Yamato: raised J&T EXPRESS-W(01519) to "Buy" rating, raised target price to 11 Hong Kong dollars.

Yamato released a research report stating that the earnings per share estimate for J&T EXPRESS-W (01519) for the years 2025 to 2027 has been raised by 7% to 11%, to reflect an increase in parcel volume forecast in Southeast Asia to 65%, and a downward adjustment in parcel volume forecast in China to the mid-single digits. The rating has been upgraded from "hold" to "buy" for two consecutive levels, as growth in Southeast Asia and new markets is defensive amid the uncertainty of Sino-US trade; the target price has been raised from 10 Hong Kong dollars to 11 Hong Kong dollars. The report states that in the third quarter, J&T's total parcel volume increased by 23% year-on-year to 7.677 billion, with outstanding performance in parcel volume in Southeast Asia, which grew by 78.7% year-on-year to approximately 2 billion, exceeding both management and the bank's expectations. The bank believes that the express delivery market in Southeast Asia has entered a new development stage due to intensified platform competition and market share consolidation. Taking into account J&T's market positioning and competitive cost structure, it is believed that the company can have an advantage in the growth phase. In addition, in the third quarter, J&T's parcel volume in China and other new markets increased by 10.4% and 48% year-on-year, respectively. In the Chinese market, with the industry driving against internal competition, the average price improved on a quarterly basis in the third quarter, but the growth of parcel volume in the industry slowed down, also pushing up unit costs within the period. Therefore, the management maintains a neutral to slightly optimistic view on the annual domestic business. Considering J&T's continuous optimization of its domestic customer structure, the bank maintains a cautious view on the impact of anti-internal competition actions on profitability.