 19,600 collection and delivery points [10][13]. - The express service revenue has grown significantly, contributing to the overall revenue increase, with a reported revenue of 80.87 billion USD in 2023, up from 14.82 billion USD in 2020 [14][18]. Market Analysis - The domestic e-commerce market in China is experiencing rapid growth, with a 2023 online retail sales figure of 15.43 trillion RMB, reflecting an 11.90% year-on-year increase. The live e-commerce sector is particularly booming, with a market size reaching 4.92 trillion RMB in 2023, up 35.2% from the previous year [21][22]. - The Southeast Asian express market is projected to maintain a compound annual growth rate (CAGR) of 15.5% from 2023 to 2027, with the company holding a 25.4% market share in the region as of 2023 [28][30]. Financial Overview - The company’s total revenue is expected to reach 766.19 billion RMB in 2024, with a projected net profit of -28.25 billion RMB. The earnings per share (EPS) are forecasted to improve from -0.32 RMB in 2024 to 0.22 RMB by 2026 [4][5]. - The gross profit margin has improved from -17.03% in 2020 to 5.34% in 2023, indicating better cost management and operational efficiency [18][19]. Future Outlook - The company aims to consolidate its position in the Chinese market while continuing to expand in Southeast Asia and new markets. The focus will be on leveraging its logistics network and operational strategies to capture additional market share [33][35].

Investment Rating - The report assigns a "Buy" rating to the company, with an initial rating of "No Rating" prior to this report [1][3]. Core Insights - The company is a leader in the Southeast Asian express logistics industry and is expanding into overseas markets, leveraging its experience from China. The financial performance has shown consistent growth in business volume and improving profitability. The integration of advanced domestic practices into Southeast Asia and other emerging markets is expected to yield significant future growth [3][4]. Summary by Sections Company Overview - The company, J&T Express, was established in Indonesia and has rapidly expanded its global presence, focusing on express delivery services. It operates in 13 countries, including major markets in Southeast Asia and China. The express service remains the core business, while cross-border logistics is increasingly contributing to revenue [8][12][14]. Market Analysis - The domestic e-commerce market in China is experiencing significant growth, with live-streaming e-commerce gaining a larger market share. The Southeast Asian express market is projected to maintain a high growth rate, with the company holding a leading market share. Emerging markets are still in the early stages of e-commerce development but show rapid growth potential [19][26][29]. Financial Overview - The company has seen substantial revenue growth from $15.35 billion in 2020 to $88.49 billion in 2023, with a significant improvement in gross margin from -17.03% to 5.34% during the same period. The net profit margin has also shown improvement, indicating better cost management and operational efficiency [16][17][41]. Profitability Forecast and Valuation - The company is expected to generate revenues of RMB 766.19 billion, RMB 910.85 billion, and RMB 1,065.31 billion for the years 2024 to 2026, with corresponding net profits of -28.25 billion, 10.47 billion, and 19.01 billion respectively. The valuation is based on a price-to-sales (P/S) ratio, with estimates indicating a reasonable valuation compared to peers [36][42][41].

