J&T Express's 1H26 revenue and profit beat expectations; Nomura maintains Buy rating and HKD14 target price

Overview

This report reviews J&T Express's 1H26 results. Nomura believes the company's revenue, adjusted EBIT, and adjusted net profit all exceeded expectations, mainly driven by pricing improvements in China and growth in overseas parcel volumes and market share. It therefore maintains its Buy rating and HKD14.00 target price.

Core views

J&T Express's 1H26 total revenue increased 40% YoY to USD7.7bn, 7% and 5% above Bloomberg consensus and Nomura's forecast, respectively. Nomura attributes the revenue beat to two factors: first, amid increasingly rational competition driven by China's “anti-involution” policy, average revenue per parcel (ARPP) in the China market was better than expected; second, ARPP in Southeast Asia declined more slowly than expected, partly supported by higher fuel prices. This indicates that performance growth was driven not only by parcel volume expansion but also by improved pricing in China and resilient overseas pricing. By region, 1H26 revenue in Southeast Asia reached USD3.0bn, 6% above market consensus. Parcel volume increased 71% YoY, while market share rose 5.3 percentage points YoY to 38.1%, more than offsetting a 10% YoY decline in ARPP. Revenue from other markets increased 99% YoY to USD722mn, in line with consensus; parcel volume increased 1.2x YoY, market share rose 2.7 percentage points to 8.9%, and ARPP declined 9%. Revenue from the China market increased 22% YoY to USD3.8bn, 7% above consensus; parcel volume grew 10%, market share increased 0.5 percentage points to 11.6%, and ARPP rose 12%. All three regions gained market share, but their growth profiles differed: China benefited primarily from increases in both volume and price, while Southeast Asia and other markets relied mainly on strong parcel volume growth to offset lower revenue per parcel. Profitability improved faster than revenue. Adjusted EBIT increased 1.2x YoY to USD434mn, 6% and 1% above Bloomberg consensus and Nomura's forecast, respectively. Nomura believes this was mainly due to higher ARPP in China, which strengthened local profitability. Blended EBIT per parcel increased 77% YoY to 2.5 US cents, already above the company's previous full-year guidance of 2.4 US cents. Management remains optimistic about gradual improvement in unit profitability, with one driver being the rising share of parcels from non-China markets, which have higher unit profitability. Adjusted net profit also increased 1.2x YoY to USD351mn, 32% and 5% above Bloomberg consensus and Nomura's forecast, respectively. The company raised its FY26 capex forecast from USD700-800mn to USD800-900mn, with spending focused on sorting automation, last-mile delivery automation, vehicle upgrades, and artificial intelligence, primarily in Thailand, Vietnam, Brazil, and selected hubs in China. The increase in capex reflects continued investment in overseas business expansion and operational upgrades, but whether unit profitability improves as management expects will still depend on the actual effectiveness of automation, cost optimization, and changes in the business mix. Regarding shareholder returns, the company repurchased 99mn shares in 1H26 for HKD889mn, representing a 0.9% buyback yield. On June 25, the company also approved a new share repurchase plan of up to HKD2bn. In terms of valuation, Nomura maintains its Buy rating and HKD14.00 target price. The target price is primarily derived using 18x FY26F EV/EBIT and also implies 24x FY26F P/E, based on FY26F EPS of USD0.0753; at the time of publication, the stock was trading at 17x FY26F P/E. The stock's benchmark index is the Hang Seng Index, and Nomura's Buy rating indicates that it expects the company to outperform this benchmark over the next 12 months.

Analysis framework

Nomura first compares the company's total revenue with Bloomberg consensus and its own forecast, then breaks down revenue by China, Southeast Asia, and other markets, using parcel volume, market share, and ARPP to explain the sources of growth in each region. The report then assesses how revenue growth translates into profit through adjusted EBIT, EBIT per parcel, and adjusted net profit, before evaluating operating and capital allocation priorities in conjunction with capex, automation investment, and share repurchases. Finally, it derives the target price using an FY26F EV/EBIT multiple and presents the valuation using FY26F P/E.

Methodology notes

• Industry/Sector Analysis FrameworkVolume-Price Breakdown

  Parcel Volume and Average Revenue per Parcel Breakdown

  The report decomposes revenue changes in each region into parcel volume and ARPP to distinguish whether growth is driven by business volume expansion or price changes, while also using market share to illustrate competitive outcomes.

