Increase revenue and increase profits! JD LOGISTICS (02618) achieved a third-quarter revenue of 41.7 billion yuan, once again reaching a new high for profit levels!

On November 15, JD Logistics Co., Ltd. (stock symbol "JD Logistics", 02618) released its third quarter financial report for 2023. In the third quarter, JD Logistics achieved high-quality growth in revenue and profit, with total revenue reaching 41.7 billion yuan, a year-on-year increase of 16.5%. Among them, revenue from external customers reached 29.8 billion yuan, further increasing the proportion of external customer revenue to 72%. Through the improvement of supply chain operational efficiency and cost optimization, JD Logistics achieved a new record high in profit level in the third quarter, with adjusted net profit reaching 840 million yuan, a year-on-year increase of 89%, reaching the best profit level since its listing. In the third quarter, JD Logistics continued to deepen its integration in the core track of the integrated supply chain. Based on the growth of the number of external integrated supply chain customers, the scope and depth of cooperation with existing customers continued to strengthen, further solidifying its leading position in the integrated supply chain logistics field. Among them, revenue from integrated supply chain customers reached 19.6 billion yuan. While the number of external integrated supply chain customers increased, the average revenue per customer increased by 22.7% year-on-year. Thanks to its continuous upgrading and leading high-quality service experience, JD Logistics, including express delivery and express transportation, achieved a year-on-year revenue growth of 25.7% to reach 22.1 billion yuan. Among them, the revenue growth of the express delivery business has continued to outpace the industry growth rate since 2021, and its cooperation with platforms such as Kuaishou, Douyin, and other interest-based e-commerce platforms has deepened and rapidly developed. In terms of express transportation business, JD Logistics has steadily promoted the integration with Deppon in terms of business and network, and the revenue scale of express transportation business, including Deppon, has ranked among the top in the industry. In the third quarter, JD Logistics operated over 1,600 warehouses nationwide, with a total management area of over 32 million square meters, including cloud warehouses. 95% of JD's self-operated orders achieved same-day delivery and next-day delivery. In the latest survey on express service satisfaction for the third quarter of 2023 released by the State Post Bureau, JD Express once again ranked among the first-class group with high scores and maintained its leading position in service satisfaction in the industry. With its firm commitment and unremitting efforts to create more employment opportunities and contribute to society, in the three and nine months ended September 30, 2023, JD Logistics' total human resource expenses (including its own employees and external personnel) reached 20.3 billion yuan and 59.3 billion yuan respectively. Its nationwide supply chain logistics network has become an important driver for employment. JD Logistics CEO Hu Wei stated that as China's macroeconomic recovery continues to improve and high-quality development steadily advances, JD Logistics will uphold its vision of becoming the most trusted global supply chain infrastructure service provider. It will continue to leverage its advantages in supply chain infrastructure, industry insights, and technological capabilities to create a top-notch customer experience, promote cost reduction and efficiency improvement in the industrial and supply chain, and contribute to the high-quality development of enterprises, industries, and society. External customer revenue accounted for 72%, maintaining 70% for five consecutive quarters With the improvement of the macroeconomic situation, JD Logistics' integrated supply chain solutions have been rapidly promoted and replicated among a large number of external customers. In the third quarter, the proportion of revenue from external customers further increased to 72%, reaching 29.8 billion yuan. This proportion of external customer revenue has accounted for 70% for five consecutive quarters. These external customers operate in both online and offline sales channels, with complex distribution scenarios and facing issues such as the increasing number of SKUs, large and unpredictable seasonal demand fluctuations. JD Logistics provides integrated supply chain services to help them allocate inventory rationally and reduce operational costs. In the third quarter of this year, revenue from integrated supply chain customers reached 19.6 billion yuan, and the growth rate stabilized and rebounded. The average revenue per external integrated supply chain customer increased by 22.7% year-on-year. In the third quarter, JD Logistics continued to deepen its cooperation with customers from various industries. Taking Panasonic China as an example, the two parties created the first forward and reverse integration warehouse in Wuxi, enabling direct recycling and quality inspection of returned products. Qualified