Group 1 - The core viewpoint of the article is that JD Logistics reported significant revenue growth and profitability in its 2024 financial results, indicating a strong performance in the logistics sector [1] - In 2024, JD Logistics achieved a revenue of 182.8 billion yuan, representing a year-on-year increase of 9.7% [1] - The fourth quarter revenue reached 52.1 billion yuan, showing a year-on-year growth of 10.4% [1] Group 2 - The adjusted net profit for the year 2024 was 7.9 billion yuan, which is a remarkable year-on-year increase of 186.8% [1] - Revenue from external customers amounted to 127.8 billion yuan, reflecting a year-on-year growth of 9.6% and accounting for nearly 70% of total revenue [1] - JD Logistics has served over 80,000 external integrated supply chain customers [1]

Financial Performance - For the fiscal year ending December 31, 2024, JD Logistics reported total revenue of RMB 182.84 billion, a year-on-year increase of 9.7%[7] - Gross profit for the same period reached RMB 18.70 billion, reflecting a significant growth of 47.4% compared to the previous year[7] - The company achieved a pre-tax profit of RMB 7.72 billion, marking a remarkable increase of 376.6% year-on-year[7] - Net profit for the fiscal year was RMB 7.09 billion, which is a staggering increase of 507.2% compared to the previous year[7] - The non-IFRS profit for the year was RMB 7.92 billion, up 186.8% year-on-year, with a non-IFRS profit margin of 4.3%, an increase of 2.7 percentage points[7] - In 2024, the company's total revenue reached RMB 182.8 billion, a year-on-year increase of 9.7%, with external customer revenue at RMB 127.8 billion, up 9.6%, accounting for nearly 70% of total revenue[17] - The non-IFRS profit for 2024 was RMB 7.9 billion, a significant year-on-year increase of 186.8%, with a profit margin of 4.3%, marking the highest levels since the company went public[18] - The annual profit for 2024 reached RMB 7,087,553 thousand, a significant increase from RMB 1,167,195 thousand in 2023, representing a growth of approximately 507%[121] - The total revenue for the year ended December 31, 2024, was RMB 182.84 billion, an increase from RMB 166.62 billion in 2023, representing a growth of approximately 9.3%[119] Customer Growth and Market Expansion - The number of external integrated supply chain customers increased to 80,703, representing an 8.0% year-on-year growth, with an average revenue per customer of RMB 400,000[12] - The integrated supply chain customer revenue reached RMB 87.4 billion in 2024, with external integrated supply chain customer revenue at RMB 32.3 billion, maintaining a steady growth trend[22] - The number of external integrated supply chain customers increased to 80,703, representing an 8.0% year-on-year growth, with an average revenue per external customer of RMB 400,000[22] - The number of external integrated supply chain customers grew from 74,714 in 2023 to 80,703 in 2024, reflecting increased demand for services[74] Operational Efficiency and Technology - JD Logistics has integrated with the Taobao Tmall platform, enhancing its service capabilities across major e-commerce platforms in China[12] - The company operates 9 dedicated cargo aircraft, improving service efficiency and market competitiveness, particularly for high-value perishable goods[13] - The company continues to focus on technology innovation and investment, enhancing operational automation, digitalization, and intelligent decision-making to optimize cost and efficiency[21] - The logistics technology initiative includes the upgrade of the "JD Logistics Super Brain," integrating AI, big data, and operations research to enhance supply chain efficiency[33] - The "Smart Wolf" solution was launched in 2024, featuring high-density storage and full-process automation, significantly improving picking and storage efficiency[36] Infrastructure and Logistics Network - The company has established over 100 bonded, direct mail, and overseas warehouses, covering 19 countries and regions, with a total management area exceeding 1 million square meters[21] - The company expanded its overseas warehouse in Malaysia, doubling its area, and opened a new overseas warehouse in Japan, improving regional coverage capabilities[26] - The logistics network includes warehousing, transportation, last-mile delivery, and cold chain networks, forming a robust foundation for supply chain solutions[38] - The company operates a nationwide warehousing network with over 1,600 owned warehouses and more than 2,000 third-party cloud warehouses, totaling over 32 million square meters of managed area as of December 31, 2024[39] - The cold chain network includes approximately 60 temperature-controlled warehouses for fresh and frozen foods, and over 40 specialized warehouses for pharmaceuticals and medical devices, with a total area of around 400,000 square meters as of December 31, 2024[45] Financial Stability and Cash Flow - The operating cash flow for 2024 was RMB 20,790,727,000, an increase from RMB 16,352,016,000 in 2023, reflecting a growth of approximately 27%[96] - The company's free cash flow for 2024 was RMB 8,100,000,000, compared to RMB 2,800,000,000 in 2023, marking a growth of about 189%[97] - As of December 31, 2024, the total cash resources of the company amounted to RMB 47.8 billion[95] - The company's total liabilities decreased from RMB 15,099,215,000 in 2023 to RMB 840,448,000 in 2024, indicating improved financial stability[96] - The company's debt-to-equity ratio was approximately 13.1%[103] Employee and Operational Costs - The total human resources expenditure, including both employees and external personnel, reached RMB 89.2 billion for the fiscal year ending December 31, 2024[51] - Employee compensation and benefits expenses for 2024 totaled RMB 68.8 billion, a year-on-year increase of 10.7% from RMB 62.2 billion in 2023[111] - Operating costs rose by 9.9% from RMB 42,847,951 thousand in Q4 2023 to RMB 47,080,378 thousand in Q4 2024, but the percentage of operating costs to revenue decreased from 90.8% to 90.4%[61] Corporate Governance and Sustainability - JD Logistics has been recognized in the S&P Global Corporate Sustainability Assessment, reflecting its commitment to sustainable development[13] - The company is committed to green supply chain practices, focusing on innovations in warehousing, transportation, and packaging to reduce logistics costs and promote high-quality industrial development[51] - The company has established an audit committee to monitor risk management policies and ensure effective internal control systems[151] - The company has complied with all applicable corporate governance codes as of December 31, 2024[148] Dividends and Shareholder Returns - The board of directors has not recommended a final dividend for the fiscal year ending December 31, 2024[8] - The company did not declare any dividends for the year ended December 31, 2024, consistent with 2023[140]

