Debon (603056) in-depth tracking report-successful transformation and accelerated growth

Debon (603056) in-depth tracking report-successful transformation and accelerated growth

The company has upgraded its large-scale express delivery, and its express revenue / piece volume has reached a CAGR of 86% / 95% in the past three years.

Expected Debon Express shipment volume and revenue compound growth rate (CAGR) 35 in the next 3 years?
The certainty of 40% growth is high, and the gross margin of the express delivery business has rapidly increased to nearly 10%. It is expected that the space for improvement in the next two years is still sustainable, and it is worth looking forward to 15%.

The company’s performance is highly flexible, with 1pc increase in gross profit margin and increasing non-net profit up to 40%.

Debang’s large-scale express revenue has reached 20 billion, and it has re-established the market structure.

Benefiting from the increase in the online penetration of large goods and the trend of small-ticket express delivery, the size of the large express delivery 重庆耍耍网 industry in 2018 increased by about 30% to 2000 trillion, and the CAGR of the industry is expected to remain 25% in the next 3 years.

And the large-scale express delivery industry is showing intensive and large-scale development.

Debang Express entered large-scale express delivery earlier in 2013, with obvious first-mover advantages. At present, it has the industry’s first position, and its revenue has reached 20 billion, which has already transformed its market share.

In 2018H2, express delivery grew faster than 70%, accelerating growth, and expected to double revenue growth.

In 2013, the company entered the large-size express market from the less-than-truckload industry. With more than 20 years of deep-learning operation experience, a direct management model with a change in network management and control capabilities, and an excellent management team, the company climbed to the top of the large-scale express delivery industry.The CAGR of express delivery revenue / piece volume over the past three years has been as high as 86% / 95%.

In 2018, the company announced a comprehensive transformation of large-scale express delivery, accelerating the capital investment and network layout of express delivery.

In the second half of last year, the company’s express delivery volume increased by 71%, an increase of 16pcts compared with the first half of the year.

The volume of express delivery has increased, and the gross profit growth rate under neutral and optimistic assumptions can reach 61% and 96%.

Piece volume: Combined with the industry’s future growth rate forecast of 25% and the company’s continuous improvement and expansion, it is expected that Debon Express’s shipment volume CAGR in the next 3 years is expected to reach 35?
40%.

Price: Due to the large incremental space in the large-scale express delivery industry and the large share of stock, the price competition is less fierce.

At the same time, the company’s courier is positioned in the mid-to-high-end express delivery, and the price has fluctuated steadily in the past few years.

Cost: Driven by continuous refinement management, technological R & D expansion, scale effect and other factors, the company’s costs have continued to decline, and the gross margin of express delivery has increased from 2014 to 9% last year.

3%.

Under the assumption that the gross profit rate of express delivery will increase by 3pcts and the volume will increase by 50% in 2019, the gross profit of express delivery will increase by 96% after the calculation, and the overall gross profit growth rate will increase from 20% to 38%, a significant acceleration.

High performance elasticity, 1pc increase in gross profit margin and increase non-net profit by 40%. Double click is worth looking forward to.

The company currently deducts non-net interest rate is only 2%. If the overall gross profit margin is increased by 1pc, it will directly increase the deduction of non-net profit by about 40%.

Complying with the low revenue base in 2018 and the continuous high growth of the express delivery business, the company’s revenue growth rate in 2019 is expected to return to about 25%.

Taking into account the subsequent gross margin improvement potential of the express delivery business and the acceleration of revenue growth, the company’s future performance is relatively high, and the certainty is high. The performance and expected revenue are worth looking forward to.

Risk factors: the risk of competitive pressure on express and express delivery; the risk of rising costs such as labor and oil prices.

Investment suggestion: The company has succeeded in upgrading and maintaining its courier service, its revenue structure has been transformed, economies of scale have been released, its revenue has accelerated, and its profitability has increased to drive rapid performance growth.

We raise the company’s EPS forecast for 2019/20/21 to 0.

92/1.

25/1.

69 yuan (previous forecast was 0.

92/1.

16/1.

41 yuan), corresponding to the current expected PE of 24/17/13 times, taking into account the company’s expected annual average net profit growth rate of 30% in the next 3 years, the current PE is 30 times, and the company’s gross margin improvement has a large elasticity for performance.The company’s performance may be contradictory beyond expectations. After our calculation, we believe that the company’s estimate is underestimated and a target price of 27 is given.

7 yuan, maintain “Buy” rating.