goods can be directly dispatched and sold, effectively reducing the time for return processing and the additional logistics costs caused by multiple handling. Moreover, JD Logistics has also replicated its accumulated over ten years of supply chain management experience overseas. Through the combination of automation technology and operational experience, it continues to assist Chinese brands in expanding globally and provides integrated supply chain logistics services for overseas customers. Since the end of last year, JD Logistics has been providing supply chain services centered around overseas warehouses for an overseas e-commerce platform mainly focused on women's clothing. It helps the platform cope with fluctuations in order volume caused by seasonal and promotional activities and customized packaging needs of end consumers, effectively improving the fulfillment speed and customer satisfaction. Currently, JD Logistics has gradually expanded its cooperation with this customer to cover many countries in North America and Europe, further assisting its global business expansion. Leading the industry in express delivery revenue growth, continuously upgrading logistics industry service standards For many years, JD Logistics has been continuously exploring the limits of industry services, including ultra-fast delivery within 211 minutes, door-to-door delivery, and many other ultimate services. It has become the representative of the highest service standards in terms of faster speed, wider coverage, and better experience, and has been driving its strong performance growth. In the third quarter, revenue from other customers, including express delivery and express transportation, reached 22.1 billion yuan, a year-on-year increase of 25.7%. In terms of express delivery business, JD Logistics' revenue growth has remained higher than the industry growth rate in each quarter since 2021. This is partly due to JD Express's focus on customer experience, continuous strengthening of product capabilities, and leadership in setting express delivery service standards. Through deep cultivation of different scenarios and technological empowerment, it continuously upgrades the industry's service standards for express delivery.To improve overall network efficiency and customer experience.JD Logistics has always been known for its high-quality door-to-door delivery service. In October this year, JD Express further strengthened its delivery service and expanded it to the collection process. It introduced the "1-hour period for unclaimed items" and "compensation for delivery exceeding time limits" as well as the "compensation for failed delivery" service commitments, allowing consumers to enjoy the convenience of doorstep service for both receiving and sending items. JD Express has also brought its high-quality express delivery service to Hong Kong and Macau by opening multiple express operation centers in these areas, achieving full self-operation and operational optimization of express delivery services in Hong Kong and Macau. After the service upgrade, the fastest same-city delivery in Hong Kong can be achieved within 4 hours, and the delivery time extends to 10 pm. Thanks to its high-quality service experience, JD Logistics has achieved continuous penetration and rapid development in cooperation with platforms such as Kuaishou and Douyin. During the Kuaishou E-commerce 11.11 Shopping Festival, JD Logistics once again became the official logistics partner, providing high-quality delivery services such as door-to-door delivery for Kuaishou merchants, ensuring that both merchants and consumers can have peace of mind. Furthermore, JD Logistics has pioneered the "delivery, installation, disassembly, and collection" worry-free service for home appliances, covering almost all administrative regions in China. During this year's JD 11.11 Shopping Festival, JD Logistics upgraded its furniture service to an integrated worry-free service that includes "delivery, installation, disassembly, collection, and repair," making it the first logistics company in China to achieve a "five-in-one" service for furniture. In addition, JD Logistics has also introduced the "delivery and installation" service for JD Service+ new energy charging piles, becoming the first to achieve nationwide coverage. In addition, JD Logistics, including Deppon, is one of the leading players in the express delivery industry in terms of revenue scale. Currently, JD Logistics is steadily advancing its collaboration with Deppon in terms of business and network, continuously strengthening the integration and cost reduction of resources in terms of site and routes. Over 95% of JD's self-operated orders will have same-day or next-day delivery, and the supply chain network will cover major countries worldwide in the next 3 years. Currently, JD Logistics has built one of the largest warehousing networks in China. As of September 30th, JD Logistics operates over 1,600 warehouses nationwide, with a management area exceeding 32 million square meters, including cloud warehouses. It can allocate resources reasonably in different regions according to the sales and turnover characteristics of various