Core Viewpoint - JD Logistics plans to invest heavily in automation and technology over the next five years, aiming to enhance its logistics supply chain capabilities through the procurement of a significant number of robots, unmanned vehicles, and drones [1]. Group 1 - JD Logistics will purchase 3 million robots over the next five years [1] - The company plans to acquire 1 million unmanned vehicles during the same period [1] - Additionally, JD Logistics intends to procure 100,000 drones to support its logistics operations [1]

Core Insights - JD Logistics announced plans to procure 3 million robots, 1 million unmanned vehicles, and 100,000 drones over the next five years, aiming to fully invest in the logistics supply chain across all scenarios [1] Group 1 - The company is focusing on automation and advanced technology to enhance its logistics capabilities [1] - The significant scale of procurement indicates a strong commitment to improving operational efficiency and service delivery [1] - This investment aligns with industry trends towards increased automation in logistics and supply chain management [1]

Core Viewpoint - The report from JPMorgan highlights the transformation in China's express logistics industry as a model of the country's anti-involution policy, with significant changes in pricing rules, package volume growth, and competitive landscape observed in recent months [1] Industry Summary - The average price and package volume trends in September reflect the impact of regulatory intervention [1] - Preliminary data for "Double 11" indicates stable consumer participation, but extended promotional periods and changing subsidy strategies create new uncertainties [1] - Market reactions show a resurgence of investor interest in the industry, with a shift in preference order [1] Company Summary - For Q3, JPMorgan expects SF Express's profit to increase by 3% year-on-year to 2.9 billion RMB, indicating robust package volume and strict cost management despite a high base [1] - ZTO Express is shifting the industry competition focus from "volume-driven" to "profit-oriented" under the anti-involution policy [1] - JPMorgan's top picks are ZTO Express and SF Express, with ZTO rated "Overweight" and a target price of 187 HKD for Hong Kong stocks and 24 USD for US stocks; SF Express has target prices of 48 HKD for H-shares and 51 RMB for A-shares, both rated "Overweight" [1] - JD Logistics has a target price of 15 HKD and is also rated "Overweight" [1]

Core Viewpoint - The Hong Kong stock market's "Double Eleven" concept sector is experiencing a significant upward trend, driven by the upcoming 2025 "Double Eleven" shopping season, with notable gains in apparel and logistics stocks [2][3][7]. Apparel Sector - The apparel sector is leading the gains, with Bosideng (03998.HK) rising by 9.11%, Urban Revivo (02298.HK) increasing by 7.81%, and other brands like Uniqlo (06288.HK) and Li Ning (02331.HK) also showing positive performance [2][3]. - Seasonal demand for warm clothing is expected to rise due to the approaching autumn and winter, further boosting sales for brands focused on winter apparel [7]. E-commerce Sector - E-commerce companies are also benefiting, with Baozun E-commerce (09991.HK) up by 5.52% and Alibaba (09988.HK) increasing by 1.98% [2][3]. - Tmall's "Double Eleven" event has seen strong initial sales, with 80 brands exceeding 100 million yuan in sales within the first hour, indicating robust consumer interest [4][5]. Logistics Sector - Logistics stocks are performing well, with Aneng Logistics (09956.HK) surging by 10.47% and JD Logistics (02618.HK) up by 1.87% [2][3]. - The increase in e-commerce activity is expected to drive demand for logistics services, contributing to the positive performance of logistics companies [6]. Market Sentiment - The impressive sales data from the initial phase of the "Double Eleven" event has boosted market confidence in the related sectors, leading to a collective rise in apparel, e-commerce, and logistics stocks [6]. - Analysts suggest that the extended sales window due to the later Chinese New Year in 2026 will provide additional sales opportunities for companies in these sectors [7].

Core Insights - The logistics industry is preparing for the peak demand during the "Double 11" shopping festival, with significant increases in package volumes expected [1][2] - Companies are investing in automation and smart technologies to enhance efficiency and cope with the rising demand [4][7] Group 1: Peak Demand Preparation - The first peak of express delivery is anticipated from October 22 to 25, with some delivery points expecting package volumes to double compared to last year [1][2] - Last year's first peak saw delivery volumes at approximately 48,000 to 50,000 packages, which is expected to be matched this year [2] - Companies like JD Logistics, Shentong, and Jitu are enhancing their automation capabilities to compete on delivery speed [1] Group 2: Workforce and Resource Management - Delivery points are preparing by hiring temporary workers and increasing vehicle capacity, with some locations adding up to four delivery trucks [2][3] - The average daily delivery volume at some points is around 25,000 to 26,000 packages, with expectations to reach similar levels as last year [2] - Delivery personnel are required to start work earlier and finish later during the peak period to manage the increased workload [2][3] Group 3: Automation and Efficiency - Many delivery points are investing in automated equipment to improve operational efficiency, with some reporting a 30% increase in sorting efficiency [4][7] - Automation allows for reduced working hours for delivery personnel, with some able to finish their shifts earlier due to improved processes [4] - Companies are also exploring the use of unmanned vehicles to further reduce labor costs by 20% to 30% during peak times [4][5] Group 4: Industry Trends - The logistics industry is expected to continue evolving towards automation, unmanned operations, and specialization, raising the entry barriers for new players [8] - The total express delivery volume in China is projected to reach approximately 1.45 trillion packages this year, with revenues exceeding one trillion yuan [8] - By 2025, the total logistics volume is expected to surpass 590 billion tons, with express delivery volumes potentially exceeding 2 trillion packages [8]

