This report combs and answers the five hot issues concerned by investors in the e-commerce express sector one by one, so as to clean up the market noise.
On the whole, our core view is that the value restoration of e-commerce express is about to enter the most essential profit restoration stage, which is expected to bring high flexibility. We are optimistic about the leading A-share e-commerce express Yunda Holding Co.Ltd(002120) , pay attention to Yto Express Group Co.Ltd(600233) with the steady progress of digital transformation, and Zhongtong Express, the absolute single profit leader listed in US stocks, Canada and Hong Kong stocks.
Key investment points
How to view the current level and stage of value restoration? The value restoration of three-level and two-stage e-commerce express can not be generalized. Three levels should be distinguished, corresponding to two stages. E-commerce express value repair is divided into three levels: 1) gradually tightening policy control, 2) price returning to a reasonable range, and 3) bottom reversal of profit repair. In the second and third quarters of this year, with the introduction of policies, prices have gradually returned to a benign trend. After the policy control and price return, they are about to enter the most essential level of value restoration, that is, the level of profit restoration. Accordingly, we judge that the previous stock price trend has reflected the first stage of repair (reflecting the two levels of policy control and price return), and the follow-up will enter the second stage of repair (reflecting the third level, namely profit repair).
How to classify and promote the price rise in the early stage? Price rise is divided into three categories. The price rise of e-commerce express can not be generalized. On the whole, the price adjustment is divided into three types: 1) the price is restored from below the cost line to above the cost line, 2) the end delivery fee is increased and the front-end transmission is paid to the package, and 3) the price rise in the peak season of traditional express. The first type of price increase belongs to regional price increase, which can bring profits to the headquarters and franchisees; The second kind of price increase belongs to national price increase, which mainly brings franchisees' profits; The third kind of price increase belongs to national price increase, which can bring profits to the headquarters and franchisees.
How to continue to deduce the price in the short, medium and long term? In the short term, the absolute range is still after the price increase. The resumption in 2018-2020 shows that after the peak season of e-commerce promotion and express delivery in the fourth quarter, the unit price of e-commerce express tickets generally fell month on month, but the overall price is still higher than that before entering the peak season. We believe that after the peak season, even if the price decreases marginally month on month, the absolute increment still exists, which is still expected to bring profit thickening.
In the medium and long term, the cost is driven, and the overall optimism is to maintain stability. Looking forward to 2022, after the pricing power returns to the leader again, we remain optimistic about the industry price. If based on the extremely cautious attitude, even if the apparent ticket unit price falls next year, our judgment will be driven by the single ticket cost, then the industry will still return to the positive cycle of "scale - single ticket cost - unit price", and the leading profit will still take the lead.
How to predict future profits and performance? From the logic of price risk narrowing to performance side, the operating gross profit dominated by single volume, unit price and single ticket cost reflects the essence of profit. The growth of single volume scale combined with the repair of single ticket profit is expected to bring high elasticity of leading profit with bottom reversal:
1) Single volume side: according to the "14th five year plan" for the development of comprehensive transportation services, the average annual growth rate of express orders in China is expected to be 15.4% from 21 to 25, superimposing the trend of resource integration to the leader, and it is expected that the head single volume will have an excess high growth rate.
2) Unit price side: the price increase range in the short term is still maintained compared with the off-season. The regulatory environment superimposes the leading tone in the medium and long term. We are still optimistic about the unit price of express tickets.
3) Single ticket cost side: Based on the three drivers of high increase of single volume, scale effect, gradual matching of annual trough and flat production, and high decline of capital expenditure, the cost of leading single ticket express delivery is expected to further decline in the future.
What is the long-term pattern of the express industry? Steady state profit space the price war of American Express Industry in the 1980s-1990s brought us the following three enlightenment: 1) the essence of industry pricing power should be in the hands of leaders; 2) if the integration among enterprises does not have synergy, it will lead to share spillover; 3) after the share of the industry pattern is steady, the profitability is stable.
Looking forward to the long-term pattern of China's express industry: 1) at the path level, we expect the industry to digest backward production capacity through benign competition, and the remaining leading players to form their own optimal share based on the balance of scale, profit and service demands, and maintain a steady state; 2) At the result level, we expect that in the final steady state, the retentees already have a strong single volume scale and express network effect. Therefore, on the one hand, the single ticket cost continues to decline, on the other hand, the promotion of product service stratification strategy (very low marginal cost) is expected to bring significant excess profit thickening.
Risk warning: the effectiveness of the policy is not as expected; Deterioration of express price war; The growth of physical online shopping fell.
（ Zheshang Securities Co.Ltd(601878) ）
