STO(SZ:002468) CSC SECURITIES (HK) LTD·2024-10-31 09:02Investment Rating - The report assigns a "Buy" rating for the company [2][5]. Core Views - The company achieved a revenue of 33.49 billion RMB for the first three quarters of 2024, representing a year-over-year increase of 14.2%. The net profit attributable to shareholders was 650 million RMB, up 195.2% year-over-year, which met expectations [3]. - In Q3 2024, the company reported a revenue of 11.92 billion RMB, a 16.3% increase year-over-year, with a net profit of 210 million RMB, reflecting a significant increase due to a low base from the previous year [3][4]. - The company continues to implement a price-for-volume strategy, resulting in a 28.0% increase in express delivery volume, totaling 5.88 billion packages [3][4]. Summary by Sections Financial Performance - The company's gross margin in Q3 was 5.4%, an increase of 2.3 percentage points year-over-year, attributed to improved capacity utilization and cost management [4]. - The net profit margin after deducting non-recurring items increased by approximately 1.2 percentage points to 1.69% in Q3, with a net profit of 200 million RMB, an increase of 210 million RMB year-over-year [4]. Future Outlook - The company has significant profit growth potential, with expectations to increase daily throughput capacity to over 75 million packages by 2024, up from the current average of 64 million [4]. - The report forecasts net profits of 910 million RMB, 1.26 billion RMB, and 1.51 billion RMB for 2024, 2025, and 2026 respectively, with year-over-year growth rates of 168%, 38%, and 20% [5][6]. Valuation Metrics - The current price-to-earnings (P/E) ratios for 2024, 2025, and 2026 are projected to be 19, 13, and 11 times respectively [5][6].