Global Expansion and Market Penetration - J&T Express achieved a peak daily order volume of 50 million in China in 2022[3] - The company expanded into 5 new countries during the pandemic, entering the Middle East, Latin America, and North Africa[3] - J&T Express operates in 17,508 islands in Indonesia, ensuring last-mile delivery even to remote locations[4] - In Saudi Arabia, the company's logistics network spans 5,000 kilometers, overcoming local transportation bottlenecks[4] - The company's global strategy focuses on deep penetration into every island, desert, and remote town[5] - J&T Express emphasizes the importance of respecting and understanding local cultures in its international expansion[4] - The company's entry into the Chinese market in 2019 was described as a high-risk, high-reward move[6] - J&T Express attributes 90% of its success to favorable market opportunities, particularly in Indonesia and China[6] - The company handled 18.81 billion parcels in 2023, a 29.0% YoY increase, with a 369.0% YoY growth in new markets[27] - The company's market share in Southeast Asia increased to 25.4% in 2023 from 22.5% in 2022[27] - The company's market share in China increased to 11.6% in 2023 from 10.9% in 2022[27] - The company's market share in new markets increased to 6.0% in 2023 from 1.6% in 2022[27] - The company achieved over 95% coverage in new markets and over 99% coverage at the county level in China[28] - The company processed a peak of over 16 million parcels per day during the "Double 12" period in Southeast Asia in 2023[29] - The company processed 3.24 billion parcels in Southeast Asia in 2023, a 28.9% YoY increase from 2.51 billion in 2022[30] - The company's market share in Southeast Asia increased to 25.4% in 2023, up 2.9 percentage points from 22.5% in 2022[30] - The company processed 230.3 million parcels in new markets in 2023, a 369.0% YoY increase from 49.1 million in 2022, with market share rising from 1.6% to 6.0%[43][44] - The company strengthened partnerships with cross-border and local e-commerce platforms in new markets, including Shopee, AliExpress, Shein, and Noon[45] - The company invested in infrastructure in new markets, operating 35 transit centers, over 200 trunk vehicles, and more than 1,300 service points as of December 31, 2023[46] - J&T Express holds a 25.4% market share in Southeast Asia by parcel volume in 2023, ranking first for four consecutive years[47] - In China, J&T Express achieved an 11.6% market share in 2023, ranking sixth and increasing by 0.7 percentage points compared to 2022[48] - J&T Express processed 32.4 billion parcels in Southeast Asia in 2023, leading the market[48] - In China, J&T Express handled 153.4 billion parcels in 2023, ranking sixth with an 11.6% market share[50] - J&T Express increased its market share in new markets from 1.6% in 2022 to 6.0% in 2023, a 4.4 percentage point increase[50] - J&T Express operates in Brazil, Mexico, Saudi Arabia, and Egypt, ranking in the top five by parcel volume in these markets in 2023[50] - J&T Express collaborates with major e-commerce platforms including Shopee, Lazada, TikTok, and Temu, enhancing its logistics service competitiveness[49] - The company’s regional agent model enables efficient network management and rapid market entry, reducing capital expenditure[52] - J&T Express focuses on technology R&D, such as developing an order management system tailored for overseas social e-commerce scenarios[49] - The company’s global network supports cross-border e-commerce by providing last-mile delivery services, leveraging its local infrastructure in Southeast Asia and new markets[51] - Geographic coverage in new markets has reached over 95%, with plans to further deepen and densify network coverage[58] - Focus on entering new markets in the Middle East and Latin America, leveraging existing market knowledge and capabilities[59] Financial Performance - Revenue for 2023 reached $8,849,251 thousand, a significant increase from $7,267,428 thousand in 2022[15] - Gross profit for 2023 was $472,798 thousand, compared to a gross loss of $270,238 thousand in 2022[15] - Operating loss for 2023 was $1,766,550 thousand, an increase from $1,389,565 thousand in 2022[15] - Total assets for 2023 amounted to $6,601,414 thousand, up from $5,935,559 thousand in 2022[15] - Adjusted net loss for 2023 was $432,277 thousand, an improvement from $1,488,297 thousand in 2022[15] - Non-current assets for 2023 were $3,464,108 thousand, up from $3,089,262 thousand in 2022[15] - Current assets for 2023 were $3,137,306 thousand, compared