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社区
会员
机构：中金公司
研究员：Qibin FENG/Xin YANG/Gangxian LIU
We invited management of J&T Global Express to conduct a non-deal roadshow with investors following its 4Q24 results. During the event, the firm discussed its business operations in various regions that are under market scrutiny.
Comments
Southeast Asia: Parcel volume may remain stable as the firm is the market leader, supported by the growth of social e-commerce. The express delivery landscape is likely to improve in 2025, while EBIT per parcel is likely to remain stable. We believe the e-commerce retail market in Southeast Asia is still expanding rapidly, with Frost & Sullivan projecting a CAGR of 18% from 2025 to 2029. Social e-commerce platforms such as TikTok may continue to gain market share, leveraging their own user traffic.
As a third-party logistics service provider, the firm holds a competitive advantage over self-built e-commerce logistics providers, which ranked No. 2 and No. 3 in the market in 2024. Additionally, after years of competition, the firm reported that the market share of third-party logistics providers ranked No. 4 and No. 5 declined by 1.3ppt YoY to 11% in 2024, while its own market share rose by 3.2ppt YoY to 28.6%, highlighting its competitive strengths in the sector.
Looking further into 2025, we expect the competitive landscape of the express delivery industry in Southeast Asia to improve further. The firm’s parcel volume is likely to grow by over 25% YoY, maintaining its No. 1 market position, while its EBIT per parcel is likely to remain stable, supported by cost optimization.
China: Parcel volume to grow 20%; per-parcel cost still has room for optimization; per-parcel EBIT to grow. According to the State Post Bureau, parcel volume in the express delivery industry rose 22% YoY in January-February, with demand continuing to improve. We expect the firm's parcel volume to grow 20% in 2025. Although the market may face potential changes in competition this year, we still see room for optimization of the firm compared with competitors in China's express delivery market given that the company's per-parcel transportation and sorting cost was about US$0.10 in 2H24, and its per-parcel EBIT may have growth upside in the long term.
Emerging markets: The industry is still in its infancy, and the firm's parcel volume is likely to sustain strong growth alongside the expansion of e-commerce. Frost & Sullivan projects the e-commerce retail market in emerging markets to grow at a CAGR of 19% over 2025- 2029. We expect the firm's parcel volume to remain robust, driven in part by TikTok's launch of TikTok Shop in Mexico in February 2025.
Capex to grow steadily; free cash flow to remain positive. The firm expects its capex to rise moderately to US$0.60-0.70bn this year from US$0.56bn in 2024, primarily for vehicle and automation equipment replacements, and the construction of transfer centers in core regions. The firm's free cash flow turned positive for the first time in 2024, reaching US$0.25bn, and we expect it to remain positive. We anticipate an improving competitive landscape in the Southeast Asian express delivery market this year. Costs in the China market still have room for optimization, while new markets may sustain high growth. We remain upbeat about the firm's growth potential as an international express delivery service provider.
Financials and valuation
We largely maintain our 2025 and 2026 earnings forecasts. The stock is trading at 18.8x 2025e and 12.3x 2026e P/E. Maintain OUTPERFORM. We maintain our target price at HK$8.00, implying 27x 2025e and 17x 2026e P/E, offering 42% upside.
Risks
Resurgence in competitive landscape; disappointing growth in demand; policy headwinds overseas; rising fuel and labor costs.
