Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Headline numbers for ZTO in Q224 were +10% Revenue, +12% EBITDA</li>
<li>But gross margin in core express segment fell, as did Operating Cash Flow</li>
<li>ZTO left guidance unchanged for FY24; we recommend investors AVOID it</li>
</ul>


Headline numbers for ZTO in Q224 were +10% Revenue, +12% EBITDA
But gross margin in core express segment fell, as did Operating Cash Flow
ZTO left guidance unchanged for FY24; we recommend investors AVOID it


ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>J&amp;T achieved net profit of US$31mn in 1H24, a substantial improvement from a loss of US$264mn / US$168mn in 1H/2H23.</li><li>On the back of on-track cost reduction trend in both SEA and China, we now see a more visible path to achieve sustainable profitability.</li><li>We revise up our 2024E/25E recurring after tax profit forecast by 12%/7%.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

J&amp;T achieved net profit of US$31mn in 1H24, a substantial improvement from a loss of US$264mn / US$168mn in 1H/2H23.On the back of on-track cost reduction trend in both SEA and China, we now see a more visible path to achieve sustainable profitability.We revise up our 2024E/25E recurring after tax profit forecast by 12%/7%.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

J&T Express (1519 HK) - More Visible Path to Achieve Profitability; U/G to BUY

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>LKNCY US: The drink "Tengyun American" coffee package jointly launched by Luckin and "Black Myth: Wukong" game was sold out in its first day （/）</li>
<li>1519 HK/ZTO US: Weekly parcel volume grew ~29% y-o-y (+)</li>
<li>Consumer Industry update:China's Retail Industry Prosperity Index moderate rebound in August, mainly from offline retail recovery. (+)</li>
</ul>


LKNCY US: The drink "Tengyun American" coffee package jointly launched by Luckin and "Black Myth: Wukong" game was sold out in its first day （/）
1519 HK/ZTO US: Weekly parcel volume grew ~29% y-o-y (+)
Consumer Industry update:China's Retail Industry Prosperity Index moderate rebound in August, mainly from offline retail recovery. (+)


[Blue Lotus Daily]:LKNCY US/1519 HK/ZTO US/BZ US/1810 HK/981 HK/AAPL US

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Even after the 28% surge in share price since the 1H24 result, <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> still deserves a look as fundamentals have improved, especially with better cost control.</li>
<li>JDL is riding on scale economies with higher asset utilisation. Quarterly margins have sustained an uptrend, reaching the highest levels since 1Q21 and it will continue.</li>
<li>We like its lower reliance on <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> and net cash of HK$2.83/share (28% of the share price). There is a massive upside in consensus forecasts too.</li>
</ul>


Even after the 28% surge in share price since the 1H24 result, JD Logistics (2618 HK) still deserves a look as fundamentals have improved, especially with better cost control.
JDL is riding on scale economies with higher asset utilisation. Quarterly margins have sustained an uptrend, reaching the highest levels since 1Q21 and it will continue.
We like its lower reliance on JD.com (9618 HK) and net cash of HK$2.83/share (28% of the share price). There is a massive upside in consensus forecasts too.


JD Logistics (2618 HK): There Are More Rooms

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Hang Seng Index Committee its slow move (lack of movement) towards 100 names and sector rebalancing to tech and healthcare. This is really disappointing.</li>
<li>This time? We get nothing. No name changes. Some capping flows. 6 FAF changes. </li>
<li>Minimal flows on the HSI rebalance to be effective on 9 September. </li>
</ul>


The Hang Seng Index Committee its slow move (lack of movement) towards 100 names and sector rebalancing to tech and healthcare. This is really disappointing.
This time? We get nothing. No name changes. Some capping flows. 6 FAF changes. 
Minimal flows on the HSI rebalance to be effective on 9 September. 


Hang Seng Index Sep24 Rebal - No Name Changes, Some Capping, 1% One-Way Flow - Total 0️⃣🍔

Hong Kong

J&T Global Express Limited operates as a global logistics service provider. The Company offers road express delivery, air express transportation, supply chain warehousing, and other value added services. J&T Global Express conducts business in China, Philippines, Malaysia, Thailand, Vietnam, and other countries.

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J&T Global Express (1519 HK)

ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

ZTO's headline Q224 numbers look OK, but they don't paint an accurate picture of what's happening in the core express segment. We suggest investors...

Tracking Traffic

J&T Express (1519 HK) - More Visible Path to Achieve Profitability; U/G to BUY

J&T achieved net profit of US$31mn in 1H24, a substantial improvement from a loss of US$264mn / US$168mn in 1H/2H23.

CMB International

[Blue Lotus Daily]:LKNCY US/1519 HK/ZTO US/BZ US/1810 HK/981 HK/AAPL US

Luckin and "Black Myth: Wukong" game's coffee collaboration sells out in first day, parcel volume grows 29% y-o-y, China's Retail Industry sees...

Blue Lotus Research Institute

JD Logistics (2618 HK): There Are More Rooms

Despite a 28% share price surge since 1H24 result, JD Logistics has an improved story. Margin expansion should continue as cost control is...

Osbert Tang, CFA

Hang Seng Index Sep24 Rebal - No Name Changes, Some Capping, 1% One-Way Flow - Total 0️⃣🍔

The HSI committee promised changes to rebalance towards better sector representation and a move to 100 names. That was a couple years ago. Progress...

Travis Lundy

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52-week Range

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ZTO Express Q224 Results: Slow Top-Line Growth | Margin Compression in Core Express Business | AVOID

ZTO's headline Q224 numbers look OK, but they don't paint an accurate picture of what's happening in the core express segment. We suggest investors...

Tracking Traffic

J&T Express (1519 HK) - More Visible Path to Achieve Profitability; U/G to BUY

J&T achieved net profit of US$31mn in 1H24, a substantial improvement from a loss of US$264mn / US$168mn in 1H/2H23.

CMB International

[Blue Lotus Daily]:LKNCY US/1519 HK/ZTO US/BZ US/1810 HK/981 HK/AAPL US

​Luckin and "Black Myth: Wukong" game's coffee collaboration sells out in first day, parcel volume grows 29% y-o-y, China's Retail Industry sees...

Blue Lotus Research Institute

JD Logistics (2618 HK): There Are More Rooms

​Despite a 28% share price surge since 1H24 result, JD Logistics has an improved story. Margin expansion should continue as cost control is...

Osbert Tang, CFA

Hang Seng Index Sep24 Rebal - No Name Changes, Some Capping, 1% One-Way Flow - Total 0️⃣🍔

The HSI committee promised changes to rebalance towards better sector representation and a move to 100 names. That was a couple years ago. Progress...

Travis Lundy

Luckin and "Black Myth: Wukong" game's coffee collaboration sells out in first day, parcel volume grows 29% y-o-y, China's Retail Industry sees...

Despite a 28% share price surge since 1H24 result, JD Logistics has an improved story. Margin expansion should continue as cost control is...