Key investment points:
1. From the perspective of observing the profits of industries and enterprises, A simple framework for analyzing the logistics industry is profit = single piece profit * piece quantity= (single piece revenue – single piece cost) * piece quantity. Starting from the analysis of this framework, we believe that the industry inflection point has appeared in 2021, the industry piece quantity will maintain growth in 2022, and the single piece profit is expected to move up systematically. The three links and one Da represented by China communications will still maintain its advantage of low cost and benefit from the price rise process of the industry. With the phased end of the peak of capacity investment , SF is also expected to usher in configuration opportunities in 2022.
2. The industry will maintain high growth in 2022, and the number of pieces above designated size is expected to exceed 130 billion, with a year-on-year growth rate of nearly 20%. From 2017 to 2020, the market scale of live broadcast e-commerce industry is RMB 19.6 billion, RMB 135.4 billion, RMB 433.8 billion and RMB 961 billion respectively. The three-year growth rate of market scale is as high as 49 times. The drainage and driving effect of live broadcast e-commerce on express delivery will be more obvious. It is estimated that the total volume of industrial parts is expected to maintain growth in 2022 and 2023, and the CAGR from 2020 to 2023 is 15.73%. The total market share of SF and Tongda enterprises in 2020 is 72.13%, which is expected to increase to 83.74% by 2023. If the price of the industry increases by 0.1 yuan, the industry is expected to increase revenue by nearly 15 billion yuan by 2023.
3. Benefiting from the inflection point of policy supervision, the industry price war will come to an end temporarily. From the perspective of express head enterprises represented by Yuantong and Yunda, the single ticket price has stabilized and turned up. The latest unit prices of Yuantong, Yunda and Shentong were 2.29 yuan, 2.17 yuan and 2.11 yuan respectively. Yuantong and Yunda increased by 0.44% and 1.4% respectively month on month, and Shentong was flat month on month. Among them, Yunda has increased month on month for four consecutive months, the price upward trend is obvious, and the vicious price war situation of the industry has been reversed. It is expected that the single ticket price center of the industry will be higher than that in 2021, and the single ticket price will rise in the peak season and fall steadily in the off-season.
4. The single ticket cost will continue to decline. In 2020, the single ticket cost of SF will be 15.83 yuan / piece, with the highest cost. From high to low, Tongda is Yuantong > Shentong > Yunda > Zhongtong, which are 2.51 yuan / piece, 2.45 yuan / piece, 2.14 yuan / piece and 1.14 yuan / piece respectively. The leading enterprises of “three supplies and one access” benefit from the continuous high capital expenditure and scale effect, and will obviously benefit from the price rise of the industry. SF’s production capacity investment cycle is closely related to the trend of capital market. The starting point of this round of new investment is the middle of 2020. We expect that the end of this round of investment may come in the first quarter of 2022. In 2022, with the continuous release of input capacity, SF will usher in a good opportunity for configuration. From the perspective of PE / pbbands in the express industry, the current industry valuation has reached the low level during the epidemic in 2020, and the configuration value has gradually become prominent.
5. Cost reduction and efficiency increase is still the theme of China’s logistics industry. From the development path of overseas leading logistics companies, the scale effect can significantly reduce the express cost, and the express order quantity is negatively correlated with the single piece cost. In the process of enterprise express expansion, merger and reorganization is an important strategy for expansion. FedEx, DHL and other leading enterprises in the world have undergone a large number of mergers and acquisitions, which has great reference significance for the development of Chinese express enterprises.
Valuation and investment advice:
Express is the highest quality asset in China’s logistics industry. When buying express, first, buy deterministic industry space, and second, buy the management of excellent enterprises. The best quantitative indicator of management is the single ticket cost. The final outcome of the medium and low-end express market will be ranked according to the cost control ability.
In the long run, only enterprises with a stable balance sheet and excellent financing ability can carry through the development stage of clearing out the express industry. It is recommended to pay attention to the single volume leader Zhongtong express and the relatively underestimated Yunda Holding Co.Ltd(002120) ; In terms of direct marketing, as SF’s capacity investment is approaching the end of this period, the gradual release of capacity will be successively ushered in in 2022. It is strongly recommended to continue to pay attention to S.F.Holding Co.Ltd(002352) of network extension and barrier upgrading under the broad layout of traditional + emerging business formats.
Risk tips:
The epidemic has worsened, the price war in the industry has intensified, the growth rate of e-commerce has declined, franchisees have managed and controlled risks, and labor costs have risen sharply
