Investment Rating - The investment rating for the company is Neutral [11]. Core Insights - The company's Q1 2024 performance exceeded expectations with revenue of 42.1 billion RMB, a year-on-year increase of 15%, surpassing market expectations by 4% [6][9]. - The external integration revenue grew by 5%, with a customer base of 56,000, indicating a recovery in growth [6][9]. - The adjusted net profit reached 663 million RMB, marking the first profitable Q1 since its listing, driven by business structure optimization and improved operational efficiency [6][9]. Summary by Sections Q1 2024 Performance - Total revenue was 42.1 billion RMB, up 15% year-on-year, with external revenue accounting for 69% [6][9]. - Internal orders accelerated with a growth rate of 15%, benefiting from the growth of JD Retail and lowered free shipping thresholds [6][9]. - Gross margin improved by 3 percentage points to 7.7% due to customer structure adjustments and scale effects [6][9]. Outlook and Valuation - Management maintains guidance for high single-digit revenue growth and an adjusted net profit margin of 1.7%-2% for the year [6][9]. - The adjusted net profit forecast for 2024 has been raised by 8% to 2.2% net profit margin, with expectations for better performance than the upper guidance limit [6][9]. - The target price has been adjusted from 9.5 HKD to 10.1 HKD based on a 15x P/E ratio for 2024 [6][11].

Revenue Growth - Revenue increased by 14.7% to RMB 42.14 billion in Q1 2024 compared to RMB 36.73 billion in Q1 2023[2] - Integrated supply chain customer revenue rose by 11.1% to RMB 20.50 billion in Q1 2024 from RMB 18.45 billion in Q1 2023[5] - Other customer revenue increased by 18.4% to RMB 21.64 billion in Q1 2024 from RMB 18.28 billion in Q1 2023[6] - Revenue from JD Group accounted for 30.6% of total revenue at RMB 12.88 billion in Q1 2024, while revenue from other sources accounted for 69.4% at RMB 29.25 billion[7] Profitability and Margins - Gross profit surged by 97.5% to RMB 3.23 billion in Q1 2024 from RMB 1.64 billion in Q1 2023[2] - Non-IFRS EBITDA grew by 77.9% to RMB 3.65 billion in Q1 2024 compared to RMB 2.05 billion in Q1 2023[2] - Gross profit and gross margin improved to RMB 3.2 billion and 7.7% in Q1 2024, compared to RMB 1.6 billion and 4.5% in Q1 2023, due to business optimization and economies of scale[9] - Non-IFRS EBITDA for Q1 2024 was RMB 3.650 billion, with a non-IFRS EBITDA margin of 8.7%, compared to RMB 2.051 billion and 5.6% in Q1 2023[15] Customer Metrics - The number of external integrated supply chain customers grew to 55,760 in Q1 2024 from 54,465 in Q1 2023[5] - Average revenue per integrated supply chain customer increased to RMB 136,636 in Q1 2024 from RMB 132,894 in Q1 2023[5] Operational Costs and Expenses - Operating costs increased by 10.9% from RMB 35.1 billion in Q1 2023 to RMB 38.9 billion in Q1 2024, driven by business growth[8] - Employee compensation and benefits for operational staff rose by 16.8% from RMB 12.6 billion in Q1 2023 to RMB 14.8 billion in Q1 2024, due to an increase in the number of operational employees[8] - Outsourcing costs increased by 8.2% from RMB 13.4 billion in Q1 2023 to RMB 14.5 billion in Q1 2024, driven by higher demand for outsourcing services[8] - Sales and marketing expenses increased by 23.6% from RMB 1.1 billion in Q1 2023 to RMB 1.4 billion in Q1 2024, driven by an increase in sales and marketing personnel[10] - R&D expenses decreased by 4.6% from RMB 903.8 million in Q1 2023 to RMB 862.5 million in Q1 2024, due to efficiency improvements and cost control measures[11] Net Profit and Non-IFRS Metrics - The company recorded a net profit of RMB 322.3 million in Q1 2024, compared to a net loss of RMB 1.0368 billion in Q1 2023[13] - Non-IFRS profit for Q1 2024 was RMB 662.651 million, compared to a non-IFRS loss of RMB 711.544 million in Q1 2023[14] Cash Resources and Free Cash Flow - The company's total cash resources amounted to RMB 42.5 billion as of March 31, 2024, with a free cash outflow of RMB 300 million in Q1 2024, compared to RMB 800 million in Q1 2023[16] Board of Directors - The Board of Directors includes Executive Director Mr. Hu Wei, Non-Executive Director Mr. Liu Qiangdong, and Independent Non-Executive Directors Ms. Gu Yi, Ms. Yu Yaying, Mr. Wang Liming, Dr. Zhao Xiande, and Mr. Zhang Yang[17] Logistics and Infrastructure - JD Logistics' warehouse network covered nearly all counties in China, with over 1,600 self-operated warehouses and 2,000 cloud warehouses, totaling over 32 million square meters of managed area[3] Human Resources Expenditure - Total human resources expenditure reached RMB 84.3 billion over the past 12 months as of March 31, 2024[3]

