1、 From the perspective of capital cycle, China Express: two cycles and two tracks
Capital cycle is the periodic change of industry capital allocation that continuously affects the return on investment. Due to the industry attribute of heavy assets and high operating leverage, China's express industry is a typical industry with re offer value from the perspective of capital cycle. Since 1993, business express demand and e-commerce express demand have erupted one after another. Therefore, the industry has experienced two relatively complete large capital cycles, and divided into two major tracks: medium and high-end and medium and low-end.
2、 Medium and high-end capital cycle (1993-2012): the rise of SF, the leader of aging parts
The capital cycle of medium and high-end express delivery has entered the stage of stable competition pattern and rate of return. Fourth, SF's leading position is clear. The direct marketing system and leading aviation resources have helped SF lay the foundation of time effective service, build a deep moat in the time effective parts track, and establish a leading position for nine years through the high conversion cost formed by brand, aviation resources, network effect and diversified products.
Leading advanced, SF diversified development towards the road of comprehensive logistics. After 2015, SF started multi business layout. Under the guidance of the brand, the growth of new business is very strong, and its scale gradually exceeds the upper limit of the synergy effect of aging big network in 2020. In order to meet the rapid expansion demand of comprehensive logistics business, SF started the large capital expenditure cycle again, and 2021 became the starting point of SF's capacity climbing.
3、 Medium and low-end capital cycle (2007 to present): the dawn of e-commerce express industry has arrived
The capital cycle of medium and low-end express is in the position of switching from stage three to stage four, the supply side is improved, and the industry return is expected to rebound. The outbreak of e-commerce express after 2007 has become an opportunity for the transformation of franchise enterprises. It has experienced several periods, such as attracting a large influx of capital with high returns, increasing competition among new entrants and the opening of the vicious price war of scale first. After the integration of Jitu Baishi, the Cr5 of the industry has been close to 80%.
The supply side is the core variable in the new stage. We should grasp the investment opportunities brought by its changes. Since May 2021, under the background of stricter policies, the effectiveness of price strategy has gradually declined, the capital expenditure of head enterprises has stopped expanding, and the e-commerce express industry has begun to switch to the development stage of high revenue growth and low capital expenditure growth. Under the new development stage, the improvement of supply will promote the restoration of enterprise profitability and the recovery of industry investment return.
4、 Investment advice & Risk tips
E-commerce express buying pattern: e-commerce express is in the position of three-way and four-way switching in the capital cycle stage. The volume and price of head enterprises have increased together and the cost has improved. It is in the rising channel of roe. The e-commerce express buying pattern is an investment strategy with strong certainty and flexibility next year. In terms of profit margin, under policy protection, the industry competitive environment has been optimized, and the repair of enterprise profit margin has begun. In terms of turnover rate, in 2022, the capital expenditure of head enterprises stopped expanding, and the asset turnover rate also returned to the rising channel. In terms of subject matter, Yto Express Group Co.Ltd(600233) , Zhongtong express and Yunda Holding Co.Ltd(002120) are strongly recommended.
Comprehensive logistics layout: time effective business Express is in the fourth stage of the capital cycle, and the leading Shunfeng has built a deep moat. At present, SF is in the investment period of diversified layout, and high revenue growth coexists with high capital expenditure. With SF moving from brand synergy to business synergy, the capacity utilization rate is rising, while the new business is mature and gradually begins to make profits. SF is optimistic about the profit and market value growth space under the comprehensive logistics layout for a long time.
Risk tips: the risk of intensified price war, the risk that the industry prosperity is less than expected, the risk of M & A caused by upstream and downstream integration, the risk of regulatory policy changes, the risk of warehouse explosion of express franchisees, the risk that the growth rate of aging parts is less than expected, the risk that cost optimization is less than expected, the risk of intensified competition in middle and high-end racetracks, the risk that the performance of recommended companies does not meet expectations The Chinese express industry is not completely comparable with the overseas express industry, and the relevant data are for reference only
