Yto Express Group Co.Ltd(600233) (600233)
Event: Yto Express Group Co.Ltd(600233) released the operation data announcement in November. In November, the revenue of express products was 4.512 billion yuan, a year-on-year increase of + 27.35%; Business completed 1.745 billion tickets, a year-on-year increase of + 13.38%; The single ticket income of express products was 2.59 yuan, a year-on-year increase of + 12.33%.
In November, the unit price rose by 30 cents month on month, the price increase was considerable, and the price ecology was better. In November, the unit price of Yuantong headquarters was 2.59 yuan, Year on year + 0.29 yuan (+ 12.3%), up 0.3 yuan month on month (+ 13.1%), the increase of unit price is considerable. Considering that the price of express will rise every year in the double 11 peak season, the unit price of Yuantong will rise by 0.16/0.16 yuan month on month compared with November 2019 / 2020. This year’s price increase is significantly higher than that in the past two years, reflecting that the current price ecology of the company has shown obvious signs of improvement and still maintains a good price after the double 11 peak season; and the company may be in production Make leading improvements in product structure.
The certainty of substantial improvement in short-term performance is strengthened, and 2022 has high performance flexibility. We believe that the substantial improvement of Q4 company’s performance in the short term is highly certain: 1) the price increase in the peak season in November is expected to significantly improve the single ticket profit after excluding the rise of costs and distribution fees. 2) According to the continuous tracking of our industry terminals, the terminal price in December is basically stable compared with that in November, while the same period last year has entered the fierce price competition after the peak season. Therefore, December is expected to reflect a higher price year-on-year improvement. Looking forward to 2022, we believe that under the policy supervision, the shift of leading business strategy and the demand for high-quality development of the industry, the price is still expected to rise further, and the performance elasticity is large under the high volume base.
The growth rate of parts fell in November, mainly affected by the base and the slowdown of e-commerce consumption, focusing on the company’s business strategy and product structure optimization. The volume of Yuantong in November was + 13.38% year-on-year (growth rate was -6.08pts month on month), and the decline in volume growth was expected: 1) the growth base of Yuantong was high for many consecutive years, and the growth rates of Yuantong in November 2019 and 2020 were 32.03% and 42.5% respectively; 2) the consumption of upstream e-commerce in peak seasons decreased, and tmall’s “double 11” Gmv increased by 8.5% year-on-year in 2021 (with a growth rate of 26% in the same period last year). At present, e-commerce consumption is plagued by periodic weak growth. However, considering that there is still room to improve online penetration and emerging e-commerce platforms are rising, we believe that the long-term sustainable growth of e-commerce express is still uncertain; at the same time, the company is conducting customer screening and product structure optimization under the new competitive environment, which will bring a healthier volume structure 。
The inflection point of the industry is gradually clear and optimistic about the long-term leading value of the company. After years of high industry growth and fierce price competition, the industry concentration has gradually increased, but we also observed that the effectiveness of the price war is decreasing, the decline of single ticket cost is narrowing, at the same time, the terminal price is abnormal, the profit of each brand express ecological chain is eroded, and the network stability is damaged. Strong policy supervision is only a catalyst to guide the industry to accelerate out of price competition and enter a new stage of high-quality development. After the shift of leading business strategies, we are optimistic about the long-term value of Yuantong. China’s express delivery industry is a long-distance race track with large volume and outstanding growth. Yuantong’s clear strategic planning, leading digital ability and stable and strong logistics network will create leading value.
Investment suggestion: with the upward movement of the price center, the company’s profits are expected to improve significantly in 2021q4 and 2022. From a medium and long-term perspective, under the background of continuous improvement of online penetration, the demand growth of the express industry is uncertain, and service will become a new competitive factor. We are optimistic about the company’s digital ability, continuous improvement of service and fine management, and prominent leading value. Considering that the current price performance is higher than expected, we raised our profit forecast. It is expected that the net profit attributable to the parent company from 2021 to 2023 will be RMB 18.5/28.0/3.43 billion respectively, corresponding to 32 / 21 / 17 times of the current share price PE, maintaining the “Buy-A” rating.
Risk tip: the demand for e-commerce parts is less than expected, the price competition in the industry is less than expected, and the rigid costs such as oil price, labor and rent are rising.
