DEPPON(603056) Changjiang Securities·2024-12-02 01:16Investment Rating - The investment rating for the company is "Buy" and is maintained [4][6]. Core Views - The report highlights that with a significant macroeconomic policy shift and improving economic expectations, logistics companies at the bottom of the cycle, like the company in focus, have substantial upside potential [4][19]. - The company has faced challenges due to intensified competition, strategic management fluctuations, and demand pressures, but recent changes in the competitive landscape and management strategy may lead to a turning point in profitability and stock price [4][5][24]. Summary by Sections Introduction: A Leading Player in the Cyclical Bottom of Express Delivery - The company is positioned well in the logistics sector, showing high performance metrics while maintaining relatively low valuations, indicating strong investment value [4][19]. Review: Why the Leading Express Delivery Company Lost Its Way - Since its IPO, the company's stock performance has been underwhelming, with profitability stagnating due to increased competition, management instability, and economic pressures [4][24]. - The competitive landscape has shifted with the acquisition by JD Logistics, potentially stabilizing the market and allowing for strategic realignment [5][24]. Changes in the Competitive Landscape: Awaiting Demand Recovery - The acquisition by JD Logistics has restructured the competitive dynamics from a three-player to a more stable duopoly, which is expected to help restore pricing power in the industry [5][55]. - The report notes an increase in online shopping penetration for large items, which is beneficial for the company's market share [5][55]. Outlook: The Former Leader Set to Rise Again - The new management team is focused on operational efficiency and enhancing service quality, which is expected to drive growth in volume and profitability [6][55]. - The company is projected to achieve net profits of 850 million, 1.02 billion, and 1.17 billion yuan for the years 2024, 2025, and 2026, respectively, with corresponding P/E ratios of 17.5, 14.6, and 12.7 times [6][55]. Lean Management and Network Integration - The company is implementing lean management practices and accelerating network integration, which is anticipated to improve asset utilization and market share [6][55].