to $2,846,297 thousand in 2022[15] - Total equity for 2023 was $2,479,599 thousand, a significant improvement from a deficit of $4,984,248 thousand in 2022[15] - Revenue for 2023 reached $8,849,251 thousand, compared to $7,267,428 thousand in 2022[62] - Gross profit for 2023 was $472,798 thousand, a significant improvement from a gross loss of $270,238 thousand in 2022[62] - Adjusted EBITDA for 2023 was $146,694 thousand, compared to a loss of $894,090 thousand in 2022[62] - Total revenue increased by 21.8% from $7,267.4 million in 2022 to $8,849.3 million in 2023, driven by growth in express services across 13 countries[65] - Express service revenue grew by 24.7% from $6,483.0 million in 2022 to $8,086.8 million in 2023, with parcel volume increasing by 29.0% from 14.59 billion to 18.81 billion[66] - Southeast Asia revenue increased by 10.6% from $2,381.7 million in 2022 to $2,633.4 million in 2023, with parcel volume rising by 28.9% from 2,513.2 million to 3,240.0 million[71] - China revenue grew by 27.7% from $4,096.2 million in 2022 to $5,229.3 million in 2023, with parcel volume increasing by 27.6% from 12,025.6 million to 15,341.4 million[72] - New markets revenue surged by 299.7% from $81.8 million in 2022 to $326.8 million in 2023, with parcel volume growing by 369.0% from 49.1 million to 230.3 million[72] - Cross-border revenue decreased by 6.8% from $707.8 million in 2022 to $659.8 million in 2023 due to business transformation adjustments[72] - Rental income increased by 23.7% from $44.4 million in 2022 to $54.9 million in 2023, driven by vehicle leasing in Southeast Asia and reusable bag leasing in China[68] - Sales of accessories revenue rose by 39.8% from $23.7 million in 2022 to $33.2 million in 2023, primarily due to increased sales of express-related materials[69] - Other income grew by 70.6% from $8.6 million in 2022 to $14.6 million in 2023, mainly due to increased transportation income[69] - Southeast Asia's single-ticket revenue decreased from $0.95 in 2022 to $0.81 in 2023, attributed to promotional activities and strategic price adjustments[73] - Southeast Asia's single-ticket cost decreased from $0.76 in 2022 to $0.67 in 2023, driven by operational optimizations and leveraging China's express delivery experience[74] - The number of Southeast Asia outlets exceeded 10,600, managing over 2,400 network partners, with single-ticket pickup and delivery costs reduced from $0.43 to $0.40[74] - Southeast Asia's transportation fleet grew to over 3,300 vehicles, with single-ticket transportation costs decreasing from $0.22 to $0.17[74] - China's single-ticket revenue remained stable at $0.34 in 2023, with single-ticket costs dropping from $0.40 to $0.34 due to refined management[76][77] - China's transportation fleet exceeded 6,100 vehicles, with single-ticket transportation costs reduced from $0.09 to $0.07[78] - New market single-ticket revenue decreased from $1.67 in 2022 to $1.42 in 2023, while single-ticket costs dropped from $2.05 to $1.41[79][80] - Total operating costs and expenses increased by 21.9% from $8,677.7 million in 2022 to $10,580.0 million in 2023, primarily due to rising fulfillment costs[81] - Fulfillment costs increased by 25.7% from $3,320.2 million in 2022 to $4,172.9 million in 2023, accounting for 45.7% and 47.2% of total operating revenue respectively[82] - Employee costs decreased by 7.5% from $1,290.3 million in 2022 to $1,194.0 million in 2023, primarily due to a decline in share-based compensation expenses[82] - Southeast Asia revenue grew by 13.5% from $1,905.7 million in 2022 to $2,163.1 million in 2023, driven by a 28.9% increase in parcel volume[84] - China revenue increased by 8.6% from $4,760.9 million in 2022 to $5,170.4 million in 2023, with parcel volume rising by 27.6%[85] - New markets revenue surged by 222.5% from $100.8 million in 2022 to $325.2 million in 2023, supported by a 369.0% increase in parcel volume[85] - Gross margin improved from a loss of 3.7% in 2022 to a profit of 5.3% in 2023, marking a turnaround[86] - Adjusted EBITDA turned positive, increasing from a loss of $894.1 million in 2022 to a profit of $146.7 million in 2023[90] - Southeast Asia's adjusted EBITDA rose by 13.3% from $331.6 million in 2022 to $375.7 million in 2023, with margins improving from 13.9% to 14.3%[91] - China achieved its first annual adjusted EBITDA profit of $30.7 million in 2023, compared to a loss of $722.7 million in 2022[91] - Cross-border adjusted EBITDA loss increased to $107.0 million in 2023 from $95.1 million in 2022, primarily due to one-time costs