Introduction to this report:
From March to April, the single ticket income of express delivery will fall seasonally. The profit recovery goal of express headquarters is firm, and the decline is expected to be rational and restrained. In 2022, the competition stage of the express industry slows down, the profit recovery is determined, and the performance in the first half of the year is expected to grow rapidly.
Summary:
The first quarter is the traditional off-season of the express industry, and the average daily volume before and after the Spring Festival is significantly lower than the normal level.
The impact of the Spring Festival holiday makes the single day express delivery volume from January to February fluctuate in a saddle shape, which generally starts to decline around the 20th of the twelfth lunar month, remains low from New Year's Eve to the sixth day of the lunar new year, and gradually recovers from the seventh day of the Lunar New Year. E-commerce and express delivery have "not closed for the Spring Festival" for two consecutive years, promoting a significant increase in the volume of express delivery during the Spring Festival holiday. The average daily volume of express delivery during the Spring Festival holiday (New Year's Eve to the sixth day) in 2022 is six times higher than that in the same period in 2019, but it is still only 20% of the average daily volume in 2021. The dislocation of the Spring Festival led to a year-on-year increase of only 3% in the express volume of the whole industry in January 2022. It is expected that the year-on-year growth rate in February will pick up. According to our estimation of comparable caliber, the express delivery volume increased by 25% year-on-year from January to early February, still maintaining a rapid growth.
Summary of seasonal laws in the first quarter: the two-stage price strategy in the off-season will reduce the single ticket income in March.
Looking back on the past few years, the fluctuation of single ticket income of express enterprises in the off-season from January to April presents two stages: (1) the increase of single ticket income from January to February: during the low volume of pieces during the Spring Festival holiday, the low utilization rate of production energy and holiday employment lead to high single piece cost. Express enterprises generally hedge part of the cost pressure by raising prices. (2) From March to April, the single ticket revenue fell: during the recovery period of the number of pieces after the festival, the single piece cost fell, and express companies often adopt certain price strategies to increase the off-season volume in order to improve the off-season profitability. The cumulative decline from March to April in the past normal years was about 0.2-0.4 yuan / piece. In January 2022, the single ticket income of express enterprises generally increased, and Yuantong / Yunda increased by 0.12/0.18 yuan / piece respectively, which is basically in line with the seasonal law. Considering that the first half of February is still in the off-season, the single ticket income in February is expected to remain stable. It is expected that the single ticket income will begin to decline seasonally in March.
The off-season price strategy is not a price war. It is expected that the single ticket income will fall from March to April, which is rational and restrained. The decline of single ticket income in December 2021 makes the market worried about the resurgence of price war. We think it is in line with the seasonal law and better than we expected. The market may confuse off-season price strategy with price war, which have opposite expectations for profit margin. The former is the short-term price flexible adjustment generally carried out by express enterprises in the off-season in pursuit of the best economic production capacity, hoping to improve the profit margin. The latter is that leading enterprises take the initiative to lower the profit margin in order to open the share gap. If there is no regulatory intervention, there may even be an irrational price war below the cost. According to recent research, the profit recovery goal of head enterprises is firm. We expect that the price decline from March to April will be rationally restrained, and the single ticket income center will remain stable.
In 2022, the competition stage of the industry slowed down, the performance in the first half of the year was high, and the growth could be expected to maintain the increase of holdings. Guojun transportation has proposed to increase its holdings since the end of August 2021. The ranking risk of non leading enterprises under industry supervision has decreased. Since September, the fundamentals have continued to improve, catalyzing the first wave of valuation repair. Recently, the market may be excessively worried about the resumption of the price war. Considering the continuous release of regulatory signals and the endogenous demand for network stability, we maintain the judgment of phased slowdown of industry competition in 2022 and determine the profitability.
It is expected that the performance in the first half of 2022 will be high and the growth can be expected, which is expected to drive the second wave of valuation repair. Maintain the "overweight" rating of Zhongtong express, Yto Express Group Co.Ltd(600233) , Yunda Holding Co.Ltd(002120) , and benefit the target S.F.Holding Co.Ltd(002352) .
Risk warning. Consumption is down; Excessive regulatory intervention; E-commerce capital affects the risk of industry pattern.
