HK Stock Market Move | J&T EXPRESS-W(01519) has increased by nearly 3%, with strong growth in Southeast Asian business. There is still room for further reduction in unit costs.

J&T EXPRESS-W(01519) rose by nearly 3%, reaching 1.73% at the time of drafting, reporting 6.46 Hong Kong dollars, with a turnover of 1.4 billion Hong Kong dollars. Bank of America Securities released a research report stating that J&T EXPRESS-W's market share has reached 30%, and its subsidiary Shopee's business volume in Indonesia is unlikely to affect performance guidance for the 2025 fiscal year. Additionally, J&T EXPRESS is expanding its network in East Java Province, Indonesia, and its cost structure may be lower than that of e-commerce platforms' self-operated logistics. As the average selling price decreases, J&T EXPRESS has the ability to lower unit costs, and its level of automation is higher than other countries in Southeast Asia. Bank of America Securities stated that Indonesia, with a population of 280 million, is J&T EXPRESS's most profitable region in Southeast Asia. The bank believes that its non-platform business volume potential is considerable. J&T EXPRESS is continuing to expand its sales team and promote standardized, low-cost small drop-off points (with the goal of reaching 10,000 points by the end of this year). J&T EXPRESS management mentioned that the average selling price in Indonesia decreases by 12% annually, but J&T EXPRESS is able to achieve efficiency improvements, leading to a 10%, 15%, and 14% annual decrease in transportation, sorting, and delivery costs respectively. The bank believes that J&T EXPRESS's overall capacity utilization in Southeast Asia is 70%, and there is still room for further reduction in unit costs. In addition, Bank of America Securities has adjusted J&T EXPRESS's net profit forecast for the 2025 to 2026 fiscal years by 0% to 4%, mainly based on higher business volume growth in the Southeast Asian market after a strong first quarter, as well as the potential for slight positive EBITDA from new markets due to the launch of TikTok Shop in Brazil in May and Mexico in February.