from the shutdown of cross-border parcel business in Q4 2023[92] - New markets adjusted EBITDA loss improved to $81.7 million in 2023 from $73.7 million in 2022, with adjusted EBITDA rate improving from -90.2% to -25.0%[92] - Financial costs remained stable at $80.3 million in 2023 compared to $77.5 million in 2022, mainly due to interest expenses on borrowings[93] - Other income decreased to $46.3 million in 2023 from $98.1 million in 2022, primarily due to policy changes affecting subsidy income[94] - Cash and cash equivalents totaled $1,483.2 million as of December 31, 2023, with operating cash flow of $342.0 million compared to cash used in operations of $519.8 million in 2022[95] - The company's debt-to-asset ratio improved to 62.4% as of December 31, 2023, from 184.0% as of December 31, 2022[95] - Capital expenditures totaled $474.6 million in 2023, down from $580.7 million in 2022[98] - The company acquired Shenzhen Fengwang Information for $63.8 million in May 2023, recognizing goodwill of $33.6 million[100] - The company had 149,186 full-time employees as of December 31, 2023[101] - The company's restricted deposits as collateral amounted to $32.6 million as of December 31, 2023, compared to $41.7 million in the previous year[103] - The company holds convertible bonds issued by Huisen Global Limited with a fair value of approximately $483.5 million, representing 7% of the company's total assets[104] - Huisen Global Limited achieved revenue of RMB 6,960.1 million in 2023, with net assets of RMB 4,037.2 million and current assets of RMB 4,631.8 million as of December 31, 2023[104] - The company recognized a fair value loss of $3.2 million on its investment in Huisen Global Limited's convertible bonds in 2023[104] - Huisen Global Limited plans to expand into new markets including the Philippines, Vietnam, Mexico, and Singapore, in addition to its existing presence in Indonesia and Malaysia[104] - The company has no significant investment or capital asset plans as of December 31, 2023[104] - The company has no significant contingent liabilities as of December 31, 2023[104] - The company raised a net amount of HKD 3,553.50 million from its global offering, with 30% allocated to expanding logistics networks, 30% to entering new markets, 30% to R&D and technological innovation, and 10% for general corporate purposes[161] - As of December 31, 2023, the company had utilized HKD 167.8 million of the net proceeds from the global offering, with HKD 286.5 million remaining unused[162] - The company listed on the Hong Kong Stock Exchange on October 27, 2023, issuing 326,550,400 B shares at HKD 12.00 per share[160] - The company plans to fully utilize the remaining net proceeds from the global offering by the end of 2027[162] Market Trends and Industry Growth - Southeast Asia's nominal GDP reached $3.8 trillion in 2023, with a year-on-year growth of 6.5%[16] - Southeast Asia's social retail total reached $1.0 trillion in 2023, with a year-on-year growth of 5.2%[17] - Southeast Asia's e-commerce retail market transaction volume grew by 22.6% YoY to $189.74 billion in 2023, with e-commerce penetration reaching 18.2%, up 2.6 percentage points[18] - Social e-commerce in Southeast Asia reached $81.95 billion in 2023, accounting for 43.2% of the total e-commerce retail market, with a YoY growth of 36.2%[18] - Southeast Asia's express delivery market handled 12.75 billion parcels in 2023, a YoY increase of 14.4%, with a projected CAGR of 15.0% from 2024 to 2028[19] - China's GDP exceeded RMB 126.1 trillion in 2023, growing by 5.2% YoY, with consumption contributing 82.5% to economic growth[20] - China's e-commerce retail market reached RMB 13.0 trillion in 2023, with a YoY growth of 8.4% and an e-commerce penetration rate of 27.6%[21] - China's social e-commerce market grew from $163.79 billion in 2019 to $742.67 billion in 2023, with a CAGR of 45.9%[21] - China's express delivery industry handled 132.07 billion parcels in 2023, a YoY increase of 19.4%, with service quality improving significantly[22] - New market nominal GDP grew by 8.0% YoY in 2023, reaching $5.9 trillion, with a projected CAGR of 5.1% from 2024 to 2028[23] - New market e-commerce retail transaction volume reached $109.96 billion in 2023, a 27.1% YoY increase, with a projected CAGR of 21.3% from 2024 to 2028[24] - New market express delivery parcel volume reached 3.87 billion in 2023, a 25.0% YoY increase, with a projected CAGR of 18.3% from 2024 to 2028[25] - The global e-commerce retail transaction volume is projected to grow at a CAGR of 9% from 