Financial Performance - Revenue for 2023 reached RMB 166,624.71 million, a 21.3% increase from RMB 137,402.01 million in 2022[5] - Gross profit for 2023 was RMB 12,683.16 million, up 25.6% from RMB 10,099.64 million in 2022[5] - Net profit for 2023 was RMB 1,167.20 million, compared to a net loss of RMB 1,090.29 million in 2022[5] - Non-IFRS profit for 2023 was RMB 2,760.84 million, a significant increase from RMB 866.03 million in 2022[5] - Revenue increased by 21.3% from RMB 137.4 billion in 2022 to RMB 166.6 billion in 2023[37] - Revenue from integrated supply chain customers grew by 5.2% from RMB 77.4 billion in 2022 to RMB 81.5 billion in 2023[37] - Revenue from other customers surged by 42.0% from RMB 60.0 billion in 2022 to RMB 85.2 billion in 2023[38] - The average revenue per integrated supply chain customer increased by 15.2% from RMB 365,015 in 2022 to RMB 420,363 in 2023[37] - The company's non-IFRS EBITDA increased from RMB 10.99 billion in 2022 to RMB 14.61 billion in 2023[35] - The company's non-IFRS profit rose from RMB 866 million in 2022 to RMB 2.76 billion in 2023[35] - Gross profit and gross margin improved to RMB 12.7 billion and 7.6% in 2023, up from RMB 10.1 billion and 7.4% in 2022, due to optimized business and customer structure and economies of scale[41] - Net profit for 2023 was RMB 1.2 billion, a significant turnaround from a net loss of RMB 1.1 billion in 2022[46] - Non-IFRS profit for 2023 was RMB 2.76 billion, with a non-IFRS profit margin of 1.7%, compared to RMB 866 million and 0.6% in 2022[48] - Other net income for 2023 was RMB 858.7 million, a reversal from a loss of RMB 571.7 million in 2022, driven by increased government subsidies and financial income[45] - The company's non-IFRS EBITDA for 2023 was RMB 14,605,753 thousand, with a profit margin of 8.8%[50] Assets and Liabilities - Total assets for 2023 increased to RMB 112,901.72 million from RMB 106,697.27 million in 2022[6] - Non-current assets for 2023 grew to RMB 56,243.30 million, up from RMB 49,093.11 million in 2022[6] - Current liabilities for 2023 rose to RMB 39,331.40 million from RMB 34,246.23 million in 2022[6] - Equity attributable to owners of the company for 2023 was RMB 48,157.92 million, up from RMB 46,580.70 million in 2022[6] - Total cash resources as of December 31, 2023, amounted to RMB 42.2 billion[51] - Net cash generated from operating activities in 2023 was RMB 16,352,016 thousand[52] - Free cash inflow for 2023 was RMB 2.8 billion, compared to RMB 1.3 billion in 2022[53] - Net cash used in investing activities in 2023 was RMB 15,099,215 thousand[55] - Net cash used in financing activities in 2023 was RMB 5,546,825 thousand[56] - The capital-to-debt ratio as of December 31, 2023, was approximately 20.7%[57] - The company's outstanding borrowings as of December 31, 2023, amounted to RMB 10 billion[90] - Restricted cash pledged as collateral amounted to RMB 194.0 million as of December 31, 2023[62] Logistics and Operations - JD Logistics' total revenue in 2023 reached RMB 166.6 billion, a year-on-year increase of 21.3%[7][10] - Revenue from external customers in 2023 was RMB 116.6 billion, accounting for 70.0% of total revenue, with a year-on-year growth of 30.8%[7][10] - External integrated supply chain customer revenue in 2023 was RMB 31.4 billion, a year-on-year increase of 7.7%[10] - The number of external integrated supply chain customers with annual revenue contribution of at least RMB 10 million reached 384, a year-on-year increase of 6.1%[10] - The average revenue per external integrated supply chain customer was RMB 45.9 million, a year-on-year increase of 8.8%[10] - JD Logistics operates over 1,600 warehouses and more than 19,000 delivery stations as of December 31, 2023[11] - The company employs nearly 350,000 self-operated delivery and operational personnel as of December 31, 2023[11] - JD Logistics has nearly 4,600 