• Valuation Method

  EV/EBIT Valuation

  Nomura derives its HKD14.00 target price primarily using 18x FY26F EV/EBIT, measuring the company's value based on the multiple of enterprise value to operating profit.

• Valuation MethodPE/PEG valuation

  FY26F P/E Comparison

  The report notes that the HKD14.00 target price implies 24x FY26F P/E, while the stock was then trading at 17x FY26F P/E, based on FY26F EPS of USD0.0753.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• J&T Express (1519.HK)

  The core covered asset in this report; 1H26 revenue and profit exceeded expectations, jointly driven by improved ARPP in China and overseas parcel volume growth.

  Strengths

  Market share increased YoY in China, Southeast Asia, and other markets; China ARPP rose 12%; blended EBIT per parcel increased 77% YoY; non-China markets have higher unit profitability.

  Weaknesses

  ARPP in Southeast Asia and other markets declined 10% and 9% YoY, respectively, while the FY26 capex forecast was raised to USD800-900mn.

  Comparison

  Total revenue was 7% above Bloomberg consensus, adjusted EBIT was 6% above consensus, and adjusted net profit was 32% above consensus.

  Risks

  Intensifying market competition, slower-than-expected parcel volume growth, weaker-than-expected cost optimization, and country-specific regulatory risks.

Key data

• 1H26 Total RevenueUSD7.7bnUp 40% YoY, 7% above Bloomberg consensus and 5% above Nomura's forecast
• China Market RevenueUSD3.8bnUp 22% YoY and 7% above consensus; parcel volume increased 10% and ARPP increased 12%
• China Market Share11.6%Up 0.5 percentage points YoY
• Southeast Asia Market RevenueUSD3.0bn6% above consensus; parcel volume increased 71% and ARPP declined 10%
• Southeast Asia Market Share38.1%Up 5.3 percentage points YoY
• Other Markets RevenueUSD722mnUp 99% YoY and in line with consensus; parcel volume increased 1.2x and ARPP declined 9%
• Other Markets Market Share8.9%Up 2.7 percentage points YoY
• Adjusted EBITUSD434mnUp 1.2x YoY, 6% above Bloomberg consensus and 1% above Nomura's forecast
• Blended EBIT per Parcel2.5 US centsUp 77% YoY, above the company's previous full-year guidance of 2.4 US cents
• Adjusted Net ProfitUSD351mnUp 1.2x YoY, 32% above Bloomberg consensus and 5% above Nomura's forecast
• FY26 Capex ForecastUSD800-900mnPrevious guidance was USD700-800mn
• 1H26 Share Repurchase99mn shares, HKD889mnRepresenting a 0.9% buyback yield; a new repurchase plan of up to HKD2bn was also approved
• Target Price ValuationHKD14.00Based on 18x FY26F EV/EBIT, implying 24x FY26F P/E and FY26F EPS of USD0.0753
• Current Valuation17x FY26F P/ETrading valuation at the time of publication as stated in the report

Impact & implications

Nomura believes the 1H26 results demonstrate that J&T Express is benefiting simultaneously from improved pricing and profitability in China and from higher parcel volumes, market share, and business mix contribution in overseas markets. A higher share of non-China business is expected to support gradual improvement in unit profitability, while the capex increase means the company will continue expanding its operating capabilities through investments in automation, vehicle upgrades, and artificial intelligence. The earnings beat and ongoing share repurchases jointly support Nomura's maintained Buy rating and HKD14.00 target price.

Risks

• Intensifying market competition could hinder achievement of the target price.
• Parcel volume growth may be slower than expected.
• Cost optimization may be less effective than expected.
• Country-specific regulatory risks may arise in different operating markets.

What to watch

• Monitor the competitive environment in China and whether ARPP improvement can be sustained.
• Monitor changes in parcel volume, market share, and ARPP in Southeast Asia and other markets.
• Monitor whether a higher share of parcel volume from non-China markets can drive gradual improvement in unit profitability.
• Monitor FY26 capex and the implementation progress of automation, vehicle upgrade, and artificial intelligence projects.
• Monitor the execution of the new share repurchase plan of up to HKD2bn.