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]

Investment Rating - The report maintains a "Buy" rating for JD Logistics (02618) [3] Core Views - JD Logistics achieved record-high profitability in Q3 2024, driven by cost optimization and external order growth [3] - External orders remain the primary revenue source, accounting for 71.20% of total revenue [6] - The company's net profit surged 438.15% YoY to RMB 2.445 billion in Q3 2024 [3] Financial Performance Revenue - Q3 2024 revenue reached RMB 44.396 billion, up 6.56% YoY [3] - Internal revenue from JD Group grew 8.13% YoY to RMB 12.788 billion, accounting for 28.80% of total revenue [6] - External revenue increased 5.94% YoY to RMB 31.608 billion [6] Profitability - Net profit attributable to shareholders skyrocketed 928.77% YoY to RMB 2.205 billion [3] - Non-IFRS profit rose 205.14% YoY to RMB 2.573 billion [3] - Gross profit margin improved by 3.79 percentage points to 11.71% [10] Cost Structure - Operating costs increased 2.18% YoY to RMB 39.198 billion, lower than revenue growth [11] - Outsourcing costs as a percentage of revenue decreased by 1.26 percentage points [11] Business Segments External Integrated Supply Chain - Revenue grew 1.23% YoY to RMB 7.875 billion, representing 17.74% of total revenue [6] - Customer base expanded 9.36% YoY to 59,300 [6] Pure Distribution Business - Revenue increased 7.60% YoY to RMB 23.733 billion, accounting for 53.46% of total revenue [6] - Deppon contributed RMB 9.850 billion, up 1.03% YoY [6] - Non-Deppon revenue grew 12.80% YoY to RMB 13.883 billion [6] Future Outlook - Revenue is projected to grow 9%, 8%, and 7% in 2024-2026, reaching RMB 182.424 billion, RMB 196.535 billion, and RMB 211.010 billion respectively [12] - Net profit attributable to shareholders is expected to increase 1035%, 10%, and 10% in 2024-2026 [12] - The company's PE ratio is forecasted at 13.03x, 11.83x, and 10.80x for 2024-2026 [12]

Incident Overview - A fire broke out at the Wuxi Yutai Logistics Park Phase II Warehouse No 5 on November 12, 2024, at 22:00, and was quickly controlled and extinguished by firefighters with no casualties or spread to surrounding warehouses [1] - The warehouse involved was a storage facility, not a sorting or operational warehouse, and contained low-value daily necessities, with no mobile phones or express packages [1][2] Company Response - JD Logistics issued a statement refuting online rumors about the fire, including claims of billions of dollars worth of mobile phones being destroyed, the entire logistics park being devastated, and the use of temporary workers smoking on the job [1][2] - The company has reported the rumors to the police and urged the public not to create, spread, or believe in such misinformation [2] Operational Impact - The logistics park has gradually resumed normal operations, and local JD Logistics services in Wuxi remain unaffected, ensuring that consumer deliveries are not impacted [2]