professional R&D personnel as of December 31, 2023[11] - The company continues to integrate its network with Deppon Logistics to enhance its comprehensive logistics network[11] - JD Logistics' warehouse automation solutions have been adopted by external clients in industries such as automotive parts, apparel, and pharmaceuticals[7] - Revenue from integrated supply chain customers reached RMB 81.5 billion in 2023, with external integrated supply chain customer revenue at RMB 31.4 billion, a year-on-year increase of 7.7%[12] - The number of external integrated supply chain customers served reached 74,714, with average revenue per customer increasing by 15.2% to RMB 420,000[12] - Revenue from external integrated supply chain customers contributing at least RMB 10 million annually increased to RMB 17.624 billion, accounting for 56.1% of total external integrated supply chain customer revenue[14] - Revenue from external integrated supply chain customers contributing less than RMB 10 million annually was RMB 13.783 billion, accounting for 43.9% of total external integrated supply chain customer revenue[15] - Revenue from other customers grew by 42.0% year-on-year to RMB 85.2 billion in 2023[18] - The company completed the transfer of assets from 83 JD Logistics freight forwarding centers to Deppon Logistics by the end of December 2023[19] - JD Logistics launched a "next morning delivery" service in December 2023, covering 9 cities including Beijing and Shanghai[19] - The company deepened its cooperation with a Chinese tech company in Europe, optimizing inventory allocation for faster delivery in core European countries and regions[17] - JD Logistics expanded its cooperation with Douyin and Kuaishou, providing high-quality logistics services during Kuaishou's Double 11 shopping festival[19] - The company provided exclusive nationwide home charging pile supply chain services for a renowned international new energy vehicle brand in the second half of 2023[16] - The company's warehousing network covers nearly all counties in China, with over 1,600 self-operated warehouses and 2,000 cloud warehouses, totaling over 32 million square meters[23] - The company operates 41 Asia No. 1 smart industrial parks in 30 cities, with the Kunshan Asia No. 1 facility handling over 4.5 million packages daily during the 618 promotion[23] - The company's self-owned transportation fleet exceeds 40,000 vehicles, with over 600 railway routes and more than 1,000 air cargo routes covered through partnerships[25] - The company operates 6 self-owned cargo aircraft, covering domestic and international routes, including 4 international cargo routes opened in 2023[25] - The company has nearly 350,000 self-owned delivery personnel and operates over 19,000 delivery stations and outlets, covering 300+ cities across 33 provinces[26] - The company manages over 200 large-item warehouses and sorting centers, with a total area exceeding 4 million square meters[27] - The company operates approximately 100 cold chain warehouses for fresh and frozen food, covering 500,000 square meters, and over 30 specialized warehouses for pharmaceuticals and medical devices, covering 300,000 square meters[29] - The company has deployed over 1,800 large-item delivery and installation stations under the "Jingdong Bang" brand to expand coverage in lower-tier cities[28] - The company's logistics technology includes high-density storage systems, automated guided vehicles, and intelligent delivery vehicles, enhancing automation across the supply chain[20] - The company operates nearly 90 bonded warehouses, direct mail warehouses, and overseas warehouses, with a total managed area of nearly 900,000 square meters[30] - The company deployed dozens of hydrogen-powered heavy-duty logistics trucks in 2023, becoming the first logistics enterprise to scale the use of hydrogen-powered trucks[32] Costs and Expenses - Operating costs increased by 20.9% from RMB 127.3 billion in 2022 to RMB 153.9 billion in 2023, driven by business growth and the full-year consolidation of Deppon Logistics[40] - Employee compensation and benefits for operational staff rose by 23.9% from RMB 44.6 billion in 2022 to RMB 55.3 billion in 2023, partly due to increased headcount and the full-year consolidation of Deppon Logistics[40] - Outsourcing