Summary of Jitu Express Conference Call Company Overview - Jitu Express has rapidly grown in the Chinese market through an agent operation model and aggressive expansion strategy, achieving positive EBITDA in 2023 and expected profitability in 2024, with daily parcel volume exceeding 60 million, ranking fifth in China's e-commerce express delivery sector [2][4][11] Key Insights - Market Trends: The trend of small parcel delivery is evident in China, with a growth rate of 17% from January to July 2025, driven by consumer downgrade and increased penetration of e-commerce in second and third-tier cities [2][5] - Competitive Landscape: The anti-involution policies have led to price stabilization actions in regions like Yiwu and Guangdong, which may alleviate price competition and improve industry profitability [2][5] - Emerging Markets: Jitu Express is actively expanding into emerging markets such as the Middle East and Brazil, gradually achieving breakeven and expected to turn profitable by 2025, indicating rapid growth and accelerated overseas expansion [2][6] Operational Model - Jitu Express employs an agent operation model, differing from the direct or franchise models of other domestic express companies. This model ensures network stability and alignment of interests through cross-shareholding [2][7] - The company leverages OPPO's extensive offline network for expansion and emphasizes brand promotion, distinguishing itself from domestic competitors [2][7] Management Team - The core management team primarily comes from OPPO's Southeast Asia agency, with significant control held by the founder, Li Jie, who has a 55.56% voting power through an AB share structure. The management style focuses on channel stability and aggressive marketing [2][8][9] Financial Performance - Since 2023, Jitu Express has seen its EBITDA turn positive in the Chinese market, with continuous optimization of cash flow and net profit. The company is moving towards self-sustainability, enhancing its operational capabilities across regions [2][10] - Daily parcel volume has surpassed 60 million, and cost control is improving, narrowing the gap with leading express companies despite currently thin single-ticket profits [2][11] Southeast Asia Market Importance - Southeast Asia is a crucial market for Jitu Express, with low e-commerce penetration and significant growth potential. The region's e-commerce compound growth rate is expected to exceed 20% from 2023 to 2025, contributing to the express delivery growth [2][12] Emerging Market Strategy - Jitu Express is focusing on emerging markets, which have lower e-commerce penetration and are expected to grow at a compound rate of 17.6% from 2023 to 2027. The company aims to enhance profitability through strategic adjustments and partnerships with cross-border e-commerce platforms [2][13] Future Projections - For 2025 and 2026, Jitu Express is projected to achieve net profits of $380 million and $620 million, respectively, with corresponding PE ratios of approximately 30 times and 16 to 17 times. The valuation could reach over 80 billion RMB, with potential for exceeding 100 billion RMB if performance exceeds expectations [2][14]
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