products, helping customers optimize inventory layout, improve inventory turnover, and achieve efficient fulfillment. In the third quarter of this year, JD Logistics managed over tens of millions of SKUs, continuously reducing inventory turnover days while supporting an increase in self-operated business volume. During the recently concluded JD 11.11 Shopping Festival, with over 380 million consumers participating in JD's live broadcasts, JD Logistics formulated reasonable stocking plans and replenishment plans based on the live streaming schedule in order to ensure efficient order fulfillment, reducing cross-regional shipments and improving delivery efficiency. As a result, more than 1,500 districts and counties and 95% of JD's self-operated orders were delivered within half a day, the same day, or the next day. This year also marks the tenth year of operation for JD's Asia No.1 Intelligent Industrial Park. Prior to JD's 11.11 Shopping Festival, the Lanzhou park officially opened for operation, equipped with a leading high-speed automation matrix in the industry. With the help of hybrid code reading technology, the sorting accuracy reaches 99.9%. Same-day delivery is achieved within Lanzhou City, and the delivery time in Gansu Province is improved to same-day or next-day delivery. With the operation of the park, a "Beidou"-like pattern is formed in the northwest region, together with hundreds of central warehouses, satellite warehouses, and sorting centers in five provinces, creating a multi-faceted logistics warehousing and distribution network and further upgrading the digitalization of logistics infrastructure in the five northwestern provinces. Looking globally, JD Logistics has been continuously expanding its global network with overseas warehouses as the core. Currently, JD Logistics has nearly 90 bonded, direct shipping, and overseas warehouses worldwide, with a total management area of nearly 900,000 square meters. JD Logistics has already established overseas warehouses in 15 countries and regions, including the United States, Germany, the Netherlands, France, the United Kingdom, Australia, the Middle East, and Southeast Asia. Based on this foundation, JD Logistics plans to build a global supply chain logistics network covering major countries worldwide in the next three years, including overseas warehouse networks, international transit hubs, domestic distribution networks in overseas countries, and cross-border trunk transportation networks. To further expand cross-border transportation and overseas domestic express delivery businesses, JD Logistics reached a strategic cooperation with Geopost, an international express delivery company under La Poste Group, in the third quarter of this year, jointly building international express delivery services covering Central Europe and improving delivery efficiency in multiple European countries. In addition, in September this year, JD Airlines launched the first international freight route from Shenzhen to Ho Chi Minh City, providing cross-border logistics services for small and medium-sized cross-border e-commerce businesses, and accelerating the construction of a global air freight network. Currently, JD Airlines has successfully opened multiple international routes and achieved cross-airline intermodal transfers through cooperation with international airlines such as Vietnam Jetstar and Saudi Arabian Airlines. Currently, JD Airlines' Shenzhen departures can reach destinations such as Melbourne, Sydney, Delhi, Mumbai, and Brisbane. While strengthening its infrastructure capabilities, JD Logistics also attaches great importance to technological innovation and is adept at providing technological support through the development and application of cutting-edge technologies to achieve refined management, precise allocation of operational resources, and better customer service. With long-term and stable technological investments, JD Logistics' "trinity" technology competitiveness in software, hardware, and system integration continues to upgrade. Its technology products cover various operational aspects of logistics and have self-perceiving, self-learning, and self-decision-making abilities, enhancing the system's forecasting, decision-making, and intelligent execution capabilities, promoting high-quality growth for both itself and its customers. Continuously consolidating smart logistics new infrastructure to promote high-quality employment and provide emergency support to serve the real economy. In the third quarter of this year, JD Logistics ranked among the top national infrastructure construction companies.Expanding its technological innovation capabilities to develop cutting-edge technologies has enabled JD Logistics to provide precise management, accurately allocate operational resources, and better serve its customers. With long-term and stable technological investments, JD Logistics has continuously improved its competitiveness in software, hardware, and system integration, covering various aspects of logistics operations. Its technology products have self-perceiving, self-learning, and self-decision-making capabilities, enhancing the system's forecasting, decision-making, and