On August 16th, the leading company in large-parcel express delivery, Deppon Express (603056.SH), saw its stock price rise after the market opened, with the highest increase exceeding 7% during the trading session.
The previous day, Deppon Express released its semi-annual report for 2024, reporting dual growth in both operating income and net profit for the period.
In August of this year, the domestic express delivery market reached a new milestone—the monitoring data from the State Post Bureau showed that as of August 13th, the volume of express delivery services in China this year has surpassed 10 billion pieces, reaching the 10 billion mark 71 days earlier than in 2023. Especially in the second quarter, the profitability of some express delivery companies has been restored on a quarter-over-quarter basis.
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According to the financial report, in the first half of this year, Deppon Express achieved an operating income of approximately 18.446 billion yuan, a year-on-year increase of 17.54%; it achieved a net profit attributable to the shareholders of the listed company of approximately 333 million yuan, a year-on-year increase of 37.08%. In terms of performance in a single quarter, in the second quarter, the company achieved an operating income of approximately 9.151 billion yuan, a year-on-year increase of 10.58%; it achieved a net profit attributable to the shareholders of the listed company of approximately 240 million yuan, a year-on-year increase of 41.07%.
Compared with the first quarter, although Deppon Express's revenue in the second quarter decreased on a quarter-over-quarter basis, its net profit increased by 158.77% on a quarter-over-quarter basis. Some securities analysts attribute this to the performance of the company's fast freight business.
The 21st Century Economic Report noted that, according to the main product structure, Deppon Express's express delivery business and fast freight business achieved operating incomes of 1.073 billion yuan and 16.625 billion yuan respectively in the first half of this year, a year-on-year decrease of 23.90% and an increase of 21.13% respectively. Among them, the fast freight business, as the main growth driver, achieved an operating income of 8.262 billion yuan in the second quarter, a year-on-year increase of 13.60%. "This is mainly due to the company's continuous improvement in the quality of pick-up and delivery services, promotion of product innovation and operational model transformation to meet the diversified needs of customers. At the same time, the steady progress of the network integration project has jointly promoted the further growth of the scale of the fast freight business." Guojin Securities believes.
As the world's largest LTL (Less-Than-Truckload) logistics market, China's market competition is particularly fierce. A McKinsey report shows that the domestic LTL market has a scale of 1.5 trillion yuan, facing structural transformation and upgrading, and is striding into the "integration period" of the stock market.
In the first half of this year, the core fast freight business (excluding full-truck business and network-integrated fast freight business volume) achieved a volume of 6.0336 million tons, a year-on-year increase of 7.67%. In addition, the network integration project with JD.com is also enhancing the scale of Deppon Express's fast freight network—since the second half of 2023, the company has taken over some assets of 83 transfer centers of JD Logistics through asset acquisition.
The financial report shows that as of the first half of 2024, Deppon Express's business covers 93.73% of the townships, with 144 straightened main routes, 48 automated equipment sites, and the main business damage rate decreased by 28.3% year-on-year.
It is undeniable that since JD.com took over Deppon Express, the latter has indeed enjoyed the synergistic effect brought by the former's network resource supply. This has also led to an expansion in the scale of related transactions between the two parties—In 2024, Deppon Express increased its cooperation with various business segments of JD Group, and the amount of related transactions for providing labor services to JD Group, JD Technology, and their controlled enterprises is about 7.8 billion yuan, a year-on-year increase of 114%, of which about 2.65 billion yuan was actually incurred in the first half of the year.It is worth mentioning that recently, JD.com has completed the final piece of the "puzzle" in taking over the shares of Debon.
On August 1st of this year, Debon announced that JD.com Zhuofeng has recently acquired the remaining shares held by the original actual controller, Cui Weixing, in Ningbo Meishan Free Trade Port Area Debon Investment Holding Co., Ltd. (hereinafter referred to as Debon Holding), approximately 2.558 million shares, accounting for about 2.7249% of the total share capital. As of July 31st of this year, the aforementioned shares have completed the transfer registration procedures, and Debon Holding officially became a wholly-owned subsidiary of JD.com Zhuofeng.
The equity structure shows that as of the first half of 2024, Debon Holding directly held approximately 683 million shares of Debon, accounting for 66.50% of the total share capital.