American Express 4000-word in-depth research report

$American Express(AXP.US)$Visa(V.US) $Mastercard(MA.US) Research on American Express shows that it is not a traditional payment company, but a "premium financial services platform" focusing on high-end customer groups, with both card issuance and payment networks.
🎯 It operates global high-end credit card issuance and payment network services, acting as both a card issuer and a network operator, with 80% of its revenue coming from the US, competing through differentiation with "high-end customers + high fees + low bad debt".
🔍 Its moat comes from its century-old "premium service" brand (low customer churn rate), high switching costs of embedded benefits in high-end cards, and the closed loop of "high-spending customers - high-value merchants".
💰 Revenue relies on three pillars: annual fees (25%, with gross margin close to 100%), merchant discount fees (1.5%-3.5%, higher than peers), and interest and loans (30%).
📈 Excellent financial quality: ROE over 30% in the past five years (34.7% in 2024), gross margin over 80%, net margin of 13.7% in 2024; revenue grew by 8.98% and net profit by 21% in 2024, with guidance for 8%-10% growth in 2025, mainly driven by increased spending from existing high-value customers; positive free cash flow for consecutive years, FCF/net profit over 1.1; debt-to-asset ratio of 89% is industry-specific, with interest-bearing debt at only 20.6%, showing robust liquidity.