CHAPTER 1

I. Introduction
J&T Express successfully operates and is engaged in package delivery and logistics. It is classified as an express
delivery company that applies technology development as its primary system for innovative advantages.

The domestic delivery service business in recent years has grown quite rapidly with the presence of various companies
in the field of shipping, which has become tough competitors for other shipping companies. Changes in technology
have brought changes to the style of life and the business world

So many people use online shopping sites to buy the things they need. Through online shopping, it is believed that
buyers can save time, money, and effort. Currently, the community has grown accustomed to shopping transactions
being done online, which provides more excellent room for package delivery companies to expand their businesses.

In this era of globalization, it is undeniable that goods delivery services are needed by individuals, organizations, or
companies. Delivery of goods (raw materials, semi-finished materials, or finished goods) that is not on time can cause
delays in the delivery of goods. This is what causes consumers to be less satisfied with the service delivery package.

This resulted in a high demand for services, which means the delivery of goods/packages such as marketing services
delivery/package. With the growing needs of the community, various forms of delivery from lightweight to heavy will
be available, as will the type of delivery of goods/packages that is available.

The tight competition in the business world, especially in delivery services, has made many companies and
entrepreneurs compete to innovate their products and services to survive. J&T Express is a company engaged in the
delivery of goods in Indonesia. J&T Express itself serves delivery throughout the interior of the city, outside the city,
and abroad. Not only that, but J&T Express also provides pick-up and delivery services quickly to consumers at the
same time. In 2019, J&T received the Top Brand Award in the Courier Service Category. This award is given for the
success of J&T as a shipping company whose services are most in demand by the public.

II. Background of the Study

J&T Express is one of Asia’s largest and most popular logistics companies that operate in Asian countries. With
thousands of operations in a day and one of the leading logistic companies in the Philippines, J&T Express provides
low rates and high-quality shipping services to Filipinos and entrepreneurs, particularly during the epidemic. J&T
Express seeks to empower and prioritize its consumers as well as its workers. Researchers will analyze the financial
performance of emerging logistics company J&T Express and, furthermore, its projected value of it in the next five
years.
III. Statement of the Problem
The problems to be recognized in determining the value of J&T Express are the performance of their services today
and in the future, the competitiveness of other emerging companies that might hinder their growth, and the status of
their financial statements and the evaluation of the company’s performance in those financial statements. The cash
flow and other economically valuable information will help the researchers determine the value of J&T Express.

Arguments:

A1: How long will J&T Express be able to continue its trend in the logistics industry based on its financial statements?

A2: What is the importance of continue serving with great accommodation and smooth transactions with the
customers?

A3: What is the essence that is needed to consider regarding the financial status of the company?

A4: How will the pandemic affect the growth of the company?

IV. Company History

J&T Express was Started in 2015 and was founded by the former CEO of Oppo Indonesia, Jet Lee, and Tony Chen,
The company takes its name from the initials of its two co-founders. J&T Express offers last-mile delivery services in
cities and provinces in Southeast Asia and China. After launching operations in Indonesia in 2015, the company
quickly expanded internationally. In 2017, it entered Malaysia and Vietnam. It started in the Philippines and Thailand a
year later before continuing to Singapore and Cambodia in 2019. Next up was China's trillion-dollar logistics industry.
It received Indonesian Top Brand Awards in 2018 and 2019.

Indonesian delivery company J&T Express has made business headlines several times over the past year. It expanded
its operations to China in March 2020 and only a month later reached a $7.8 billion valuation, according to CB
Insights, joining the Indonesian unicorn club alongside the likes of GoTo, Bukalapak, and Traveloka.