Investment Rating - The report assigns an "Accumulate" rating for JD Logistics (02618) [2] Core Insights - JD Logistics has turned profitable in 2023 with an adjusted net profit of 2.76 billion RMB, a year-on-year increase of 218.8%, and achieved a record high adjusted profit margin of 5.8% in Q3 2024 [6][31] - The integrated supply chain logistics industry is expected to continue consolidating, with JD Logistics poised to increase its order volume through integration with the Taotian platform [6][8] - The company has established a highly coordinated network comprising six major components: warehousing, comprehensive transportation, last-mile delivery, large items, cold chain logistics, and cross-border logistics [17][41] Summary by Sections 1. Company Overview - JD Logistics was established in 2007 as an internal logistics department of JD Group and began serving external customers in 2017, becoming a leader in integrated supply chain services [17][18] - The company has significantly expanded its external customer base, with external revenue exceeding 50% since 2021 [19][25] 2. Market Dynamics - The integrated supply chain logistics market in China reached 2,026 billion RMB in 2020 and is projected to grow to 3,190 billion RMB by 2025, with a compound annual growth rate of 9.5% [6] - JD Logistics ranks as the fifth largest integrated logistics service provider globally and second in China, capturing approximately 1.7% of the third-party logistics spending in 2023 [6] 3. Business Growth and Efficiency - The company has seen significant growth in its business volume, with a notable increase in warehouse efficiency and revenue per square meter from 3,494 RMB in 2020 to 5,207 RMB in 2023 [6][41] - The integration of technology, including cloud computing and AI, has enhanced operational efficiency and positioned JD Logistics as a technology-driven logistics service provider [6][41] 4. Financial Projections - JD Logistics is expected to achieve net profits of 6.53 billion RMB, 7.73 billion RMB, and 8.95 billion RMB for the years 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 13.9, 11.8, and 10.2 [8][9]

