J&T Express - H: Initiate at OW: Share price reflects excessive pessimism, but growth and margin inflection in sight

Research evidence excerpt

J&T Express - H: Initiate at OW: Share price reflects excessive pessimism, but growth and margin inflection in sight

50% net profit CAGR over FY25-28E (vs. sector 15–20%). (65) 6882-1303

ranjan.x.sharma@jpmorgan.com

• A scalable, platform-neutral model is driving share gains and margin J.P. Morgan Securities Singapore Private Limited

expansion, with Southeast Asia remaining the core profit engine but

Mufan Shi

New Markets now a real growth lever. The company aggregates volumes (852) 2800-8502

across all major e-commerce and social commerce platforms, supporting mufan.shi@jpmorgan.com

34.4% market share in SEA (FY25) and double-digit volume growth in New J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

Markets. While investors have worried about yield erosion in a maturing Morgan Broking (Hong Kong) Limited

SEA market, J&T’s cost leadership and ability to diversify into higher- Neil Zhang

margin, non-platform business are supporting margin resilience. Meanwhile, (852) 2800-8598

New Markets (Brazil, Mexico, Middle East) have reached a profitability neil.zhang@jpmorgan.com

inflection, with volumes doubling Y/Y and market share rising, showing the J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

China/SEA playbook is working globally. Morgan Broking (Hong Kong) Limited

Beatrice Lam

• Profitability inflection is driving robust free cash flow and a clear (852) 2800-8738

commitment to shareholder returns. J&T’s disciplined investment in beatrice.lam@jpmorgan.com

automation and network buildout is now translating into strong operating J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

leverage and margin expansion across all regions. As the asset base matures, Morgan Broking (Hong Kong) Limited

capex is trending toward 4–5% of revenue, supporting a step-change in FCF