Core Viewpoint - JD Logistics is expanding its service offerings by recruiting full-time delivery riders for its rapidly growing food delivery business, JD Takeout, which is expected to enhance operational efficiency and synergy within its logistics network [1] Group 1: Recruitment and Workforce Expansion - JD Logistics has begun recruiting full-time riders to support its food delivery service, with over 120,000 full-time riders already onboard [1] - The company anticipates reaching a total employee count of 900,000 by the end of Q2 2024, marking a record increase in quarterly net employees since its inception [1] - As of the end of 2024, JD Logistics is projected to have a total workforce of 499,000, with nearly 80,000 frontline employees added within a year [2] Group 2: Financial Implications - JD Logistics' total human resources expenditure, including both in-house and external personnel, is expected to reach RMB 91.8 billion for the twelve months ending March 31, 2025 [2] - The company is committed to signing formal labor contracts with all frontline employees, including delivery riders, and continues to provide social insurance benefits [2] Group 3: Industry Context and Competitive Landscape - Industry analysts suggest that JD Logistics may explore further collaboration between full-time delivery riders and couriers to enhance service capabilities, particularly during peak delivery times [3] - The success of SF Express in integrating its same-city delivery riders with courier services has shown a revenue increase of 32.5% to RMB 6.625 billion in 2024, highlighting the potential benefits of such synergies [2]

Investment Rating - The report maintains a "Recommended" rating for the company, indicating a positive outlook for its stock performance relative to the market index [2][4]. Core Views - The company is positioned as a leading player in the third-party delivery sector, which exhibits strong growth potential. The upward revision of the annual transaction cap reflects the unexpected surge in demand for last-mile delivery services [2][3]. - The company has significantly increased its profit forecasts for 2025-2027, with projected net profits of 350 million, 670 million, and 1.27 billion RMB respectively, compared to previous estimates of 260 million, 410 million, and 590 million RMB [2][3]. - The expected earnings per share (EPS) for the same period are revised to 0.39, 0.73, and 1.38 RMB, with corresponding price-to-earnings (P/E) ratios of 38, 20, and 11 [2][3]. Summary by Sections Event Overview - On June 13, 2025, the company proposed to revise the annual cap for related transactions for last-mile delivery services to 12.845 billion and 20.551 billion RMB for 2025 and 2026, representing year-on-year increases of 101.7% and 60.0% respectively [1]. - The revision is driven by the faster-than-expected growth in last-mile delivery demand, with historical transaction amounts reaching 6.369 billion RMB in 2024, up 33.3% from 4.777 billion RMB in 2023 [1]. Business Growth Drivers - The company's flexible transportation network and strong delivery capabilities are expected to meet the increasing last-mile delivery demands, leading to rapid revenue growth [1]. - Key growth strategies include enhancing e-commerce return collection capabilities, expanding service networks and rider teams, and diversifying delivery services [1]. - The company anticipates continued strong growth in express delivery services through deeper collaboration with SF Holding Group, particularly during peak periods [1]. Financial Projections - Revenue projections for 2024, 2025, 2026, and 2027 are 15.746 billion, 23.598 billion, 33.748 billion, and 42.178 billion RMB, with growth rates of 27.1%, 49.9%, 43.0%, and 25.0% respectively [3]. - The projected net profit growth rates for the same years are 161.8%, 167.1%, 89.9%, and 88.4% [3]. - The company’s financial ratios indicate a strong growth trajectory, with a projected return on equity (ROE) of 24.09% by 2027 [3].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance in the coming year [2][4]. Core Insights - The company is experiencing an unexpected surge in demand for last-mile delivery services, leading to an upward revision of the annual transaction cap for related services to RMB 128.45 billion and RMB 205.51 billion for 2025 and 2026, respectively, representing year-on-year increases of +101.7% and +60.0% [1]. - The company's flexible transportation network and strong delivery capabilities are expected to significantly enhance revenue from last-mile delivery services, driven by factors such as the growth of e-commerce returns, network expansion, and diversified service offerings [1]. - The company anticipates continued strong growth in express delivery services in collaboration with SF Holding Group, particularly during peak periods and in regions lacking local delivery personnel [1]. Financial Projections - Revenue is projected to grow from RMB 15.75 billion in 2024 to RMB 42.18 billion by 2027, with a compound annual growth rate (CAGR) of 27.1% [3]. - Net profit is expected to increase significantly from RMB 132 million in 2024 to RMB 869 million in 2027, reflecting a robust growth trajectory [3]. - Earnings per share (EPS) are forecasted to rise from RMB 0.14 in 2024 to RMB 0.95 in 2027, with corresponding price-to-earnings (P/E) ratios decreasing from 96 to 15 over the same period [3].