Core Insights - JD Logistics is enhancing logistics solutions for Gannan navel oranges, aiming for efficient delivery from farm to consumer [1][3] - The logistics improvements are expected to reduce costs and increase delivery speed by over half a day [3][5] Group 1: Logistics Enhancements - JD Logistics is implementing a direct shipping model and smart distribution centers to optimize logistics for Gannan navel oranges [1][3] - The company has invested in four automated sorting centers and deployed sorting equipment to improve efficiency and pricing accuracy for farmers [3] - A dedicated sorting center for navel oranges will be established in Huichang to further enhance delivery speed [3] Group 2: Cost Reduction and Channel Expansion - JD Logistics is introducing e-commerce small item discounts to benefit farmers and merchants [5] - The shared warehouse service for Douyin (TikTok) will allow merchants to achieve next-day delivery and reduce logistics costs by 10% [5] - A comprehensive service mechanism will be established to address issues within 10 minutes, ensuring smooth operations during peak seasons [5] Group 3: Market Development - Major cities like Beijing, Shanghai, Guangzhou, and Shenzhen have become key markets for Gannan navel oranges, with consumption in northern markets increasing for seven consecutive years [3] - JD Logistics plans to support merchants in expanding into northern markets with a new northern distribution model and frost damage prevention standards [3][5] - The company aims to leverage its logistics and commerce integration to broaden sales channels for Gannan navel oranges [5][7]

JD Logistics, Inc. 3Q25 Preview Summary Company Overview - **Company**: JD Logistics, Inc. (2618.HK) - **Industry**: Transportation & Infrastructure - **Market Cap**: HK$83,181 million - **Stock Rating**: Equal-weight - **Price Target**: HK$13.00 - **Current Price (as of Oct 13, 2025)**: HK$12.52 Key Takeaways Revenue Growth - **Top-line growth** is expected to accelerate to **21% YoY** in 3Q25, primarily driven by the **food-delivery business**, contributing **8 percentage points** to growth [2][8] - Excluding food delivery, revenue from JD Group is estimated to grow at approximately **20% YoY**, consistent with 1H25 but softer compared to 2Q25 [2] - **External ISC** revenue growth remains robust, with double-digit growth in customer numbers and year-over-year improvement in **Average Revenue Per Customer (ARPC)** [2] Profitability Concerns - **Non-IFRS net profit** is projected to decline by **20% YoY** in 3Q25, contrasting with a **5% growth** in 2Q25 [3][8] - **Net margin** is expected to narrow to **3.8%** in 3Q25, down from **5.0%** in 2Q25 and **5.8%** in 3Q24, primarily due to front-loaded investments in labor, vehicles, and outsourced resources, along with poor performance from **Deppon** [3][8] Subsidiary Performance - **Deppon** is anticipated to face revenue and profit pressures in 3Q25 due to low seasonality, competition, and adjustments in product mix [4] - **Kuayue** is expected to maintain relatively stable revenue and profit growth [4] Investment Outlook - Despite the anticipated profit decline, the company expects mid single-digit profit growth for the full year, attributed to improved efficiency during peak season [8] - There are currently no plans for financing or shareholder returns [8] Risks and Considerations - **Upside Risks**: Better-than-expected revenue growth from JD's optimization efforts, strong external demand, and improved cost controls [15] - **Downside Risks**: Slower revenue growth due to soft demand, limited synergies with Deppon or JD.com, and potential overruns in front-loaded investments [15] Financial Metrics (Estimates) - **Revenue (Rmb million)**: - 2025e: 214,360 - 2026e: 237,402 - 2027e: 256,954 - **Net Income (Rmb million)**: - 2025e: 7,881 - 2026e: 8,964 - 2027e: 9,740 - **P/E Ratios**: - 2025e: 9.7 - 2026e: 8.5 - 2027e: 7.8 - **Free Cash Flow Yield Ratio (%)**: - 2025e: 18.7 - 2026e: 19.3 - 2027e: 20.8 [6][8] This summary encapsulates the key insights from the JD Logistics, Inc. 3Q25 preview, highlighting the company's revenue growth, profitability challenges, subsidiary performance, and investment outlook.