costs increased by 16.9% from RMB 51.6 billion in 2022 to RMB 60.3 billion in 2023, driven by higher demand for outsourcing services and the full-year consolidation of Deppon Logistics[40] - R&D expenses grew by 14.4% from RMB 3.1 billion in 2022 to RMB 3.6 billion in 2023, reflecting continued investment in technology and innovation[43] - The company's total human resources expenditure (including own employees and external personnel) reached RMB 22.8 billion for the three months ended December 31, 2023, and RMB 82.1 billion for the full year[32] - Employee compensation and benefits expenses, including share-based payments, reached RMB 62.2 billion in 2023, a 22.3% increase from RMB 50.8 billion in 2022[60] Technology and Innovation - The company has obtained over 4,000 authorized patents and software, with more than 2,000 related to automation and unmanned technologies[21] - The company's logistics technology includes high-density storage systems, automated guided vehicles, and intelligent delivery vehicles, enhancing automation across the supply chain[20] - The company deployed dozens of hydrogen-powered heavy-duty logistics trucks in 2023, becoming the first logistics enterprise to scale the use of hydrogen-powered trucks[32] - R&D expenses grew by 14.4% from RMB 3.1 billion in 2022 to RMB 3.6 billion in 2023, reflecting continued investment in technology and innovation[43] Human Resources - The company employs nearly 350,000 self-operated delivery and operational personnel as of December 31, 2023[11] - JD Logistics has nearly 4,600 professional R&D personnel as of December 31, 2023[11] - Total number of employees as of December 31, 2023, is 457,015, with operations staff accounting for 95.4% (436,208 employees)[60] - Employee distribution by function: Sales and Marketing (10,011 employees, 2.2%), R&D (4,553 employees, 1.0%), General and Administrative (6,243 employees, 1.4%)[60] - The company implements pre-IPO and post-IPO employee equity incentive plans, share option plans, and share award plans[60] - Employee compensation and benefits expenses, including share-based payments, reached RMB 62.2 billion in 2023, a 22.3% increase from RMB 50.8 billion in 2022[60] - The company participates in mandatory social security programs in China, including pension, medical, unemployment, maternity, work injury insurance, and housing provident fund[60] Corporate Governance and Leadership - Hu Wei, aged 41, was appointed as Executive Director and CEO on June 26, 2023[63] - Liu Qiangdong, aged 51, serves as Chairman and Non-Executive Director, having been re-appointed on October 15, 2020[63] - Wu Hao, aged 37, was appointed as the Chief Financial Officer on May 11, 2023, overseeing the company's finance and investments[70] - Wu Hao joined JD Group in May 2014, holding positions such as Group Internal Control Director, Risk Control Director, and Head of the Audit Department[70] - Wu Hao holds a Bachelor's degree in Management from China University of Geosciences and an MBA from Peking University's Guanghua School of Management[70] - Zhao Mingjing serves as the Company Secretary and has over 10 years of experience in the company secretarial industry[71] - Zhao Mingjing holds a Bachelor of Arts degree from the University of Toronto and a Master of Arts in Professional Accounting and Information Systems from City University of Hong Kong[71] - Zhao Mingjing is a Fellow and Senior Member of the Chartered Governance Institute and the Hong Kong Chartered Governance Institute[71] - The Board consists of executive directors, non-executive directors, and independent non-executive directors, with Liu Qiangdong serving as Chairman[196] - Hu Wei was appointed as an executive director effective June 26, 2023, while Yu Rui resigned as an executive director on the same date[197] - The Chairman, Liu Qiangdong, is responsible for the effective operation and leadership of the Board, while the CEO oversees business development and daily operations[198] - The Board has complied with the Listing Rules by appointing at least three independent non-executive directors, constituting one-third of the Board[199] - Non-executive directors and independent non-executive directors have initial terms of three years, subject to retirement and re-election[200] - All