2024 to 2028, with the company's 13 markets exceeding this growth rate[57] - Southeast Asia e-commerce and express delivery market projected to grow at a CAGR of 17.7% and 15.0% respectively over the next five years[58] Operational Efficiency and Cost Management - The company's average single-ticket cost in Southeast Asia decreased by 11.8% YoY to $0.67 in 2023 from $0.76 in 2022[33] - Adjusted EBITDA in Southeast Asia reached $375.7 million in 2023, a 13.3% YoY increase, with an adjusted EBITDA margin of 14.3%, up 0.4 percentage points from 13.9% in 2022[34] - The company's average delivery time in Southeast Asia decreased by 6.5% YoY in 2023, while customer complaint rates continued to decline[32] - The company's cost reduction strategy in Southeast Asia, driven by operational optimization and leveraging China's experience, enabled

Investment Rating - Maintained "Overweight" rating for J&T Express-W (01519) [1] Core Views - J&T Express continues to experience high growth in business volume, with a clear growth trajectory [1] - The company's domestic and cross-border business expansion, coupled with cost optimization, supports its growth potential [6] Business Performance - In 2023H2, J&T Express achieved a domestic business volume of 8.896 billion parcels, a YoY increase of 38.49% [2] - Southeast Asia and new markets saw business volumes of 1.802 billion and 147 million parcels, respectively, with YoY growth of 38.78% and 255.31% [2] - In 2024Q1, the company's total business volume reached 5.032 billion parcels, a YoY increase of 48.5%, with Southeast Asia, China, and new markets contributing 1.026 billion, 3.942 billion, and 64 million parcels, respectively [3] - Market share in Southeast Asia, China, and new markets reached 25.4%, 11.6%, and 6.0% in 2023, with YoY increases of 2.9pcts, 0.7pcts, and 4.4pcts, respectively [2] Financial Performance - In 2023, the domestic segment achieved an adjusted EBITDA of $31 million, turning positive for the first time [5] - Southeast Asia's adjusted EBITDA reached $376 million, a YoY increase of 13.3%, while the new market segment recorded an adjusted EBITDA loss of $82 million [5] - Revenue for 2024-2026 is forecasted at $11.509 billion, $14.033 billion, and $16.558 billion, respectively [6] - Net profit is expected to improve significantly, with forecasts of -$441 million, $173 million, and $342 million for 2024-2026 [6] Cost Optimization and Network Expansion - Unit costs in Southeast Asia, China, and new markets decreased by 11.96%, 14.87%, and 31.25% YoY in 2023 [5] - The company operates over 6,100干线 vehicles in China, including 3,700 self-owned vehicles, and 3,300干线 vehicles in Southeast Asia, with 1,300 self-owned vehicles [5] - Sales, administrative, and general expenses as a percentage of revenue decreased by 6.64pcts to 8.08% in 2H2023 [5] Market Data - Current stock price: HKD 10.50 [3] - 52-week price range: HKD 9.80-16.54 [3] - Market capitalization: HKD 92.52775 billion [3] - Average daily trading volume: HKD 170.05 million [3] Growth Prospects - The company's innovative agent model and cost optimization in domestic markets, combined with overseas market红利, are expected to sustain growth [6] - Deepening cooperation with cross-border e-commerce platforms like SHEIN is likely to drive further business volume growth [6]

Financial Performance - Revenue for the fiscal year 2023 reached $8,849.251 million, a 21.8% increase compared to $7,267.428 million in 2022[1] - Adjusted net loss improved significantly to $432.277 million in 2023, a 71.0% reduction from $1,488.297 million in 2022[1] - Adjusted EBITDA turned positive at $146.694 million in 2023, compared to a negative $894.090 million in 2022[1] - Gross profit for 2023 was $472.798 million, a significant improvement from a gross loss of $270.238 million in 2022[57] - The company reported a net loss of $1,156.378 million for 2023, compared to a net profit of $1,572.567 million in 2022[57] - Adjusted EBITDA for 2023 was $146,694 thousand, a significant improvement from the 2022 loss of $894,090 thousand[108] - The company reported a net loss attributable to owners of $1,100,988 thousand in 2023, compared to a net profit of $1,656,168 thousand in 2022[110] - Basic loss per share for 2023 was 26.3 cents, compared to a basic earnings per share of 54.8 cents in 2022[110] Regional Revenue and Market Share - Southeast Asia segment revenue grew to $2,633.417 million in 2023, up from $2,381.726 million in 2022, with a market share increase to 25.4% from 22.5%[3][4] - China segment revenue increased to $5,229.255 