JD Logistics (2618.HK) Conference Call Summary Company Overview - JD Logistics (JDL) is China's largest provider of integrated supply-chain logistics services based on 2023 revenue, established in 2007 as the logistics department of JD.com [17][18]. Key Financial Insights - **3Q25 Expectations**: JDL is expected to report revenues above consensus, driven by organic growth in 1P/3P ISC and contributions from 1P food delivery. However, earnings may drop year-over-year due to tough comparisons from 3Q24 [1][2]. - **Revenue Projections**: Total revenues are projected to grow 21% year-over-year to RMB 53.9 billion, exceeding consensus estimates of RMB 53.3 billion [2]. - **Gross Margin**: Gross profit margin is estimated to contract to 9.8% from 10.6% in 2Q25, with adjusted operating profit margin projected at 3.2% [2]. - **Earnings Forecast**: Adjusted earnings before minority interests are forecasted at RMB 1.98 billion, in line with consensus [2]. Segment Performance - **1P ISC**: Organic momentum is expected to sustain into 3Q25 but may slow in 4Q25 due to tougher comparisons. The 1P food delivery business is anticipated to contribute fully in 3Q25 [3][4]. - **3P ISC**: Growth is driven by improvements in customer numbers and average revenue per user (ARPU), particularly in key verticals like auto and apparel [3]. - **Other Customers**: The impact of declining average selling prices (ASP) is expected to diminish, with volume growth driven by premium express services [3]. Margin and Earnings Outlook - **Earnings Drop**: JDL may experience a year-over-year earnings drop in 3Q25 due to a higher base last year, but net profit margin is projected to expand in 4Q25 due to peak season effects [4]. - **Consolidation Impact**: The consolidation of Dada's on-demand delivery service is expected to contribute incrementally to earnings in 4Q25 [4]. Valuation and Investment Strategy - **Target Price**: The target price for JDL is set at HK$18, based on a 12x 2025E P/E ratio, aligning with the average of China logistics peers [19]. - **Market Capitalization**: As of October 13, 2025, JDL's market cap is HK$83.32 billion (approximately US$10.71 billion) [6]. Risks - **Concentration Risk**: Revenue exposure to JD Group and a few verticals poses a risk [20]. - **Margin Pressure**: Heavy investments may impact margins [20]. - **Competition**: Increased competition could be more intense than expected [20]. - **Logistics Disruptions**: Potential disruptions related to COVID-19 outbreaks remain a concern [20]. Summary of Financial Metrics - **Net Profit**: Projected to increase from RMB 2.76 billion in 2023 to RMB 11.26 billion by 2027 [5]. - **Diluted EPS**: Expected to grow from RMB 0.440 in 2023 to RMB 1.640 in 2027 [5]. - **P/E Ratio**: Expected to decrease from 26.1 in 2023 to 7.0 in 2027, indicating improving valuation [5]. Conclusion - JD Logistics is positioned for steady growth with a strong infrastructure and technology platform, despite facing potential risks from market concentration and competition. The company maintains a "Buy" rating based on its valuation and growth prospects [18].

Core Insights - JD Logistics and Xpeng Motors announced a strategic partnership to enhance operations in the Middle East, with the opening of a parts warehouse in Dubai [1] Group 1: Strategic Partnership - JD Logistics will fully plan and operate the new parts warehouse for Xpeng Motors in the Jebel Ali Free Zone, Dubai [1] - This collaboration aims to improve the supply chain and service capabilities for Xpeng Motors in the Middle East region [1] Group 2: Warehouse Details - The newly established parts center stores over 1,000 types of automotive parts, catering to the maintenance needs of multiple Xpeng vehicle models [1] - It has become the largest automotive parts center for Xpeng Motors in the Middle East [1]

Core Insights - JD Logistics is significantly investing in logistics technology, with over 10 billion yuan in R&D over the past three years, surpassing competitors like SF Express [2][17] - The company has launched autonomous delivery vehicles, including a self-driving light truck and the sixth generation of smart delivery vehicles, aimed at improving logistics efficiency [4][6] - JD Logistics is expanding its service offerings to external clients, with external customer revenue increasing from 56% in 2021 to 70% in 2024 [19] Investment and Financial Performance - JD Logistics has a market value of over 80 billion HKD (approximately 75 billion yuan) and is projected to generate 182.8 billion yuan in revenue in 2024, with a net profit of 7 billion yuan [3][19] - The company's gross margin has improved from 5% in 2021 to 10% in 2024, approaching SF Express's 13% margin [19] Technological Advancements - The newly developed autonomous light truck features L4-level autonomous driving capabilities and can operate continuously, significantly reducing labor and time costs [4][6] - JD Logistics has introduced various automated products for warehouse storage, including handling robots and AI models for logistics optimization [2][13] Strategic Developments - The company has undergone several leadership changes, with a focus on enhancing its logistics technology capabilities [11][12] - JD Logistics has expanded its business through acquisitions, including a 9 billion yuan purchase of a leading large-item logistics company and a 2.7 billion yuan acquisition of Dada Group's instant delivery business [12][19] Market Position and Competitive Edge - JD Logistics operates over 1,600 warehouses and manages more than 5 million product types, achieving a stock turnover time of approximately 30 days, which is more efficient than competitors like Amazon [17] - The company is developing a brand matrix for its logistics automation products, referred to as the "Wolf Pack" series, to enhance its market presence [15]