Guotai Haitong: Giving the First "Holding" Rating to J&T EXPRESS-W(01519), a Global Logistics Dark Horse.

Guotai Haitong released a research report stating that it is the first time to cover J&T EXPRESS-W (01519), with a target price of HK$12.60 and a "buy" rating. J&T EXPRESS-W has achieved rapid expansion from Southeast Asia to the global market through its highly flexible regional agent system. The Southeast Asia region has become a profit cornerstone, with profit improvement in the Chinese region, and emerging markets are expected to build a second growth pole. Guotai Haitong's main points are as follows: Rapid expansion from being a market leader in Southeast Asia to becoming a global comprehensive logistics operator covering 13 countries through its highly flexible regional agent system. Since its establishment in Indonesia in 2015, the company has rapidly risen to the top of the region for several years with its unique regional agent model. Subsequently, the company entered the Chinese express delivery market in 2020, breaking into the highly competitive market through acquisitions such as Longbang Express, Best Express China business, and SF Express Fengwang. This significantly enhanced its network capabilities and market share, leading to a listing on the Hong Kong Stock Exchange in 2023. At the same time, the company continues to expand into new markets such as the Middle East and Latin America, forming a global network covering 13 countries. Southeast Asia has laid the foundation for the company's profits, with the growth in parcel volume driven by emerging e-commerce platforms. The improving macroeconomic environment and the prosperous development of the e-commerce market in Southeast Asia support the accelerated growth of the express delivery business in the region. The allocation mechanism of designated logistics service providers for e-commerce platforms has led to an oligopolistic competitive landscape in the industry, with the intensification of the Matthew effect. Currently, the impact of e-commerce self-built logistics on the company's performance is nearing its end, and the rise of TikTok has significantly increased the company's business volume, maintaining its industry-leading market share for several years. China's anti-"involution" measures restart, driving the company's market share to stabilize and optimize revenue structure. With mergers and acquisitions integration and the dividend of social e-commerce, the company has rapidly increased its market share in the Chinese market, currently ranking fifth in the industry. As market share stabilizes, the company actively optimizes its customer structure and product structure, leading to a significant improvement in profitability. Under the anti-"involution" measures, the company's revenue growth has returned to around 10%, and market share and gross profit margins continue to improve steadily. Rapid growth in new market business volume, significant improvement in company profitability. With the accelerated overseas expansion of e-commerce platforms, the company actively expands its cooperation with leading e-commerce platforms to solidify its market share. As the network carrying capacity in new markets strengthens and economies of scale become apparent, the pressure on the cost side continues to be released, laying the groundwork for a second growth curve in profits. Risk warnings: Resurgence of price wars, slower than expected growth in business volume, significant increase in labor costs, fluctuation in oil prices.