The Zhitong Finance App learned that on May 21, Manbang Group released its 2024 Q1 results. The performance of all indicators was impressive, and profitability continued to be strong. The period achieved revenue of 2,269 billion yuan, a year-on-year increase of 33.3%, gross profit of 1,237 billion yuan, a year-on-year increase of 45.02%, and a gross profit margin of 54.5%, a record high. Instead of net profit under US accounting standards of 760 million yuan, a year-on-year increase of 46.9%, the corresponding net interest rate reached 33.5%.
Manbang Group connects and matches cargo owners and truck drivers, and is committed to becoming a one-stop delivery portal for tens of millions of small and medium-sized enterprises, helping enterprise cargo owners digitize logistics while reducing logistics costs. In Q1 2024, the number of users and fulfillment rates at both ends continued to grow. The average monthly activity of shippers reached 2.14 million, an increase of 22.3% over the previous year. The number of active drivers in the past 12 months reached 3.91 million, and the fulfillment rate reached 33.5%. Both reached new highs.
With refined first-run operations and effective product strategies, the company's platform user stickiness continues to increase, and the number of new users is also increasing quarterly. Large-scale transaction volume continues to unleash the platform's monetization rate, driving a high increase in performance. However, the biggest highlight of the company's 2024 Q1 is that profits continue to be released and profitability continues to increase as scale grows, and profit is a prerequisite for dividends. This is also the motivation for the company to implement the dividend plan.
Maintain scale growth, and gross margin reach a record high
The Zhitong Finance App learned that Manbang Group matches transactions with scattered truck drivers to achieve end-to-end matching. The business model includes freight brokerage services, transaction services, value-added services and membership services. In the past few years, the company aimed to grow on a scale. Revenue grew from 2,581 billion yuan to 8.436 billion yuan in 2020-2023, with a compound growth rate of 48.4%. After achieving the first profit in 2022, the scale effect began to stand out. Profitability continued to improve, and achieve high-quality and balanced development of growth and profit.
In Q1 2024, the company's gross margin reached 54.5%, up 4.4 percentage points and 2.3 percentage points year-on-year, respectively, and reached a record high. The cost of a freight platform is mainly the cost of freight brokerage and trading activities generated by both sides (shippers and drivers) to match user needs. The gross margin continues to increase. On the one hand, the company uses leading advantages to seize pricing power, and on the other hand, platform matching costs have been reduced after scaling up.
Manbang Group's gross margin performance was outstanding, and various expenses continued to be optimized, which also led to an increase in net interest rates. In Q1 2024, the company's net interest rate under non-US accounting standards reached 33.3%, while shareholders' net interest rate was 25.6%, up 1.6 percentage points and 1.3 percentage points from month to month, respectively. In terms of net interest rate indicators, the company is slightly higher than its peers. The main reason is that it has better cost control and a relatively stable core expense ratio.
On a quarterly basis, the company's sales expenses rate fluctuated slightly, but mostly in the 13-15% narrow range. The administrative expenses rate stabilized at 11-12%, and the R&D expenses rate stabilized at 10-11% in 2024 Q1. The above three core expenses rates were 15%, 11.6%, and 10.9%, respectively, for a total of 37.5%, down 1.1 percentage points and 1.6 percentage points from year to month, respectively. In addition, since the company provides value-added services to users, there are loans receivable, but the bad debt rate is low, and the non-performing loan ratio has stabilized at around 2.0% in recent quarters.
Manbang Group accounts for the majority of sales expenses. The main reason is that the company's main job is user growth, and the results have been remarkable. Monthly active shippers, active contract drivers, and transaction scale all hit new highs every quarter. According to peers, the company's sales expenses ratio can still be reduced by a few more percentage points, and as the revenue scale further expands, the sales expenses ratio will drop quarterly due to the scale effect, increasing the company's overall profit level.
It is worth mentioning that in March 2024, the company announced a cash dividend plan of about 150 million US dollars. Obviously, the company's growth target was initially achieved, and the company's development results were actively shared with shareholders. Q1 gross margin and adjusted net profit margin reached record highs in 2024, confirming that the company's growth target has transitioned to a balanced development trend. According to the guidelines, Q2 revenue grew by 28.3% to 31.7%.
