BOCOM INTL: Maintains "Buy" rating on JD LOGISTICS (02618) with a target price of HK$18.

BOCOM INTL released a research report stating that it maintains a "buy" rating for JD LOGISTICS (02618), and has raised its fourth quarter revenue forecast for 2024 by 2%, with the new forecast corresponding to an 8.6% year-on-year growth. The company's previous resource inputs have driven revenue growth, and it is expected that the adjusted net profit margin will maintain its upward trend year-on-year. The target price is HK$18. The bank predicts that JD LOGISTICS will see a 9% year-on-year increase in revenue for the whole year, with an adjusted net profit margin of 4.2% (company guidance is 3-4%). It is also expected that the effects of the company's previous resource inputs on revenue growth will continue in 2025, the integration of Taobao will bring additional growth, and there is still room for replication and promotion of efficiency optimization in operations, leading to a stable and positive overall profit trend. The report estimates that JD LOGISTICS' revenue in the fourth quarter of 2024 will increase by 8.6% year-on-year to RMB 51.25 billion, showing an accelerated growth compared to the 6.6% year-on-year growth in the third quarter. This increase reflects the company's efforts to expand its market share in professional markets and the growth stimulus from previous investments such as shipping and airline routes. The trend of growth in the integrated supply chain business is consistent with the third quarter, with robust growth in express and freight services. Additionally, BOCOM INTL predicts that the adjusted net profit in the fourth quarter will increase by 10% to RMB 2 billion, which is 16% higher than the market expectation of RMB 1.7 billion. This corresponds to an adjusted net profit margin of 3.9%, showing a stable and upward trend year-on-year. The company's optimization of rental and transportation outsourcing continues to benefit from refined operations, and while achieving its annual performance growth target, the company maintains a more flexible pricing strategy and increased investment in incentives for personnel.