Everbright Securities has released a research report initiating coverage on J&T EXPRESS-W (01519) with a "Buy" rating. The report highlights the company's solid foundation in its Southeast Asian operations, which benefits from the expansion of Chinese e-commerce platforms like TikTok Shop and continues to generate stable cash flow. Emerging markets, including Latin America and the Middle East, are successfully replicating the Southeast Asian growth model, positioning themselves as a secondary growth engine. Strategic improvements in the Chinese market, supported by "anti-involution" policies, are expected to boost revenue per parcel and strengthen the profit recovery trend. The brokerage forecasts adjusted net profits of $412 million, $654 million, and $867 million for 2025, 2026, and 2027, respectively, representing year-on-year growth rates of 105.8%, 58.8%, and 32.4%. As a "global growth-oriented logistics player," the company possesses a degree of scarcity value.
Key viewpoints from Everbright Securities are as follows:
A global integrated logistics service provider that rose from the Southeast Asian market. Founded in 2015, the company has built a delivery network spanning 13 countries and regions, including China, Southeast Asia, Latin America, and the Middle East. It serves as a key logistics partner for major platforms such as TikTok Shop, Pinduoduo (including TEMU), and Taobao. Achievements in 2024 include: a 28.6% market share by parcel volume in Southeast Asia, maintaining the top position; an 11.3% market share in China, ranking fifth among companies utilizing a network partner model; and a 6.1% market share in new markets.
Southeast Asia: A profitable foundation, leading the logistics sector through scale. 1) The high-growth Southeast Asian e-commerce market is driving increased parcel volume. According to Frost & Sullivan, the total parcel volume in the Southeast Asian express delivery market reached 15.98 billion items in 2024, a year-on-year increase of 25.2%. The industry's parcel volume is projected to maintain rapid growth with a compound annual growth rate of 15.2% from 2025 to 2029. 2) TikTok Shop has experienced rapid growth in the Southeast Asian e-commerce market. Its GMV surged from approximately $4.4 billion in 2022 to about $22.6 billion in 2024, representing a compound annual growth rate of 127%, elevating it to the second-largest e-commerce platform in Southeast Asia and narrowing the gap with the leading platform, Shopee. J&T and TikTok are each other's largest service provider and customer in Southeast Asia, and the growth in J&T's parcel volume is strongly correlated with TikTok Shop's expansion in the region. 3) The volume expansion and profitability improvement for J&T Express in Southeast Asia show high consistency. In the first half of 2025, the company's parcel volume in Southeast Asia increased by 57.9% year-on-year, driving a 65.4% year-on-year increase in adjusted EBIT.
New Markets: Focus on Brazil and Mexico, benefiting from the accelerated overseas expansion of Chinese e-commerce. 1) The Latin American e-commerce market offers vast potential, with TikTok Shop leading new growth. Compared to Southeast Asia and China, Latin America has lower e-commerce penetration and a more fragmented platform landscape. In recent years, Chinese e-commerce players like AliExpress, SHEIN, Temu, and TikTok have entered the Latin American market. 2) Prior to and during the first half of 2025, the majority of J&T Express's parcel volume in new markets originated from Temu and SHEIN. Following the launch of TikTok Shop in Mexico in February 2025 and Brazil in May 2025, the brokerage expects the proportion of parcels from TikTok Shop within J&T's handled volume to increase. 3) The new markets achieved a turnaround in adjusted EBITDA in the first half of 2025. The brokerage forecasts that adjusted EBIT per parcel in new markets will turn positive for the first time in the second half of 2025, reaching 9 US cents.
Fierce competition in China; "anti-involution" policies aid profit improvement. Long-standing price wars in China's express delivery industry have consistently pressured revenue per parcel. Under the "anti-involution" trend, industry competition is shifting from a "volume-for-price" approach to a high-quality development path focused on "enhancing quality and efficiency."
Risk warnings include macroeconomic and currency risks, industry competition risks, customer dependency risks, and potential losses and execution risks associated with the investment phase in emerging markets.