Now the company is reportedly planning to go public in Hong Kong in the first quarter of 2022. It raised an additional
$2.5 billion in November at a valuation of $20 billion, with investments from Boyu Capital, Hillhouse Capital Group,
Sequoia Capital China, and gaming and internet giant Tencent Holdings. J&T is currently the second-most valuable
tech startup in Indonesia after GoTo, which has an estimated valuation of $30 billion.
J&T Express has forged a partnership with Shopee, which strengthens its business operations and encourages it to
deliver quality services for the increasing number of online sellers and buyers in the Philippines in 2019. Next to
Indonesia, this is the second market where the leading fast-delivery company in Southeast Asia is partnering with the
e-commerce platform provider. This prospect encourages entrepreneurs to take their businesses online and contribute
to the growing number of local e-commerce businesses.

After a video went viral of workers throwing packages in 2020, J&T Express Philippines stated that it would sanction
personnel involved in mishandling the packages. A similar video showing J&T Express Indonesian workers also
circulated on the internet in 2019. Media Konsumen, an Indonesian consumer complaints platform, received multiple
letters addressing complaints about faulty sorting and a lack of transparency and accountability in J&T Express
delivery tracking, resulting in their packages being lost or sent to the wrong delivery address.

On February 4, 2021, videos of protests and rioting at J&T Express Malaysia warehouses circulated on Malaysian
social media channels. J&T subsequently issued a statement saying that the incident had resulted from a
misunderstanding about bonus payments and not from a pay cut, as previously alleged online. The following week, the
incident was attributed to an extra workload combined with employee payment concerns by the Ministry of Human
Resources. Several workers also recorded an apology video to J&T Express and customers, stating that there are no
wage issues or deductions between the company and employees of J&T Express Perak.

V. Significance of the Study

This study is to foresee and provide further data and insights in deciding the value in terms of operational success and
market competitiveness, as well as the evaluation of the financial statements.

The public and investors will assess the company's profitability using this study over the following years. They can
determine if it is smart to invest in the company based on financial stability, return on investment, and with regard to
operations and services.

Entrepreneurs: Existing and potential entrepreneurs may utilize the study to identify whether or not an opportunity
exists based on the financial accounts of the firm. Entrepreneurs may utilize this data to better understand the need for
a product or service and the techniques that can be employed to mitigate the company's vulnerabilities.

Consumers - With this study, the consumers will know if J&T is credible enough based on their financial statements,
which will give them a heads-up about finding an alternative company that is the same as J&T.

Investors: As a result of this study, investors will have a better grasp of the company's current position in the overall
industry based on its financial statements, which will aid them in evaluating whether or not it is profitable for them to
invest their money in a certain courier company, notably J&T Express.
Future Researchers: This study would help them be aware of J&T’s process after five years. This may also be a
reference for future researchers who intend to conduct any relevant study regarding the company.

VI. Scope and Limitations

The focus of the study will be on the financial statements that the company produces for the public. The study was
limited to the information that the company itself may provide and that is available to the public regarding J&T, a
logistics company, and it was decided to conduct the study at the National College of Business and Arts, Rizal Ave.,
Taytay Rizal.

The researchers made the decision to engage in online research as a data provider. This gave the researchers the
opportunity to understand how this application was viewed both locally and globally.

This study will not cover other problems that are not covered by the financial statements of the company.

The researchers will conduct the study from March 2023 until May 2023.
 CHAPTER 2

I. Background of Methodologies
The income-based approach is a popular method of assessing a company's valuation based on its expected future
earnings. The income-based method forecasts future earnings by evaluating a company's financial history. J&T
Express may use this approach to determine the value of its courier service. When using the income-based
approach, the following fundamental technique is followed:

Future Income Projected. J&T Express initial move will be to project its future income. This may be accomplished
by reviewing previous financial data, current trends, market conditions, and other variables that may have an
influence on future revenue.

Operating Expenses. After evaluating the expected future income, J&T Express must determine the total operating
expenditures required to generate that money. Operating expenses include salary costs, rent costs, tax charges,
marketing costs, and other expenses.

To calculate net income. J&T Express must first ascertain the overall operational costs before calculating the net
income by deducting the costs from the anticipated future revenue.