directors confirmed strict compliance with the insider trading policy during the reporting period[195] - The company has adopted and complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules[194] Shareholding and Equity - Liu Qiangdong holds approximately 64.94% of the company's shares through beneficial ownership and controlled entities[101] - Liu Qiangdong holds 340,405,330 shares of JD.com, representing 10.8% beneficial ownership and 69.9% of total voting rights[105] - Liu Qiangdong has a 68.51% beneficial ownership in JD Health through controlled entities, holding 2,184,655,829 shares[108] - Liu Qiangdong fully controls China Logistics Assets with 3,474,283,058 shares, representing 100% ownership[108] - JD.com has issued a total of 3,144,236,167 shares of common stock as of December 31, 2023[104] - Fortune Rising Holdings Limited holds 17,581,344 B-class shares of JD.com, managed under the company's equity incentive plan[106] - Hu Wei holds 48,360 shares of JD.com, representing 0.00% beneficial ownership[108] - Zhao Xiande holds 661 shares of JD.com, representing 0.00% beneficial ownership[108] - JD Jiankang Limited, a wholly-owned subsidiary of JD.com, holds 2,149,253,732 shares of JD Health[109] - JD Property Development holds 74.96% of China Logistics Assets as of December 31, 2023[109] - Jingdong Technology Group Corporation holds 4,192,271,100 shares, representing 63.44% of the total issued shares[111] - TCT (BVI) Limited and 匯聚信託有限公司 each hold 508,143,522 shares, representing 7.69% of the total issued shares[111] - 50,870,208 new shares were issued or may be issued under the post-IPO share option plan and post-IPO share award plan, representing approximately 0.77% of the weighted average number of issued shares[114] - The maximum number of new shares that may be issued under the pre-IPO employee equity incentive plan is 598,847,916 shares[117] - As of the reporting date, 127,111,887 unexercised share options were granted under the pre-IPO employee equity incentive plan, representing approximately 1.92% of the issued share capital[117] - Total equity incentives granted to directors and other grantees amounted to 161,490,066 shares[122] - The maximum number of shares available for issuance under the post-IPO share option plan is 609,160,767, representing 9.20% of the issued share capital[126] - The post-IPO share option plan has a remaining term of over 7 years, effective until May 28, 2031[128] - The exercise price for the post-IPO share option plan cannot be lower than the higher of the closing price on the grant date or the average closing price of the five trading days preceding the grant date[130] - The total equity incentives granted to the five highest-paid individuals during the reporting period amounted to 6,828,667 shares[122] - The maximum number of reward shares that can be granted under the post-IPO share reward plan is 609,160,767 shares, limited to 3% of the total issued shares during the relevant period[136] - As of December 31, 2023, 519,696,156 reward shares are available for grant under the post-IPO share reward plan[137] - The total number of new shares that can be issued under the post-IPO share reward plan is capped at 609,160,767 shares, representing 10% of the post-listing issued share capital[138] - As of December 31, 2023, 280,860,767 new shares are available for issuance under the post-IPO share reward plan, representing approximately 4.24% of the issued share capital[138] - During the reporting period, 55,937,435 reward shares were granted to eligible participants under the post-IPO share reward plan[137] - The post-IPO share reward plan will remain effective for a 10-year period from the listing date until May 28, 2031, with approximately 7 years remaining[141] - The fair value of the reward shares granted during the reporting period was determined based on the market value of the shares on

