China's civil aviation authority is not just regulating air cargo growth - it's actually engineering it.

China’s aviation regulator, the Civil Aviation Administration of China (CAAC), is pushing hard to ramp up air cargo capacity. It is building on a 2020 base of roughly 16.1 million tons, and recent levels exceeding 21.9 million tons. Even though officials haven't revealed a specific number, the regulator is anticipating a boom in cargo volumes in the next decade, with e-commerce and exports driving demand.

The International Air Transport Association (IATA) projects the global air freight market to reach approximately $230bn by 2034, growing at a CAGR of roughly 3.5% over the forecast horizon. That pace sounds steady, but it understates the shift happening underneath. Shippers care way more about speed and supply-chain backups than just cheap prices today. Moral of the story: you have to be on time.

The United Nations Conference on Trade and Development's (UNCTAD) transport and logistics outlook reinforces the same point. Cross-border e-commerce, which now drives the fastest-growing slice of air cargo demand globally, favors operators with owned infrastructure over pure freight forwarders, because the economics of the last mile cannot be optimized from the outside.

JDL, the integrated supply chain and express-delivery arm of JD Group, stands directly in the path of this structural shift. In Q1 26, JD Airlines expanded its fleet to 13 aircraft and flew its first A330 wide-body cargo service, while simultaneously opening new international routes across Southeast Asia and South Asia, including Wuhan–Bangkok and Chengdu–Delhi, precisely the corridors where, International Civil Aviation Organization's (ICAO) Asia-Pacific traffic forecasts, are most front-loaded.

Growth gaining momentum

JDL put up strong top-line growth in Q1 26, but the more interesting story is how thin the profit still is. Revenue came in at CNY 60.6bn ($8.91bn), up 29% y/y from CNY 47bn, with net profit at CNY 864.6m, rising 41.6% y/y from CNY 610.6m.

The revenue jump looks broad-based rather than a one-off event. Integrated supply chain customers grew 25.9% y/y to CNY 29.2bn from CNY 23.3bn. “Other customers” (express, freight, on-demand) rose to CNY 31.4bn, up 32% y/y from CNY 23.8bn, suggesting JDL is leaning harder into higher-frequency delivery rather than just enterprise contracts.

Profit growth is running ahead of revenue, which sounds good until you look at the base. An approximate 40% increase in earnings translates to less than CNY 300m of incremental net profit, and margin are still stuck around 1.7%, up from 1.6% in Q1 25 That’s barely any buffer for a logistics company dealing with rising labor and outsourcing costs, both of which grew above 30% y/y.

So yes, JDL is getting bigger, and slightly more efficient, helped by automation and scale. But this is still a volume game with razor-thin margins. The test is whether they can push net margin meaningfully above 2% without slowing the engine.

Bullish, yet cautious

JDL has delivered an 18.7% return over the past year, which is decent but doesn’t fully reflect in the price. The stock sits at CNY 12.1, still well below its 52-week high of CNY 16.8, suggesting investors are not willing to chase after it, despite the run-up.

That hesitation shows up in valuation too, it trades at 7.8 x forward FY 27 earnings, vs. a 3-year average of 10.6x, a clear discount tied to questions around consistency rather than growth.

Analysts are almost all in: 18 out of 19 rate it buy, with a target price of CNY 16 suggesting 33.4% upside potential. However, that upside mainly reflects the stock trading below its usual valuation. Investors aren’t ignoring it; they’re waiting for steadier profits before assigning a higher multiple.

Tread lightly

JDL is winning the volume race, and China's logistics boom gives it real runway. However, volume without margin is a fragile foundation. Rising labor costs, growing outsourcing dependency, and intensifying competition from well-funded domestic rivals all threaten to eat into the efficiency gains automation has so far delivered. Add currency exposure and geopolitical friction on its international routes, and the risks are already in the system. The story is good. The proof of the concept is still not complete.