Valuation Multiple. J&T Express will need to determine a fair valuation multiple based on factors such as market
trends, industry norms, and the company's development prospects. The value multiple is sometimes calculated
using the price-to-earnings (P/E) ratio of closely similar businesses in the industry. A corporation may create an
accurate multiples analysis that delivers useful information about itself and its rivals.

Calculate the business value. To calculate the estimated business value, multiply the company's net income by the
valuation multiple. The results will offer J&T Express a general estimate of their company's value based on
predicted future revenue.

To arrive at a complete valuation, keep in mind that the income-based approach is only one method of evaluating a
corporation and should be coupled with others. J&T Express may also consider other factors that may impact its
valuation, such as market trends, competition, and legal risks.
 II. Importance of Methodology
The income-based approach methodology is a business valuation strategy that determines the value of a firm based
on its profits or income. Using the financial data, growth rate, and a discount rate of J&T Express, the income-
based technique may assess the value of an operational firm. To determine a company's profitability and financial
health, its financial statements, which comprise income statements, balance sheets, and cash flow statements, must
be examined. Because this technique gets future profits from the owner rather than utilizing similar market data,
market interactions are not necessary. This method is especially beneficial for organizations like J&T Express, a
logistics concern, where sales and profitability are significant drivers of corporate value.

J&T Express may use the income-based approach strategy to examine its financial performance, including revenue
growth, profit margins, and cash flow, to help it decide on its business plan. This technique can also help J&T
Express determine ways to generate revenue or cut expenditures in order to improve its financial performance.

This approach, which is based on a company's potential to provide future economic advantages, is often best suited
for established and successful companies like J&T Express.

Furthermore, the income-based approach strategy can provide useful insights into J&T Express's potential for
future growth, allowing the company to identify new opportunities for growth and investment. This strategy can
also help J&T Express better understand the competitive climate in the logistics sector and how to position itself for
long-term success.

Overall, J&T Express considers the income-based approach strategy to be a valuable instrument for evaluating
financial performance and making strategic company decisions. By evaluating its financial records and applying
this procedure, J&T Express may identify areas for improvement, capitalize on growth opportunities, and finally
increase its value to shareholders.
 CHAPTER 3

I. Financial Statement (base year)

Businesses use financial statements to manage their operations and to be open with their shareholders. To begin the
financial analysis process, we will examine J&T Express Incorporated's income statements, balance sheets, and
cash flows over the previous five years, from 2017 to 2022.

Income Statement:

Comprehensive Income:
Balance Sheet:
Changes in Owner’s Equity:

Cash Flow:
II. Projection in 5 years
J&T Express is an Indonesian logistics firm that offers courier and shipping services throughout Southeast Asia.
The organization has achieved substantial growth in recent years as a result of its efficient delivery services and
innovative development strategies.

Based on previous data and current trends, J&T Express may continue to experience rapid growth over the next five
years. Here are some possible elements that might help J&T Express develop in the next few years:

Through expansion into new markets. J&T Express has already grown into numerous Southeast Asian nations, and
it may continue to do so in the future. This might include nations with substantial and expanding e-commerce
marketplaces like Vietnam, Myanmar, or Cambodia.

It increased e-commerce activity. As e-commerce in Southeast Asia grows, an increasing number of consumers are
buying goods online and employing courier services to deliver them. J&T Express, which has established itself as a
dependable and fast courier service provider, is well-positioned to gain from this trend.

Technology investment. J&T Express has previously made significant investments in technology to improve its
operations and customer experience. This pattern is expected to continue as the corporation seeks innovative
methods to optimise its logistical procedures and enhance delivery times.

J&T Express may develop strategic alliances with other firms in the logistics and e-commerce sectors to broaden its
reach and client base. Partnerships with e-commerce platforms, payment providers, and other logistical
organizations might be included.

Focus on sustainability. As more consumers become environmentally sensitive, J&T Express may prioritise
sustainable practices such as lowering its carbon footprint and adopting ecologically friendly packaging materials.
This might help the firm stand out from the competition and attract clients who value sustainability.