Core Viewpoint - CICC maintains a "outperform" rating for JD Logistics (02618), adjusting the non-IFRS net profit forecast for this year upwards by 25% to RMB 3.574 billion, while lowering next year's forecast by 5% to RMB 4.324 billion, with a target price of HKD 11 [1] Group 1 - JD Logistics is expected to achieve first-quarter revenue of RMB 40 billion, a year-on-year increase of 9%, primarily benefiting from the growth in order volume from JD Retail platform [1] - The company is projected to report an adjusted net profit of RMB 80 million for the first quarter, marking its first positive quarterly result since disclosing quarterly data, with an adjusted net profit margin estimated at 0.2% [1] - CICC believes that revenue from JD Group and third-party merchants will continue to grow, with the first-quarter order volume growth rate for JD Logistics expected to maintain the year-on-year improvement seen in the previous quarter, forecasting a mid-to-high single-digit growth for the full year [1]

Investment Rating - The report assigns an "Outperform" rating for the company, indicating an expected total return performance exceeding the benchmark index by more than 10% over the next 12 months [7]. Core Insights - The company has shown significant growth in revenue and profit margins, with total revenue for 2023 increasing by 21.3% year-on-year to CNY 166.6 billion, and adjusted net profit soaring by 218.8% to CNY 27.6 billion [2][4]. - The company is focusing on optimizing its customer and business structure, with revenue from external customers rising from 64.9% in 2022 to 70.0% in 2023, indicating increased customer stickiness [2]. - The integration of technology and operational efficiency has led to a 42.0% year-on-year increase in revenue from other clients, reaching CNY 85.2 billion in 2023 [1]. Financial Summary - For FY 2023, the company reported total revenue of CNY 166.6 billion, with a gross profit of CNY 12.7 billion and an EBITDA of CNY 14.1 billion [3][4]. - The adjusted net profit for 2023 was CNY 2.76 billion, with a significant increase in the adjusted net profit margin from 0.6% in 2022 to 1.7% in 2023 [2][4]. - The forecast for FY 2024 anticipates revenue growth to CNY 178.9 billion, with an expected adjusted net profit of CNY 3.18 billion [3][4]. Operational Metrics - The company has improved its operational efficiency, with the adjusted net profit margin increasing significantly, and the average revenue per external integrated supply chain customer rising by 15.2% to CNY 420,000 [2]. - The company’s cash flow from operating activities for 2023 was CNY 16.4 billion, reflecting strong operational performance [6]. Market Position - The company is leveraging its technological advancements and network integration with partners like De Bang Logistics to enhance service quality and customer satisfaction [1]. - The report highlights the company's strategic focus on cost reduction and efficiency improvements, which are expected to drive future profitability [2].

Investment Rating - The report maintains an "Outperform" rating for JD Logistics [3][7]. Core Views - JD Logistics reported a significant improvement in profitability, with Q4 2023 earnings exceeding expectations. The company recorded a revenue of RMB 47.2 billion, representing a year-on-year increase of 9.7%, and a Non-IFRS net profit of RMB 1.804 billion, up 79.6% year-on-year [4][7]. - The forecast for 2024 anticipates total revenue to reach RMB 180.98 billion, reflecting an 8.6% year-on-year growth, with external revenue projected to grow at a compound annual growth rate (CAGR) of 16.8% from 2022 to 2026 [4][7]. Financial Performance Summary - In 2023, JD Logistics achieved a total revenue of RMB 166.625 billion, a 21.3% increase from the previous year, and a Non-IFRS net profit of RMB 2.761 billion, up 218.8% [4][6]. - For Q4 2023, the company’s revenue from integrated supply chain customers was RMB 23 billion, an increase of 8.8%, driven by higher income from JD Group and a 15.4% rise in average revenue per customer (ARPC) [4][6]. - The gross margin for Q4 2023 was reported at 9.2%, an increase of 0.3 percentage points from Q4 2022, attributed to optimized business and customer structure and economies of scale [4][6]. Earnings Forecast - The report projects that JD Logistics will achieve a Non-IFRS net profit of RMB 3.253 billion in 2024, corresponding to a net margin of 1.8% [6][7]. - The expected earnings per share (EPS) for 2024 is RMB 0.49, with a forecasted growth in net profit of 17.8% for the same year [6][7]. Valuation and Target Price - The target price for JD Logistics is maintained at HKD 16, based on a price-to-sales (P/S) ratio of 0.5 for 2024 [4][7].