Manbang Group is capable and continues to pay dividends to bring maximum returns to shareholders. As of March 2024, the company had close to $3.8 billion in cash and cash equivalents on its accounts. Strong cash strength, combined with strong fundamentals, is highly attractive to value investors.
“User growth” is sustainable, and “bilateral payments” drive high performance growth
Manbang Group's business model is sustainable, and scale growth and profit can be expected. Using two models, information matching and car-free carriers, the company successfully opened up bilateral payment models and explored various monetization businesses. Currently, the core is four categories, including freight brokerage, transaction services, shipper member income, and value-added services. In Q1 2024, the revenue share of the company's four business categories was 42.5%, 30.5%, 9.4%, and 17.6%, respectively.
In fact, the company's business strategy “focuses on the growth of users (shippers and drivers)” to drive the flywheel effect by promoting accumulated freight resources and unleash performance with the platform's monetization rate.
On the shipper side, Manbang Group is built through a digital platform to effectively help shippers reduce logistics costs and steadily transform to new quality productivity. The company provides products such as product features with simplified delivery and efficient transactions for new direct customers, and attracted more shippers with accurate matching and efficient transportation. In Q1 2024, the company's share of direct customer fulfillment orders reached a record high of 47%. Fulfilled orders reached 39.3 million, an increase of 29.6% over the previous year, and continued to be far ahead of the road freight market growth rate.
On the driver side, the company upgraded its hierarchical driver operation system, optimized transaction efficiency through equity traction and accurate matching, and adopted mechanisms such as “driver behavior to grab good goods in seconds”, and used artificial intelligence algorithms to identify high-quality supplies and match supplies to the most suitable drivers, effectively improving matching efficiency and quality, enhancing the stickiness of internal drivers while also attracting external drivers to settle in. Accurate matching also brought the platform's compliance rate to a new high, reaching 33.5%, an increase of nearly 6 percentage points over the previous year.
In addition, Manbang Group also provides a one-stop service. The penetration rate of its value-added businesses such as Manyunbao, finance, insurance, energy, and ETC continues to expand, greatly increasing the stickiness and satisfaction of shippers and drivers. As can be seen, Manbang Group continues to increase the stickiness and number of new users through product and business strategies. Under the bilateral payment model, the superposition industry is in the development stage and the policy trend of new quality productivity, and performance is expected to continue to increase.
Active dividends are rewarded to shareholders, and investment institutions have increased their holdings many times
Manbang Group has achieved balanced growth and profit development. High dividends will become the norm, and gold will always shine. The company's value is being exploited by the market. The company's market value has increased by 34.5% since this year. The company has attracted a number of institutional investors. According to market disclosure information for the first quarter, the world's top long-term institution, Invesco, increased the bank for four consecutive quarters, and many foreign-funded institutions, including Morgan Stanley, Bank of America, UBS, and Goldman Sachs, have increased their holdings.
In addition, the company is also the 100 billion private equity firm Greenwood Jinglin Asset that added the most positions in the first quarter of 2024. It is ranked among Jinglin's top ten major stocks. The market value of its holdings currently exceeds 100 million US dollars.
In fact, Manbang Group has also been showing confidence in the company's development to the market, including the March announcement extending the repurchase plan by one year until March 12, 2025, repurchasing up to 300 million US dollars of ADS, and the 150 million US dollar dividend plan, all reflecting management's confidence in the company's future development prospects and recognition of its growth value. The market later realized that as the company's value is further exploited, the valuation level will further improve.
Overall, in Q1 of this year, Manbang Group handed over a satisfactory questionnaire to investors. The scale continued to grow and profits reached new highs. According to the Q2 guidelines, the first half of the year's results are also expected to maintain a high level of growth in Q1. The company has strong fundamentals, achieved balanced growth and profit development, received additional holdings from many investment institutions, and actively rewarded shareholders and carried out market value management through repurchases, etc., and the future can be expected.