Overall, J&T Express has a solid foundation and is well-positioned to benefit from Southeast Asia's e-commerce
boom. It is feasible that the firm may see considerable growth over the next five years if it continues to execute its
development plans and invest in technology. However, there are possible dangers and hurdles that might impede
J&T Express's growth, such as increasing competition, economic instability, and regulatory changes.

III. Graph and Analysis

Gross margin ratio

2022 = 0.368

2021 = 0.3552

2020 = 0.3456

2019 = 0.329

2018 = 0.32

2017 = 0.37

Asset turnover ratio

2022 = 0.05175

2021 = 0.04995
2020 = 0.0486

2019 = 0.04635

2018 = 0.045

2017 = 0.047

Debt to equity ratio

2022 = 6.555

2021 = 6.327

2020 = 6.156

2019 = 5.871

2018 = 5.70

2017 = 5.81

Current ratio

2022 = 1.2995

2021 = 1.2543

2020 = 1.2204

2019 = 1.1639

2018 = 1.13

2017 = 1.14
Profitability ratios provide the greatest basis for evaluating a company's ability to create profits in proportion to
income, costs, holdings, and stockholder equity. It may also demonstrate how successfully a company generates
profit and value for its owners.

Based on the graph and ratios J&T Express shows a good start on its profitability ratio and as time passes by they
manage to improve. By looking at this graph investors can say that the value of J&T is rising.

A leverage
ratio is one
of the
numerous
financial
indicators
that assess a company's ability to meet its financial obligations. A company's mix of operational expenses may also
be quantified using a leverage ratio to determine how changes in output will affect operating profitability. Too
much debt may be harmful for a company and its investors. Debt, on the other hand, can help to grow if a
company's operations provide a higher rate of return than the interest on its loans. Unchecked debt levels may result
in credit rating downgrades or worse. Having too few debts, on the other hand, may pose problems. Inability or
unwillingness to borrow may suggest that operating margins are tight.

The efficiency ratio, which varies somewhat, displays expenditures as a percentage of income; in other words, it
illustrates how much money a firm or individual spends to earn one dollar. Entities are urged to reduce their
efficiency ratios. Banks have traditionally been the receivers of the concept. The accounts receivable turnover ratio
 is a simple statistic
used to analyze a
company's efficiency
in issuing credit and
recovering debt. The
greater the ratio, the
better the business is
at managing client
credit. The firm is doing fairly well, with an obvious increase in ratio.

A liquidity ratio is used to determine if a debtor will be able to pay off their short-term debt with the cash they
already have on hand or whether they will need to seek more capital to fulfill the amount. Based on this graph
shows that J&T company is willing and able to pay its debt. With an increase in its liquidity ratio, investors have
insurance that their investments won’t go to waste.

IV. Financial Issues

Financial Issues that J&T Express has encountered from its genesis until the present, as well as its Ratio, are
noteworthy. J&T Express has encountered a multitude of fiscal predicaments since its inception, including:

Cash flow management. The enterprise needs help in optimally managing its cash flow, especially due to its
expeditious growth and investment in technology and infrastructure.

Regulatory compliance. J&T Express has confronted regulatory complications in certain areas, including Indonesia,
where it was temporarily forbidden from functioning due to claimed infringements of postal regulations.

Debt management. The firm has taken on considerable debt to finance its expansion, engendering apprehensions of
its ability to service its debt obligations.

Competition. The logistics and delivery sector is profoundly competitive, and J&T Express confronts stern
competition from entrenched players such as DHL, FedEx, and UPS, as well as burgeoning startups in the space.

In terms of financial ratios, some of the cardinal ratios for J&T Express include:

Gross Margin Ratio. J&T Express gross margin ratio for 2018 was 33.3%, implying that 33.3 cents of every 1$ of
sales were retained as gross profit.