intelligent execution abilities, promoting high-quality growth for both itself and its customers. JD Logistics has also been committed to promoting high-quality employment and providing emergency support to serve the real economy.JD Logistics actively undertakes social responsibilities by establishing intelligent logistics infrastructure, and continues to play an important role in protecting people's livelihood, stabilizing employment, and promoting income growth, as a private enterprise.From July to August this year, floods and other water disasters occurred in many parts of the country. JD LOGISTICS urgently deployed national inventory and transportation resources to deliver various production and living materials to places like Beijing, Tianjin, and Hebei. They also provided voluntary transportation services for local disaster relief supplies. At the same time, JD LOGISTICS has launched special support measures for the Zhaizhou book industry, opening up many warehouses to help local book businesses quickly transfer and reduce losses. August is also the time when new plums are on the market in Jiashi, Xinjiang. This year, JD LOGISTICS and the government have jointly upgraded the smart supply chain center for new plum production areas. After local grading and pre-cooling storage, the plums are stored in storage in other provinces such as Shaanxi. As a result, transportation costs are reduced by 20%, and the "Fruits from Xinjiang" delivery time is shortened by one day, allowing consumers to taste higher-quality plums while helping local fruit farmers increase their income. At the same time, the first Shenzhen Agricultural Products Group intelligent warehouse in Tibet was put into use in Linzhi, allowing local specialty products such as Lingzhi mushrooms, Tianma herbal medicine, honey, and apples to be stored nearby and quickly distributed nationwide through JD LOGISTICS' warehouse and distribution network, creating a logistics channel for the production and sales integration of Tibetan products. This year, JD LOGISTICS and Lianyungang Port in Jiangsu Province have jointly established the first county-level smart logistics port in Jiangsu, becoming an important e-commerce and logistics distribution center for Guangnan County and surrounding areas. Today, the "Guannan model" has become a vivid practice of JD LOGISTICS assisting local economic development and achieving the transition from "logistics supporting the economy" to "industry-based economy." At the same time, JD LOGISTICS' nationwide intelligent logistics infrastructure has become one of the key drivers of high-quality employment. As one of the few logistics companies that sign formal labor contracts and contribute to social insurance and housing provident fund for frontline employees, JD LOGISTICS actively plays a role in stabilizing employment in private enterprises and drives more workers to achieve high-quality employment. In the first three quarters of this year, JD LOGISTICS' total human resource expenses reached 59.3 billion yuan, and its nationwide supply chain logistics network has become an important means of employment. In the third quarter alone, JD LOGISTICS' frontline employee salary and benefits expenditure reached 13.9 billion yuan, a year-on-year increase of 23.9%. In September this year, JD LOGISTICS organized a trip abroad for frontline models, with more than 100 frontline employees and their families from all over the country participating. This is also the largest event since the program started in 2013. The improved salary and benefits guarantee allows frontline employees to work "peacefully" and also enables them to develop a strong sense of professional responsibility and identification with the company. "The needs of the community residents are always the top priority," is the principle that Feng Yubin, a JD Express deliveryman, has reminded himself since he started working. At the end of April last year, Feng Yubin set up a temporary booth at the entrance of a sealed-off residential area to deliver goods. He didn't go home for six days and nights. His dedication was noticed and appreciated by the residents, who sent him clothes and meals. Good service not only brings warmth and feedback from the residents to Feng Yubin but also builds long-lasting trust and two-way effort. In August this year, when Feng Yubin learned that he was selected as the "most beautiful deliveryman" in Beijing, the residents of the residential area spontaneously voted for him. Surprised, Feng Yubin also felt more motivated. "Since everyone recognizes me, I must provide better service in order not to let them down." For many years, JD LOGISTICS has always rooted itself in the vast real economy, adhering to the vision of becoming the most trusted supply chain infrastructure service provider in the world, and continuously creating value for customers, industries, and society. In the future, JD LOGISTICS will continue to leverage the integrated advantages of digital and physical supply chains, and maximize the positive role of private enterprises in stable growth, promoting innovation, and increasing employment, to promote high-quality development of the real economy.