Event Overview - JD.com launched the "I Send New Year Goods to My Hometown" campaign on January 6, inviting users nationwide to send New Year goods to their hometowns and loved ones [1] - The campaign is supported by over 100 major brands and aims to deliver New Year goods to rural areas [1] - JD Logistics has prepared sufficient storage and transportation resources to ensure timely and safe delivery of goods [1] Key Initiatives - JD Group founder and chairman Richard Liu personally placed an order for New Year goods for 1,500 households in Guangming Village, Suqian, Jiangsu Province [1] - The goods include 34 types of products such as food, clothing, home appliances, and mobile phones, totaling over 50,000 items [1] - The goods are stored at JD Logistics' Suqian "Asia No 1" smart logistics park, the closest facility to the village [1] - Delivery of goods to Guangming Village began on January 8 and lasted for three days, with over 30 truck trips planned [1] Logistics Operations - JD Logistics announced its 13th consecutive year of "delivery during Spring Festival" service [3] - The company will provide uninterrupted delivery services across the country, including remote areas like Tibet, Heilongjiang, Xinjiang, and Hainan, even on the first day of the Lunar New Year [3] - To handle the peak logistics demand during the New Year shopping season, JD Logistics has integrated various infrastructure and transportation resources, leveraging digital technologies to enhance its supply chain logistics services [5] Consumer Participation - Consumers can participate in the "I Send New Year Goods to My Hometown" campaign through the JD app from January 6 to February 12 [4] - Purchases of designated products will be accompanied by JD Logistics' delivery of gifts and heartfelt messages [5]

Investment Rating - The report maintains a **Buy** rating for JD Logistics (2618 HK) with a target price of HKD 18.00, implying a potential upside of 42.0% [1][4] Core Views - JD Logistics' Q4 2024 revenue is expected to grow by 8.6% YoY to RMB 51.25 billion, driven by increased market share capture and prior investments in shipping and air routes [2][7] - Adjusted net profit for Q4 2024 is forecasted to increase by 10% YoY to RMB 2.0 billion, surpassing market expectations of RMB 1.7 billion, with an adjusted net profit margin of 3.9% [7] - Full-year 2024 revenue is projected to grow by 9% YoY, with an adjusted net profit margin of 4.2%, in line with company guidance of 3-4% [2][7] - The company's prior investments are expected to continue driving revenue growth in 2025, with further efficiency improvements and the ongoing integration of Taobao contributing to incremental gains [2] Financial Forecasts Revenue and Profitability - 2024E revenue is revised upward by 0.6% to RMB 181.99 billion, with 2025E and 2026E revenues forecasted at RMB 194.62 billion and RMB 208.22 billion, respectively [3] - Adjusted net profit for 2024E is revised downward by 3.1% to RMB 7.67 billion, with 2025E and 2026E adjusted net profits projected at RMB 7.91 billion and RMB 8.48 billion, respectively [3] - Gross margin for 2024E is expected to be 10.6%, with adjusted net profit margins of 4.2% for 2024E and 4.1% for both 2025E and 2026E [3][7] Segment Performance - External customer revenue is expected to grow by 1.6% in 2024E to RMB 95.28 billion, driven by strong performance in other external customer segments [3] - External integrated supply chain revenue is forecasted to decline by 1.1% in 2024E to RMB 31.99 billion, reflecting a slight slowdown in this segment [3] Key Financial Metrics - Non-GAAP adjusted EPS for 2024E is projected at RMB 1.212, increasing to RMB 1.241 in 2025E and RMB 1.320 in 2026E [17] - ROE is expected to improve significantly, reaching 29.8% in 2024E, 28.1% in 2025E, and 25.6% in 2026E, reflecting strong profitability and operational efficiency [18] Industry and Peer Comparison - JD Logistics is part of the logistics sector, with peers including SF Express (9699 HK) and Dada Group (DADA US), both of which also hold Buy ratings [12] - The logistics sector is expected to benefit from continued e-commerce growth and supply chain optimization, with JD Logistics well-positioned to capitalize on these trends [2][12]

