STO(SZ:002468) HTSC·2024-09-01 06:03Investment Rating - The investment rating for the company is "Buy" with a target price of RMB 12.72 [5]. Core Views - The company has exceeded earnings expectations with a significant increase in net profit and market share, driven by a strategy of increasing volume at the expense of price [1][2]. - The company is expected to continue improving its profitability through ongoing investments in infrastructure and efficiency enhancements [3]. Summary by Sections Financial Performance - In the first half of 2024, the company achieved operating revenue of RMB 21.57 billion, a year-on-year increase of 13% - The net profit attributable to the parent company reached RMB 440 million, a year-on-year growth of 100% - The total express delivery volume was 10.23 billion pieces, up 32.5% year-on-year [1][2]. Market Position - The express delivery industry completed a total volume of 80.16 billion pieces in the first half of 2024, reflecting a year-on-year growth of 23.1% - The company's market share increased to 12.8%, up 0.9 percentage points year-on-year, outperforming competitors [2]. Cost and Margin Analysis - The average revenue per package for the company was RMB 2.09, down 11.4% year-on-year, primarily due to an increase in lightweight packages and strategic pricing adjustments - The cost per package decreased to RMB 1.97, a reduction of 12.4% year-on-year, leading to a gross margin of 5.76%, which is an increase of 1.17 percentage points year-on-year [2]. Infrastructure Investment - The company invested RMB 980 million in machinery and equipment, a year-on-year increase of 115.6%, and RMB 190 million in transportation equipment, up 87.9% - The company is in the final year of a three-year capacity enhancement project, with expectations to exceed a daily throughput capacity of 75 million packages in 2024 [3].