The Zhitong Finance App learned that CICC released a research report stating that it maintained Manbang Group (YMM.US)'s “outperforming the industry” rating, and considering that commission progress was better than expected, the 2024 profit forecast remained unchanged at 3,569 billion yuan, and raised the 2025 profit forecast by 5% to 4.856 billion yuan. Taking into account the steady growth in the company's performance, the target price was raised 11% to $12.2.

The main views of CICC are as follows:

1Q24 profit exceeds market expectations

The company announced 1Q24 results: revenue of 2,269 billion yuan, +33% year over year; non-general standard net profit of 756 million yuan, +47% year over year, all exceeding unanimous market expectations, mainly due to continued increase in platform user size, order fulfillment and commission monetization.

Among them, online service revenue was +61.5% YoY to 691 million yuan (starting this quarter, the company changed the name of the original online commission revenue to include the same city business revenue from the original calculation of Freight Yellow Pages and the online commission business, with online commission revenue +68.4% compared to the original scale); freight brokerage revenue +24.9% YoY to 965 million yuan; and Freight Yellow Pages revenue +6.7% YoY to 214 million yuan.

1Q24 adjusted operating profit +78% YoY to 485 million yuan, corresponding to adjusted operating margin +5.4ppt to 21.4%; adjusted net profit +47% YoY to 756 million yuan, corresponding adjusted net profit margin +3.1 ppt to 33.3% year over year. 1Q24 operating data: MAU of shippers reached 2.14 million, +22% year over year. The bank believes that the increase mainly comes from 688 shipper members and non-members; the number of fulfilled orders reached 39.3 million, +30% over the same period last year.

The bank believes that the digital penetration rate of the freight industry has increased, and as a leading platform company, the company will continue to record high growth.

According to data from the Ministry of Transport, the bank measured the cumulative truck traffic volume on the 1Q24 Expressway +2.94% year over year, and +3.05% since May. The bank believes that demand in the freight industry has been growing steadily since the beginning of the year, benefiting from the increase in the digital penetration rate of the industry. The number of orders fulfilled by 1Q24 companies is +30% year-on-year, continuing the high growth trend.

The bank believes that Manbang Group will continue to record high growth as the industry pursues cost reduction and efficiency by providing more cost-effective services to shippers, reducing drivers' waiting time, reducing price increases for intermediaries, and effectively improving industry efficiency. Even after incorporating the influence of 2Q23's high base, the bank believes that 2Q24 can still achieve a high increase of more than 25% in the number of orders fulfilled by 2Q24 companies.

Looking back, the bank believes that the core driving force for the company's revenue and profit growth is the commission business, and it is expected that the company's profit margin will continue to increase under operating leverage.

The company's 2Q24 revenue guide is expected to be +28.3% to 26.5-2.72 billion yuan, continuing the steady growth performance guide. The bank expects the company's revenue to grow by more than 25% year over year in 2024, and the company's fulfillment orders are expected to grow 28% year-on-year under the dual drive of customer acquisition growth and improved fulfillment rates. The bank expects the share of higher gross margin membership fees, commissions and value-added services revenue to continue to increase. It is expected that 2Q24 will achieve an adjusted net profit of over 950 million yuan. In addition, the company announced the latest repurchase dividend plan in March to enhance shareholder returns. The bank expects the future dividend ratio to be no less than 25%.