Investment Rating - JD Logistics (JDL) is rated **Overweight (OW)** with a price target of HK$20 for December 2025 [1][4][9] Core Investment Thesis - JDL has shown **fundamental improvements** and **margin expansion** since its IPO in May 2021, driven by business model recalibration and operating leverage gains [1][9] - Despite fierce competition in e-commerce and express parcel delivery, JDL has achieved **breakeven in 2Q23** and rapidly improved profitability in subsequent quarters [1][12] - JDL is expected to benefit from China's **trade-in policy**, which boosts home appliance sales, and its integration with Taobao/Tmall for logistics services [1][12][16] - The company is **undervalued**, trading at 3.9x FY25E EV/EBITDA, compared to the industry average of 5.5x [1][23] Financial Performance and Forecasts - JDL's revenue is expected to grow **6% YoY** in 3Q24, reaching Rmb44B, with net profit of Rmb1.1B and a net profit margin (NPM) of 2.5% [2][12] - Revenue from external customers is growing faster than from JD, with JD's contribution declining to around **30%** of total revenue [2][12][14] - JDL's **EBITDA margin** is forecasted to improve from 8.8% in FY23 to 11.5% in FY25, driven by cost optimization and scale leverage [8][12] Growth Drivers - JDL is poised to benefit from **Double 11** sales events, with Taobao/Tmall's integration expected to unlock growth in express parcel business [16][17] - The company plans to expand its **overseas warehousing** capabilities, doubling the gross floor area (GFA) by the end of 2025, focusing on regions like the Americas, Europe, and Southeast Asia [20] - JDL's partnership with JD is expected to drive **mutual growth**, particularly in home appliance sales, which surged 67% YoY during the October National Days Holiday [12][16] Valuation and Market Performance - JDL's share price has surged **52% YTD**, outperforming the HSCI index (+18%) and other Chinese logistics companies [1][21] - The stock is trading at **12.2x FY25E P/E**, with a forecasted EPS CAGR of 20% during FY24-26E [1][23] - JDL's valuation discount to Alibaba/PDD is aligned with its target EV/EBITDA multiple of 5.0x, which is below the industry average of 5.5x [1][9][23] Industry Comparison - JDL's **EV/EBITDA multiple** of 3.9x for FY25E is lower than peers like ZTO Express (8.0x) and Yunda Holding (4.4x) [26] - The company's **ROE** is expected to improve from 4.7% in FY23 to 12.4% in FY25, reflecting stronger profitability and operational efficiency [8][26]

M Update Greater China Technology Hardware | Asia Pacific October 20, 2024 08:24 PM GMT Postcard from 2024 OCP Global Summit AI supply chain at OCP suggests strong demand for GB200 NVL72 racks in 2025 followed by less complex design (NVL2, MGX 4U) for AI inference and enterprise segment into 2026. Liquid cooling solutions and high-speed data transmission are two areas shown on the technology enhancement roadmap. The Open Compute Project (OCP) Global Summit was hosted in San Jose, US on October 15-17. Out of ...

| --- | --- | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------| | | Asia Pacific Equity Research 20 October 2024 | | | Neutral | | China Tower (0788) First Take: Mixed 3Q24 results, revenue soft but earnings improved thanks to stringent cost control | ...

M Update China Express | Asia Pacific October 20, 2024 03:46 PM GMT Market Analysis for September 2024 We see a mild MoM ASP improvement following industry price hike, likely indicating more profit was allocated to network partners, in our view. YoY revenue growth decelerated in low season. YTO outperformed on a low base. Key Takeaways YTO led YoY volume and revenue growth in Sep-24, likely on a low base. SF's international revenue rose 23% YoY on rising seaborne shipping rates, growing air cargo demand and ...

M Global Foundation Sunday Start | What's Next in Global Macro October 20, 2024 06:00 AM GMT Looking Back from Over There After a week speaking with clients in London, I am struck by both the parallels and contrasts with my conversations here in New York. Everyone there wanted to talk about the Fed and the US election, and while the questions on the Fed were familiar, the election discussions were vastly different. As in New York, conversations about Europe covered a pastiche of topics rather than a single ...

October 20, 2024 08:26 PM GMT M Foundation Investor Presentation | Asia Pacific Bazooka in the Making, or Fizzle Out? Morgan Stanley Asia Limited Robin Xing Chief China Economist Robin.Xing@morganstanley.com +852 2848-6511 Jenny Zheng, CFA Economist Jenny.L.Zheng@morganstanley.com +852 3963-4015 Bull vs. Bear: Fiscal Bazooka in the Making, or Fizzle Out? (18 October 2024) Nominal GDP Stayed Subdued (18 October 2024) For important disclosures, refer to the Disclosure Section, located at the end of this repor ...

Asia Pacific Equity Research 20 October 2024 J P M O R G A N Eyes on Asia Consumer Rising capital interest in Asia retail space; LVMH & L'Oréal slowdown; our recent sector views across Asia | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

North America Equity Research 20 October 2024 J P M O R G A N Apple Product Availability Tracker: iPhone 16 Average Lead Times Now In line with iPhone 15, Further Reassuring Overweight | --- | --- | --- | |-------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

M Update Zhejiang Huayou Cobalt Co Ltd | Asia Pacific October 20, 2024 08:24 AM GMT 3Q24 Net Profit Rmb1.3bn – A Beat Reaction to earnings | --- | --- | --- | |-----------------------------------|------------------------------------|----------------------------------------| | | | | | Strengthens our investment thesis | Meaningful upside | Meaningful revision higher | | Impact to our investment thesis | Financial results versus consensus | Impact to next 12-month consensus EPS | 3Q24 beat: Huayou Cobalt rele ...

HK) October 20, 2024 07:47 PM GMT M Update COSCO SHIPPING Energy Transportation | Asia Pacific Parent to Increase Stake in CSEA with Own Funds and Special Loans What's new: On October 20, CSE announced its parent COSCO Shipping Group (45.2% stake in CSE) will increase its A-share holdings in the next 6 months for a total consideration of Rmb679mn-Rmb1,358mn, funded through own funds and special loans, echoing the launch of PBOC's relending program. Our take – positive: • On its latest market close, CSE's pa ...