million in 2023, up from $4,096.177 million in 2022, with a market share rise to 11.6% from 10.9%[3][4] - New markets segment revenue surged to $326.802 million in 2023, a significant increase from $81.767 million in 2022, with market share jumping to 6.0% from 1.6%[3][4] - Southeast Asia revenue increased by 10.6% from $2,381.7 million in 2022 to $2,633.4 million in 2023, with parcel volume growing by 28.9% to 3.24 billion pieces and market share reaching 25.4%[67] - China revenue grew by 27.7% from $4,096.2 million in 2022 to $5,229.3 million in 2023, with parcel volume increasing by 27.6% to 15.34 billion pieces and market share reaching 11.6%[68] - New markets revenue surged by 299.7% from $81.8 million in 2022 to $326.8 million in 2023, driven by a 369.0% increase in parcel volume to 230.3 million pieces and market share rising to 6.0%[68] Parcel Volume and Delivery Metrics - Southeast Asia parcel volume grew by 28.9% to 3,240.0 million pieces in 2023, up from 2,513.2 million pieces in 2022[4] - China parcel volume increased by 27.6% to 15,341.4 million pieces in 2023, up from 12,025.6 million pieces in 2022[4] - New markets parcel volume soared by 369.0% to 230.3 million pieces in 2023, up from 49.1 million pieces in 2022[4] - The company processed 18.81 billion parcels in 2023, a 29.0% YoY increase from 14.59 billion in 2022[19] - Southeast Asia parcel volume increased by 28.9% YoY in 2023, with average delivery time reduced by 6.5% and customer complaint rate continuously declining[26][27] - China parcel volume reached 15.34 billion in 2023, a 27.6% YoY increase, capturing 11.6% market share and ranking 6th among Chinese peers[29][30] - New market parcel volume grew by 369.0% year-over-year, with per-parcel revenue decreasing from $1.67 in 2022 to $1.42 in 2023[75] Operational Efficiency and Cost Management - Southeast Asia's per-parcel cost decreased from $0.76 in 2022 to $0.67 in 2023, an 11.8% reduction[27] - Southeast Asia adjusted EBITDA reached $375.7 million in 2023, a 13.3% YoY increase, with adjusted EBITDA margin improving to 14.3% from 13.9% in 2022[28] - China's per-parcel cost decreased from $0.40 in 2022 to $0.34 in 2023, with transportation costs dropping from $0.09 to $0.07 and sorting costs from $0.08 to $0.06[72][74] - New market per-parcel costs decreased from $2.05 in 2022 to $1.41 in 2023 due to rapid parcel volume growth and initial scale effects[76] - The company's single-ticket express cost decreased from $0.40 in 2022 to $0.34 in 2023, benefiting from economies of scale and optimized operational management[34] - Southeast Asia single-ticket revenue decreased from $0.95 in 2022 to $0.81 in 2023 due to promotional activities and strategic price adjustments to maintain competitiveness[69] - Southeast Asia's per-parcel cost decreased from $0.76 in 2022 to $0.67 in 2023, driven by operational optimizations and leveraging China's logistics experience[70] E-commerce and Market Trends - Southeast Asia's e-commerce retail market transaction value grew by 22.6% to $189.74 billion in 2023, with e-commerce penetration reaching 18.2%, up 2.6 percentage points[6] - Social e-commerce retail transaction volume reached $81.95 billion in 2023, a year-on-year increase of 36.2%, accounting for 43.2% of the total e-commerce retail market, and is expected to reach 50.1% by 2028[7] - Southeast Asia's express delivery market handled 12.75 billion parcels in 2023, a year-on-year increase of 14.4%, and is projected to grow to 25.98 billion parcels by 2028 with a CAGR of 15.0%[8] - China's e-commerce retail sales reached 13.0 trillion yuan in 2023, a year-on-year increase of 8.4%, with an e-commerce penetration rate of 27.6%[11] - China's social e-commerce retail market grew from $163.79 billion in 2019 to $742.67 billion in 2023, with a CAGR of 45.9%, and is expected to grow at a CAGR of 18.1% from 2024 to 2028[11] - E-commerce retail transaction volume in new markets reached $109.96 billion in 2023, a 27.1% YoY increase, with a projected CAGR of 21.3% from 2024 to 2028[15] - E-commerce penetration rate in new markets was 14.7% in 2023, expected to grow to 32.5% by 2028[15] Strategic Initiatives and Expansion - The company plans to expand into the Middle East and Latin America markets, leveraging existing market knowledge and capabilities[55] - The company will invest in automation equipment and AI technology to enhance sorting efficiency and accuracy in its logistics centers[54] - The company will increase the use of RFID technology and invest in intelligent management systems to monitor and