Investment Rating - The report gives a "Buy" rating to the company, with a target PE multiple of 13x for 2024, indicating a 26% upside potential [157][158] Core Views - The company has successfully transitioned from an enterprise logistics provider to a logistics enterprise, leveraging its unique business model of integrating commerce and logistics [157] - The company's external business expansion has achieved remarkable results, with external customer revenue maintaining high growth trends [1] - The company's one-stop supply chain services are expected to have broad prospects in the future, especially in the non-integrated retail brand owner warehousing and logistics market [7] External Revenue Growth - The company's external revenue has been growing rapidly, with a CAGR of 70%-80% from 2019 to 2021, and maintaining high growth thereafter [1] - The proportion of external revenue has been continuously increasing, indicating significant success in external customer expansion [1] Cost Structure and Efficiency - The company's cost-to-revenue ratio has been declining overall since 2023, with a quarterly cost-to-revenue ratio of 88.3% in Q3 2023, down 3.9pct year-on-year [3] - The company's warehouse efficiency and capacity utilization have improved, driving significant revenue growth [16] Industry and Market Analysis - The retail logistics market is vast, with the total retail sales of consumer goods expected to maintain a 5% CAGR from 2024 to 2030 [8] - The company has proposed industry-specific solutions based on different industries, optimizing management through digital tools [7] Competitive Advantages - The company's high-quality service has led to strong brand recognition, with 90% of JD Group's online retail orders achieving same-day or next-day delivery [22] - The company's unique competitive barriers come from three aspects: strong infrastructure layout, advanced data and technology accumulation, and a unique ecosystem [30] Future Prospects - The company's new businesses, including cold chain, cross-border, express, and large-item logistics, are in the initial stages but have clear layouts [76] - The company's adjusted net profit is expected to reach 7.9 billion yuan in 2024, with a net profit margin of over 4%, potentially reaching 5%-6% in the long term [168]

Investment Rating - The report maintains a "Buy" rating for the company [2][4]. Core Views - JD Logistics is acquiring the remaining 36.43% stake in Kuaijie Express for no more than RMB 6.484 billion, resulting in full ownership of Kuaijie Express. The acquisition will be paid in three installments, consisting of a base price and profit-sharing payments [2][8]. - The acquisition is expected to enhance synergies and support international business development, with anticipated benefits including growth in Kuaijie Express's performance, deeper brand collaboration, and improved management efficiency [3][9]. Financial Summary - Revenue projections for 2024-2026 are RMB 180.3 billion, RMB 196.0 billion, and RMB 211.2 billion, with growth rates of 8.2%, 8.7%, and 7.8% respectively [4][10]. - Adjusted net profit estimates for the same period are RMB 7.26 billion, RMB 7.95 billion, and RMB 8.79 billion, with adjusted net profit margins of 4.0%, 4.1%, and 4.2% [4][10]. - The company expects Kuaijie Express's net profit to reach RMB 2.149 billion and RMB 2.351 billion in 2024 and 2025, respectively, reflecting a year-on-year growth of 9.4% [2][8]. Performance Metrics - The report indicates that Kuaijie Express's net profit for 2022 and 2023 was RMB 0.848 billion and RMB 1.447 billion, respectively, with a year-on-year growth of 70.6% in 2023 [3][9]. - The base profit for the acquisition is calculated at a 15x PE ratio, with base profits projected at RMB 0.83 billion for 2023, RMB 0.892 billion for 2024, and RMB 0.959 billion for 2025 [2][8]. Market Data - As of December 10, 2024, the closing price of the stock is HKD 14.5, with a total market capitalization of HKD 96.1 billion [6]. - The total share capital is 6.627 billion shares, and the net assets attributable to shareholders amount to RMB 50.8 billion [6].

Investment Rating - The report maintains an **Outperform** rating for JD Logistics (2618 HK) with a target price of **HKD 23.19**, revised from HKD 19.91, representing a 16% increase [3][10] Core Views - JD Logistics achieved **RMB 44.40 billion** in revenue in Q3 2024, a **6.6% YoY increase**, with **Non-IFRS net profit** reaching **RMB 2.60 billion**, up **205.1% YoY** [2][7] - The **Non-IFRS net profit margin** rose to **5.8%**, a **3.8 percentage point increase** from 2.0% in 2023 [2][7] - The company's **integrated supply chain business** contributed **RMB 20.70 billion**, a **5.4% YoY growth**, driven by increased revenue from JD Group and external clients [2][8] - External integrated supply chain clients reached **57,900**, a **9% YoY increase**, with **average revenue per client** at **RMB 133,000** [2][8] - Revenue from other clients grew **7.6% YoY** to **RMB 23.70 billion**, primarily due to increased parcel volume in express delivery and freight business [2][8] Financial Performance - **Gross profit margin** improved to **11.7%**, a **7.9 percentage point increase** from Q3 2023, driven by product and network optimization, technology-driven efficiency, and refined resource management [3][9] - **Operating costs** were **RMB 39.20 billion**, up **2.2% YoY**, reflecting effective cost control measures [3][9] Profit Forecast and Valuation - Total revenue for 2024 is projected to reach **RMB 178.91 billion**, a **7.4% YoY increase**, with a **Non-IFRS net profit margin** of **4.3%** [3][10] - The company's valuation method shifted from **PS to PE** as it entered a stable profit phase, with **Non-IFRS net profit** expected to be **RMB 7.77 billion** in 2024 and **RMB 9.45 billion** in 2025 [3][10] - The current market capitalization implies a **2024/2025 valuation** of **11X/9X**, with a reasonable valuation range of **15X**, corresponding to the target price of **HKD 23.19** [3][10]