Core Viewpoint - The Hong Kong stock market has experienced a rally, with SF Express (09699.HK) showing significant performance, rising over 33% since May 9, 2023, and reaching a market capitalization of HKD 9.8 billion, driven by increased transaction volumes and a competitive landscape in the instant delivery sector [1][2]. Group 1: Market Performance - SF Express has seen a substantial increase in its stock price, with a cumulative rise of over 33% since May 9, 2023, and a single-day transaction volume of nearly HKD 350 million on May 13, 2023 [1]. - The company's business data during the "May Day" holiday indicates a year-on-year growth of 87% in overall order volume, with significant increases in specific categories such as supermarket orders (up 177%) and beverage orders (up 106%) [1]. Group 2: Competitive Landscape - The competition among major platforms like Meituan, Alibaba, and JD.com in the instant retail sector has intensified, leading to an increase in order volumes for third-party delivery platforms [1][2]. - Leading chain brands are increasingly opting for independent third-party delivery platforms to ensure service stability and reduce reliance on traffic platforms, as exemplified by Luckin Coffee's standardized delivery service provided by SF Express across various platforms [2]. Group 3: Financial Performance - SF Express reported a revenue of CNY 15.746 billion for 2024, representing a year-on-year growth of 27.1%, and a net profit of CNY 132 million, marking a significant increase of 161.8% [3]. - The company is recognized as the only third-party delivery enterprise in the industry that has achieved high revenue growth while maintaining continuous profitability [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company achieved a significant profit increase in 2024, with total revenue reaching 15.746 billion yuan, a year-on-year growth of 27.1%, and a net profit attributable to shareholders of 1.3246 billion yuan, up 161.8% year-on-year [7] - The company is expected to continue its growth trajectory into 2025, with projected revenue of 19.602 billion yuan and net profit of 2.4734 billion yuan, reflecting an 86.73% increase [1][7] - The report highlights the company's strong performance in the 2B local delivery business, with revenue from this segment growing by 28.1% to 6.688 billion yuan, driven by an increase in active merchants and partnerships [7] - The last-mile delivery services also showed robust growth, with revenue increasing by 32.5% to 6.625 billion yuan, supported by enhanced operational efficiency and collaboration with major clients [7] Financial Summary - Total revenue projections for the company are as follows: 15.746 billion yuan in 2024, 19.602 billion yuan in 2025, 23.622 billion yuan in 2026, and 27.874 billion yuan in 2027, with respective year-on-year growth rates of 27.09%, 24.49%, 20.51%, and 18.00% [1][8] - The net profit attributable to shareholders is forecasted to be 1.3246 billion yuan in 2024, 2.4734 billion yuan in 2025, 3.6238 billion yuan in 2026, and 4.9145 billion yuan in 2027, with year-on-year growth rates of 161.80%, 86.73%, 46.51%, and 35.62% respectively [1][8] - The company's earnings per share (EPS) is projected to increase from 0.14 yuan in 2025 to 0.54 yuan in 2027, indicating a strong upward trend in profitability [1][8]