optimize energy and water usage[56] - The company's express delivery business spans 13 countries, including 5 new market countries: Saudi Arabia, UAE, Mexico, Brazil, and Egypt[18] - The company's network covers over 99% of county-level regions in China and over 95% in new markets, with 8,500 network partners and 19,600 service points[20] - The company operates 237 transit centers, over 3,900 trunk lines, and more than 9,600 trunk vehicles, including over 5,100 self-owned vehicles[20] - The company strengthened partnerships with global and local e-commerce platforms, including Shopee, AliExpress, Shein, Temu, TikTok, and Kwai, to enhance cross-border and local logistics services[37] Corporate Governance and Compliance - The company 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[116] - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2023[118] - The Board of Directors does not recommend the payment of a final dividend for the year ended December 31, 2023[120] - The Audit Committee reviewed the audited consolidated financial statements for the year ended December 31, 2023, and discussed accounting policies, risk management, and internal controls with senior management and auditors[121] - The company has adopted the Standard Code for Securities Transactions by Directors and confirmed that all directors complied with the code during the reporting period[117] - The company will continue to review and strengthen its corporate governance practices to ensure compliance with the Corporate Governance Code[117] Financial Risks and Capital Expenditure - Foreign exchange risk: If the RMB appreciates or depreciates by 5% against the USD, the pre-tax loss for 2022 and 2023 would decrease or increase by $29,000 and $4,055,000 respectively[92] - Foreign exchange risk: If the Indonesian Rupiah appreciates or depreciates by 5% against the USD, the pre-tax profit for 2022 and 2023 would decrease or increase by $1,000 and $2,185,000 respectively[92] - Foreign exchange risk: If the Thai Baht appreciates or depreciates by 5% against the USD, the pre-tax loss for 2022 and 2023 would increase or decrease by $2,000 and $185,000 respectively[92] - Foreign exchange risk: If the Vietnamese Dong appreciates or depreciates by 5% against the USD, the pre-tax profit for 2023 would increase or decrease by $351,000[92] - Foreign exchange risk: If the Malaysian Ringgit appreciates or depreciates by 5% against the USD, the pre-tax loss for 2023 would decrease or increase by $451,000[93] - Foreign exchange risk: If the Singapore Dollar appreciates or depreciates by 5% against the USD, the pre-tax loss for 2022 and 2023 would increase or decrease by $5,000 and $35,000 respectively[94] - Foreign exchange risk: If the Philippine Peso appreciates or depreciates by 5% against the USD, the pre-tax profit for 2022 and 2023 would decrease or increase by $2,490,000 and $4,454,000 respectively[94] - Capital expenditure: Total capital expenditure for 2023 and 2022 was $474.6 million and $580.7 million respectively[95] - Capital expenditure commitments: As of December 31, 2023, the company had capital expenditure commitments of $134,946 thousand, including $117,311 thousand for buildings and $11,465 thousand for land use rights in China[96] - Acquisition: In June 2023, the company acquired Shenzhen Fengwang Information Technology Co., Ltd. for a total cash consideration of $63,789,000, resulting in goodwill of $33,629,000[97] Cash Flow and Debt Management - The company generated $342.0 million in cash from operating activities in 2023, compared to $519.8 million used in 2022, with cash and cash equivalents totaling $1,483.2 million as of December 31, 2023[91] - The company's debt-to-asset ratio improved to 62.4% as of December 31, 2023, from 184.0% in 2022[91] - Cash flow from operating activities improved to $341,953 thousand in 2023 from a negative $519,817 thousand in 2022[103] - Cash and cash equivalents at the end of 2023 were $1,483,198 thousand, slightly lower than $1,504,048 thousand at the end of 2022[103] Accounting and Financial Reporting - The company adopted new or revised accounting standards effective January 1, 2023, with no material impact on financial statements[104] - The company expects no significant impact from future adoption of new or revised accounting standards, except for IAS 1 amendments[106] - Trade receivables as of the end of 2023 amounted to $555,978 thousand, with $319,037 thousand due within 1 month[114] - Trade payables as of the end of 2023 totaled $466,904 thousand, with $433,167 thousand due within 3 months[115]