Asset Turnover Ratio. In 2018, J&T Express' asset turnover ratio was 1.29x, demonstrating that for every 1$ of
assets, 1.29 dollars of revenue were created.
Debt-to-Equity Ratio. In 2018, J&T Express had a debt-to-equity ratio of 0.34x, signifying that for every 1$ of
equity, there were 0.34 dollars of debt.

Current Ratio. J&T Express current ratio in 2018 was 1.24x, signifying that for every 1$ of current liabilities, there
were 1.24 dollars of existing assets.

It is imperative to note that financial ratios should be interpreted in the context of the industry and the company's
particular circumstances. Consequently, investors and analysts should contemplate J&T Express financial ratios in
conjunction with other qualitative and quantitative factors when appraising the company's financial performance
and prospects.
 CHAPTER 4

Summary of findings

Over the years, J&T Express has been able to improve its asset turnover ratio, indicating an increase in revenue
generation from its assets. This positive trend may be of interest to investors who are looking for growth
opportunities. However, the company's debt to equity ratio has also been rising, indicating an increase in debt to
finance its operations. This may cause some concern as an excessive amount of debt may affect the company's
ability to meet its financial obligations, potentially resulting in credit rating downgrades.

Fortunately, J&T Express has also seen an improvement in its current ratio, indicating that it has sufficient current
assets to cover its current liabilities. This development is a positive indication to investors, as it suggests that the
company has the ability to meet its short term debt obligations. Additionally, the company's efficiency ratio has
improved, which means that it is spending less money to generate revenue. This development is also a positive
indication to investors as it suggests that the company is becoming more efficient in its operations.

Finally, the liquidity ratio has been increasing over time, indicating that the company has more cash available to
cover its short term debt obligations. This development is another positive indication to investors as it suggests that
the company is financially stable and has the ability to meet its short term financial obligations on time.

Conclusion

In conclusion, the purpose of this research was to examine the financial performance and projected value of J&T
Express, an Asian logistics company. The study sought to ascertain the company's ability to sustain its growth in the
logistics industry, to assess the significance of providing excellent customer service, to comprehend the company's
financial situation, and to assess the impact of the pandemic on its growth.

J&T Express has grown significantly since its inception in 2015, expanding its operations throughout Southeast Asia
and China. The company has won awards, including the Indonesian Top Brand Awards, and has a high valuation,
making it one of Indonesia's most valuable tech startups. It has also formed alliances with e-commerce platforms such
as Shopee, enhancing its business operations and catering to an increasing number of online sellers and buyers.

However, the study also identified some challenges and concerns with J&T Express. Mishandled packages have been
reported, as have complaints about faulty sorting and a lack of transparency in delivery tracking, which can harm the
company's reputation and customer trust. In some areas, there have also been protests and controversies over employee
pay.
This study is significant because it provides insights into J&T Express's operational success, market competitiveness,
and financial stability. It is a valuable resource for the general public, investors, entrepreneurs, and consumers to
evaluate the company's profitability, make informed investment decisions, and assess its credibility. The study has
ramifications for future researchers interested in J&T Express or related topics.

The study's scope focused on analyzing the financial statements and publicly available information about J&T Express,
limiting the research to data provided by the company itself. The research was carried out over a two-month period,
from March to May 2023.

J&T Express, a logistics company in Southeast Asia that provides courier and shipping services, valued itself using the
income-based approach methodology. This method entails projecting future income based on financial data, evaluating
operating expenses, calculating net income, determining a fair valuation multiple, and estimating the business value.

The income-based approach is especially appropriate for well-established companies like J&T Express, where sales
and profitability are important factors in determining corporate value. J&T Express can use this methodology to assess
its financial performance, identify areas for improvement, and make strategic decisions to increase its value to
shareholders.

J&T Express is also well-positioned for expansion over the next five years. The company may enter new markets,
capitalize on the growing e-commerce activity in Southeast Asia, invest in technology, form strategic alliances, and
prioritize sustainability. These factors, together with J&T Express's improving profitability ratios, indicate that the
company's value is increasing.