Investment Rating - The report maintains a "Buy" rating for the company, citing its potential for revenue growth and profitability improvements [2][7] Core Views - The company's revenue growth is driven by its integration with Taotian, which is expected to enhance customer ARPU and attract new clients [2][5] - Cost reduction measures have significantly improved profitability, with adjusted net profit increasing by 205.1% YoY in 2024Q3 [6] - The company is expected to achieve revenue of 180.3 billion, 196.0 billion, and 211.2 billion RMB in 2024, 2025, and 2026, respectively, with adjusted net profit margins of 4.0%, 4.1%, and 4.2% [7] Revenue Breakdown - In 2024Q3, the company's total revenue reached 44.4 billion RMB, a 6.6% YoY increase [5] - Integrated supply chain revenue was 20.7 billion RMB, with internal revenue from JD Group growing 8.1% YoY to 12.79 billion RMB, while external revenue was 7.87 billion RMB, with customer numbers up 9.4% but ARPU down 7.4% [5] - Other customer revenue grew 7.6% YoY to 23.7 billion RMB, supported by improved service capabilities and expanded air routes [5] Cost Efficiency - In 2024Q3, employee benefits, outsourcing costs, rental costs, depreciation, and other operating costs were 14.6 billion, 15.0 billion, 3.1 billion, 1.1 billion, and 5.4 billion RMB, respectively, with changes of +4.8%, +2.7%, 0.0%, +10.0%, and -5.3% YoY [6] - Gross margin improved to 11.7%, up 3.8 percentage points YoY, driven by automation, optimized vehicle scheduling, and network structure improvements [6] Future Outlook - The company plans to enhance service quality by increasing transportation routes and frontline staff, while exploring opportunities in industrial belts [7] - Integration with Taotian is expected to provide a new revenue stream, contributing to future growth [7]

Investment Rating - The report assigns a "Buy" rating to JD Logistics (2618 HK) with a target price of HK$20.67, representing a 39% upside from the current price of HK$14.88 [2][3] - The target price has been revised upward by 17% from the previous target of HK$17.68 [5] Core Views - JD Logistics demonstrated strong profitability in 3Q24, with non-IFRS net profit margin increasing to 5.2% from 1.3% in 3Q23, driven by efficiency improvements despite a challenging macroeconomic environment [10] - The company's adjusted net profit surged 313% YoY in 3Q24, supported by robust margin expansion, particularly in gross margin [10] - Access to Tmall/Taobao merchants and overseas expansion are identified as two key long-term growth drivers [9][11] - JD Logistics plans to double its self-operated warehousing space for international business by 2025, with a focus on the Asia-Pacific region [11] Financial Performance - Revenue grew 6.6% YoY in 3Q24, with revenue from JD Group and third-party channels increasing by 8.1% and 5.9% respectively [11] - Gross margin improved to 10.6% in 2024E, up from 7.6% in 2023A, reflecting the company's efficiency initiatives [13][20] - Adjusted EPS for 2024E/2025E/2026E has been revised upward by 36.2%/24.4%/20.4% to RMB 0.93/1.07/1.19 [5][20] - The company's adjusted net profit margin is expected to reach 3.3% in 2024E, up from 2.4% previously forecasted [20] Valuation - The target price of HK$20.67 is based on a DCF model with a WACC of 12.1% and a perpetual growth rate of 2.0% [21][22] - JD Logistics is currently trading at a 28.0% discount to the revised target price, with a 2024E P/E of 14.6x and 2025E P/E of 12.6x [21] Industry Outlook - The logistics industry remains highly competitive, but JD Logistics is well-positioned to benefit from its access to Tmall/Taobao platforms, which is expected to drive long-term revenue growth [11] - The company's international business, though relatively small, is expected to contribute to long-term revenue growth with manageable capital expenditure [11]