STO(002468) 华创证券·2024-08-29 11:45Investment Rating - The report assigns a "Buy" rating to the company for the first time, with a target price of 10.78 CNY, representing a 27% upside from the current price of 8.47 CNY [1][3]. Core Insights - The report highlights that the transformation factors within the company are translating into positive performance, and the industry's trend towards "anti-involution" is expected to enhance the company's earnings elasticity [1][4]. - The company has regained its leading position in terms of parcel volume growth, with a year-on-year growth rate of 35.2% in 2023, surpassing the average growth of its peers by 13.2 percentage points [1][13]. - The report emphasizes the importance of volume as a foundation for the company's operations, supported by the direct operation of transfer centers and increased capital investment to enhance capacity [1][5]. Summary by Sections Business Volume as a Foundation - The company has consistently led the industry in parcel volume growth since 2023, with a significant reduction in market share gap compared to its competitors [1][12]. - The support for this growth comes from the increase in the direct operation of transfer centers and substantial capital investments aimed at boosting capacity, with a projected capacity increase of 19%, 20%, and 25% from 2022 to 2024 [1][5][22]. Positive Cycle of Volume and Profitability - The company is achieving a positive cycle of volume, cost, and profit, with a notable turning point in single parcel net profit since Q1 2022, ending a period of losses [1][28]. - Free cash flow turned positive in 2023, marking the first time since 2018 that the company has restored its cash-generating ability [1][5]. Industry "Anti-Involution" Trend - The report notes that the industry is moving towards "anti-involution," which is beneficial for the earnings elasticity of express delivery companies [1][5]. - The competitive strategies of major companies are shifting, with a focus on service quality and a slowdown in capital expenditure, laying the groundwork for industry optimization [1][5]. Investment Recommendations - The report forecasts the company's net profit for 2024-2026 to be 8.6 billion, 12.7 billion, and 15.8 billion CNY, representing year-on-year growth rates of 152%, 48%, and 24% respectively [1][5]. - The target price is based on a projected price-to-earnings ratio of 13 times for 2025, leading to a target market value of 16.5 billion CNY [1][5].