Investment Rating - The report maintains a "Buy" rating for JD Logistics (02618.HK) with a target price of HKD 11.7, compared to the current price of HKD 8.04 [1]. Core Insights - JD Logistics achieved profitability in 2023, with a significant revenue increase of 21.3% year-on-year, reaching CNY 166.6 billion. The net profit attributable to shareholders was CNY 2.76 billion, a 70% increase year-on-year [1][4]. - The company has expanded its external customer base, with external customer revenue rising to CNY 11.66 billion, marking a 30.8% year-on-year growth. The number of integrated supply chain customers reached 1166, indicating a strong market presence [1][4]. - The report highlights the company's strategic focus on integrated supply chain services, particularly in overseas markets, which is expected to drive future growth [1][4]. Financial Performance Summary - **Revenue**: In 2023, JD Logistics reported a total revenue of CNY 166.6 billion, up 21.3% from the previous year [1][4]. - **Net Profit**: The net profit attributable to shareholders was CNY 2.76 billion, reflecting a 70% increase year-on-year [1][4]. - **Gross Margin**: The gross margin improved to 7.6%, an increase of 0.3 percentage points compared to the previous year [1][4]. - **Cost Structure**: Operating costs were well-aligned with revenue growth, with a slight increase in the cost-to-revenue ratio, indicating effective cost management [1][4]. Customer Base and Market Expansion - **External Customers**: The number of external customers increased to 1166, with a focus on high-quality clients such as Panasonic China [1][4]. - **Integrated Supply Chain Services**: Revenue from integrated supply chain services reached CNY 50.1 billion, a 314% increase year-on-year, showcasing the company's strong service capabilities [1][4]. - **Overseas Expansion**: The report emphasizes the company's ongoing efforts to expand its services internationally, particularly in cross-border logistics, which is expected to enhance its competitive edge [1][4].

Investment Rating - The report maintains a "Recommended" rating for JD Logistics (02618.HK) [1][3] Core Views - JD Logistics achieved profitability in 2023, with a total revenue of 166.6 billion yuan, representing a year-on-year growth of 21.3%. The net profit attributable to shareholders was 6.2 billion yuan, marking a turnaround from losses in 2022. Adjusted net profit reached 27.6 billion yuan, up 218.8% year-on-year, with an adjusted net profit margin of 1.7%, an increase of 1 percentage point [1][9][10]. Summary by Sections Financial Performance - In 2023, JD Logistics reported a gross margin of 7.6%, an increase of 0.3 percentage points year-on-year. The operating expense ratio was 7.2%, down 0.3 percentage points. Labor costs accounted for 33.2% of revenue, up 0.7 percentage points, while outsourcing costs decreased to 36.2%, down 1.4 percentage points [1][7][10]. Revenue Breakdown - Revenue from external customers reached 116.6 billion yuan, a year-on-year increase of 30.8%, accounting for 70% of total revenue. The integrated supply chain revenue from external customers was 31.4 billion yuan, up 7.6% year-on-year, with the average revenue per customer increasing to 420,363 yuan, a rise of 15.2% [1][7][10]. Future Outlook - The company plans to further develop in areas such as the JD ecosystem, digitalization, collaboration with Deppon, and overseas expansion. The integration with Deppon is expected to enhance logistics resources and operational capabilities, while overseas logistics services are anticipated to grow rapidly [1][9][10]. Investment Projections - The report conservatively adjusts the net profit forecasts for 2024 and 2025 to 970 million yuan and 1.3 billion yuan, respectively, with a new forecast for 2026 set at 1.65 billion yuan. The target market capitalization for 2023 is approximately 77.4 billion HKD, corresponding to a target price of 11.7 HKD per share, indicating a potential upside of 45% [1][9][10].

