Investment Rating - The report maintains a "Buy" rating for the company [6]. Core Insights - In Q2 2025, the company achieved a revenue growth of 11.5% year-on-year, with a net profit growth of 21.0% [3][4]. - The company's operational activation has driven a significant increase in package volume, leading to a continuous market share increase [3]. - Strategic resource investments and flexible pricing strategies have put pressure on gross margins, but a structural cost reduction is expected to improve margins in 2026 [3][4]. - The company benefited from a tax-adjusted investment income of 590 million yuan from the disposal of Southern SF Logistics REIT shares in Q2 [3]. - A "shared growth" stock ownership plan has been introduced to enhance long-term returns [3]. Summary by Sections Financial Performance - For H1 2025, the company reported total revenue of 146.86 billion yuan, a 9.3% increase year-on-year, and a net profit of 5.74 billion yuan, up 19.4% [3]. - In Q2 2025, revenue reached 77.01 billion yuan, with net profit at 3.5 billion yuan, reflecting year-on-year growth of 11.5% and 21.0% respectively [3]. Operational Highlights - The company's express delivery business volume grew by 25.7% year-on-year in H1 2025, with Q2 showing a 31.2% increase to 4.27 billion packages [4]. - The company has seen significant growth in various business segments, including same-city delivery, which grew by 38.9% [4]. Margin and Profitability - The gross margin in Q2 2025 decreased by 1.4 percentage points to 13.1% year-on-year, primarily due to increased strategic investments and flexible pricing [4]. - The company’s operating expense ratio improved, decreasing by 0.5 percentage points year-on-year [4]. Future Outlook - The company expects net profits for 2025, 2026, and 2027 to be 11.67 billion, 13.75 billion, and 15.91 billion yuan respectively, with corresponding P/E ratios of 18.0, 15.3, and 13.2 [4].

Group 1 - The "activation of operations" strategy has shown significant results, leading to an increase in both volume and profit, positioning the company as a leader in the industry [1] - New business initiatives and internationalization have improved profitability, solidifying a second growth curve for the company [1] - Stable dividends enhance investor confidence, while equity incentives drive long-term growth [1]

Group 1: Strategic Focus and Organizational Changes - The company aims to activate operations by shifting from a "management-oriented" to a "service-support" model, starting from Q2 2024 [1] - Strategic and operational planning has been integrated, focusing on business units and incubator strategies [1] - The headquarters has been renamed to emphasize service over management, with a focus on developing standards and guidelines [2] Group 2: Transition to Solutions and International Expansion - The company is moving from selling standard products to providing industry solutions, leveraging its express delivery capabilities [2] - International expansion is seen as a significant opportunity, with plans to enhance logistics capabilities abroad [2] - The company has learned from its international experiences and aims to strengthen its international capacity to meet customer needs [2] Group 3: Financial Performance and Growth Strategy - The company reported a Return on Equity (ROE) of 9.2% for 2023, projected to rise to 11.2% in 2024, aligning with its strategic goals [6] - Recent growth is attributed to diversified business segments and effective internal management, rather than reliance on a single sector [5] - The company emphasizes quality revenue growth over mere volume, focusing on product and income structure [5] Group 4: Infrastructure and Technological Investments - The Ezhou hub is expected to enhance profitability by providing comprehensive logistics solutions, with significant client interest from Fortune 500 companies [7] - The logistics drone initiative, started in 2013, is positioned to capitalize on emerging low-altitude economic opportunities [8] - The company aims to optimize its capital expenditures, which have decreased by 39% year-on-year, while maintaining a healthy financial state [9] Group 5: Operational Efficiency and Customer Focus - The company has seen a reduction in customer complaints, indicating improved service quality alongside operational activation [9] - The goal of activating operations is to enhance employee engagement and maximize potential, balancing standardization with flexibility [9] - The company is focused on adjusting its revenue and cost structures to align with future strategic directions, enhancing resilience against risks [9]

Core Viewpoint - The company reported strong financial performance in 2024, with significant growth in revenue and net profit, driven by effective operational strategies and business segment performance [1][2][3]. Financial Performance - The company achieved a total revenue of 284.4 billion yuan in 2024, marking a year-on-year increase of 10.1%, and a net profit attributable to shareholders of 10.2 billion yuan, up 23.5% [1]. - In Q4 2024, revenue reached 77.56 billion yuan, reflecting an 11.8% year-on-year growth, with a net profit of 2.55 billion yuan, increasing by 29.6% [1]. Business Segment Performance - The express logistics segment handled 1.326 billion packages, growing by 11.5% year-on-year, with revenue from express services reaching 122.21 billion yuan, a 5.8% increase [2]. - The economic express segment saw a revenue increase of 11.8% year-on-year, with a volume growth of 17.5% [2]. - The freight business experienced over 20% growth in volume, with revenue of 37.64 billion yuan, up 13.8% [2]. - The cold chain and pharmaceutical segments faced a decline in revenue to 9.81 billion yuan, down 4.9% due to adverse weather conditions affecting fresh produce [2]. - The same-city instant delivery service reported a revenue of 8.87 billion yuan, growing by 22.4% year-on-year [2]. Supply Chain and International Business - The company capitalized on opportunities in cross-border e-commerce and international markets, achieving a revenue of 70.49 billion yuan in this segment, up 17.5% [3]. - The company improved operational efficiency, with total operating costs of 244.81 billion yuan, a growth of 8.7%, which was lower than the revenue growth rate [3]. - The gross profit margin increased to 12.93%, up 1.11 percentage points year-on-year [3]. Cost Management and Profitability - The company effectively managed expenses, with sales, management, R&D, and financial expense ratios at 1.09%, 6.52%, 0.89%, and 0.65%, respectively, showing a decrease in most categories [3]. - The net profit margin reached 3.58%, an increase of 0.39 percentage points year-on-year, indicating significant improvement in profitability [3]. Investment Outlook - The company announced a cash dividend rate of 40% for 2024, an increase of 5 percentage points, reflecting a commitment to shareholder returns [4]. - Projections for 2025-2027 indicate expected revenues of 310.52 billion yuan, 335.96 billion yuan, and 360.08 billion yuan, with respective year-on-year growth rates of 9.2%, 8.2%, and 7.2% [4]. - Net profits for the same period are forecasted to be 11.69 billion yuan, 12.95 billion yuan, and 14.20 billion yuan, with growth rates of 15.0%, 10.8%, and 9.6% respectively [4].