However, there are some potential obstacles to consider, such as increased competition, economic insecurity, and
regulatory changes. J&T Express must address financial issues such as cash flow management, regulatory compliance,
debt management, and competition from established logistics players and startups.

Financial ratios must be interpreted in the context of the industry and specific circumstances. As a result, when
evaluating J&T Express' financial performance and prospects, investors and analysts should consider qualitative and
quantitative factors in addition to financial ratios.

Overall, this study sheds light on J&T Express's financial performance and projected value, highlighting both its
accomplishments and challenges. Stakeholders can gain a better understanding of the company's position in the
logistics industry and make informed decisions about investments, partnerships, and customer choices by considering
the findings of this study. J&T Express has a solid foundation, growth potential, and an ongoing focus on improving its
financial performance, making it an appealing logistics investment opportunity.

Recommendations

• J&T Express needs to re-examine their packing and delivery system from end to end. Working attitude is
important to ensure the packages are handled in the right way. For instance, in Japan, the workers in the airport who
manage the luggage would clean the luggage and handle them with nothing but the utmost gentle delicacy. This
showed great working attitudes owned by the Japanese workers and this attitude should become a part of working
attitudes for the workers of J&T Express. Stressful and unsafe working environment or the inappropriate equipment
also could be the reason that forces workers to mishandle and damage the package. A good working environment
shall be created and the equipment should be maintained in the best working condition.
• J&T Express also needs to handle the packages with care, especially the packages which clearly stated that it is
fragile. When the packages fail to deliver, they should not throw it into the receiver’s house or send it to another
person as this would cause loss or damage to goods. The couriers should try to deliver to the receiver the next day
or ask the receiver to collect himself at designated places.

• J&T Express should enhance the performance behaviors of the employees. This recommendation could only be
made if the company requires a monthly training program for workers. The employees would gain loads of
knowledge and experience concerning the tasks or works assigned to them if the company conducts a training
program. Providing training programs to the employees will enhance their performance, and they will be more
aware of the rules and regulations inside the company. The employees could refresh their skills and knowledge
about their job. Aside from this, training programs would not just improve their skills but also their values and
behavior as mindful employees.

• Another recommendation is regarding the requirements of the applicants needed to meet when the company is
looking for new workers. Applying the Concept of Fit is essential when a company, specifically J&T Express, is
hiring and appointing new employees. And to be specific, the J&T Express should use the Person-Job Fit concept
to look for an applicant that meets their standards when it comes to intelligence, job-related skills, job knowledge,
previous work experience, and personality-related to performing job tasks.
References:
- Brealey, R. A., Myers, S. C., & Allen, F. (2017). Principles of corporate finance. McGraw-Hill Education.

- Course Hero. (n.d.). JT Annual Report 2018. Retrieved from https://www.coursehero.com/file/65328645/JT-

Annual-Report-2018pdf/

- Damodaran, A. (2012). Investment valuation: Tools and techniques for determining the value of any asset.
John Wiley & Sons.

- Fernandez, P. (2018). The value of companies: strategies, methods, and valuation principles. Academic Press.

- Hargrave, M. (2020). Valuation: Income Approach [Review of Valuation: Income Approach]

- Nikkei Asia. (n.d.). Boom or bust: The story of J&T Express in China. Nikkei Asia. Retrieved from
https://asia.nikkei.com/Business/36Kr-KrASIA/Boom-or-bust-The-story-of-J-T-Express-in-China

- Thorne, J. (ed.) (2015) J&T Express Company : Valuation & Investors, PitchBook.

Bibliography:
- Pratt, S. P., & Grabowski, R. J. (2018). Cost of capital: applications and examples. John Wiley & Sons.

- Ross, S. A., Westerfield, R. W., & Jaffe, J. (2018). Corporate finance. McGraw-Hill Education.

- Smith, J. K., & Parrino, R. (2015). Valuation: The art and science of corporate investment decisions. Pearson
Education.
-