Investment Rating - Maintain "Overweight" rating [2][5] Core Views - The company's 2023Q4 revenue reached RMB 47.2 billion, a YoY increase of 9.7% [2][5] - Internal integrated supply chain revenue growth benefited from increased revenue from JD Retail, driven by the reduction in free shipping thresholds [2][5] - External integrated supply chain revenue growth was driven by service diversification and increased customer stickiness, with average customer spending rising by 15.4% YoY [2][5] - Other customer revenue growth was driven by increased express and freight business volumes, with future growth expected from increased penetration on platforms like Douyin, Kuaishou, and Xiaohongshu [2][5] - Adjusted net profit for 2023Q4 was RMB 1.804 billion, a YoY increase of 79.6%, with an adjusted net profit margin of 3.8%, up 1.5 percentage points YoY and 1.8 percentage points QoQ [2][5] - The company is expected to maintain high single-digit revenue growth in 2024, with adjusted net profit margins improving to the range of 1.7%-2.0% [2][5] Financial Projections - Revenue for 2024-2026 is projected to be RMB 181.4 billion, RMB 195.9 billion, and RMB 210.2 billion, with growth rates of 8.9%, 8.0%, and 7.3% respectively [2][5] - Adjusted net profit for 2024-2026 is projected to be RMB 3.352 billion, RMB 3.987 billion, and RMB 5.003 billion, with adjusted net profit margins of 1.8%, 2.0%, and 2.4% respectively [2][5] - Gross margin is expected to improve from 7.6% in 2023 to 9.9% in 2026 [1][5] - ROE is projected to increase from 2.1% in 2023 to 4.2% in 2026 [1][5] Market Data - Closing price on 2024/3/13 was HKD 8.32, with a total market capitalization of HKD 55.1 billion [2] - Total equity attributable to the parent company was RMB 6.8 billion, with total assets of RMB 15.9 billion [2] - EPS for 2023-2026 is projected to be RMB 0.10, RMB 0.20, RMB 0.27, and RMB 0.36 respectively [1][5]

Investment Rating - The investment rating for JD Logistics is maintained at "Buy" [1][8] Core Views - JD Logistics achieved a revenue of 166.625 billion RMB in 2023, representing a year-on-year growth of 21.27%, and successfully turned a profit with a net profit of 1.167 billion RMB compared to a net loss of 1.09 billion RMB in the previous year [2][5] - The company demonstrated improved self-sustainability with a net profit of 616 million RMB attributable to the parent company, marking a significant turnaround [3][5] - External revenue accounted for nearly 70% of total revenue, indicating strengthened customer acquisition capabilities [6][5] Summary by Sections Financial Performance - In Q4 2023, JD Logistics recorded a revenue of 47.2 billion RMB, a year-on-year increase of 9.75%, with a net profit of 1.242 billion RMB, up 152.46% [2][5] - The gross profit for 2023 was 12.683 billion RMB, reflecting a 25.58% increase, with a gross margin of 7.61%, an increase of 0.26 percentage points [5][6] Revenue Breakdown - Internal revenue from JD Group was 50.063 billion RMB, growing 3.73%, while external revenue reached 116.561 billion RMB, up 30.76% [6][5] - The number of customers contributing over 10 million RMB in revenue increased by 6.08% to 384, with average revenue per customer rising by 8.77% to 45.9 million RMB [6][5] Profitability Forecast - The forecast for 2024-2026 anticipates revenues of 183.974 billion RMB, 199.837 billion RMB, and 216.164 billion RMB, with net profits of 1.271 billion RMB, 1.937 billion RMB, and 2.802 billion RMB respectively [7][8] - The projected P/E ratios for 2024, 2025, and 2026 are 37.45, 24.57, and 16.98 respectively, indicating a positive outlook for profitability [7][8]