The Zhitong Finance App learned that CICC released a research report stating that it covered Jitu Express - W (01519) for the first time, giving it a “outperforming industry” rating, with a target price of HK$8. The company is a leading express delivery company in Asia with a global business layout (No. 1 in Southeast Asia and No. 5 in China in terms of package volume). Its business covers 13 countries (including Latin America and the Middle East, collectively referred to as new markets below). The bank is optimistic about the growth prospects brought by the company's perfect network coverage and international perspective. The market has yet to recognize the company's revenue development potential as a global express delivery company, as well as the company's long-term profit growth potential as operational efficiency improves.

The main views of CICC are as follows:

The global express delivery industry still has potential for growth, and the company's Southeast Asia, China and new markets are at various stages of development.

According to Frost & Sullivan data, it is estimated that the number of express shipments in Southeast Asia will increase from 12.8 billion in 2023 to 23.5 billion in 2027 (CAGR is 16.5%); the total number of packages in China will increase from 132.1 billion in 2023 to 201 billion in 2027 (CAGR is 11.1%); the size of the new market will increase from 3.9 billion in 2023 to 7.1 billion in 2027 piece (CAGR is 16.5%). The bank believes that there is still potential for growth in express delivery demand, benefiting from factors such as e-commerce development, smaller packages, and increased returns.

Goku Express is an express delivery company with a global layout:

Leading in Southeast Asia, it has strong competitiveness in China and is constantly expanding in new markets (including Latin America and the Middle East). The bank believes that with its global express delivery network and platform-neutral characteristics, under the entrepreneurial regional agent model, Jitu is expected to expand globally with diversified e-commerce partners: stabilizing its leading position in Southeast Asia, maintaining competitiveness in China, and expanding rapidly in new markets.

The company's operating leverage is gradually showing:

The Southeast Asian business contributed to steady profit growth, the gradual transformation of profits in China, and rapid expansion of business in emerging markets. In 2023-2025, the bank expects the company's revenue CAGR in Southeast Asia, China, and emerging markets to be 20.5%, 20.5%, and 43.7%, respectively. The bank expects the Southeast Asia EBITDA margin to stabilize at 14-15%, the operating profit in China will be positive this year, the EBITDA of emerging markets will be corrected this year, and operating profit is expected to be corrected next year.

Potential catalysts: China's express delivery competition is evolving towards moderate coexistence, the company's operating efficiency is benefiting from increased scale effects, and revenue growth in new markets has exceeded expectations.