Core view
[market performance] from March 7 to March 11, the CSI 300 index closed at 430652, down 1.06% in one week and 12.83% year to date; The Shanghai Composite Index closed at 330975 points, down 1.87% in one week and 9.07% year to date; Among shenwanyi industries, power equipment, food and beverage, medicine, biology and other sectors performed better, among which the transportation industry fell by 2.14% in the week, ranking ninth; Since the beginning of the year, the transportation industry has decreased by 3.12%, ranking fifth; In terms of molecular industries, the top three performing industries in the transportation industry are railway transportation (- 3.18%), expressway (- 3.98%) and public transportation (- 4.51%).
[key information] China’s highway logistics freight rate index was 100322 points, basically the same as last week. The demand for highway logistics is generally stable, the supply of transportation capacity is relatively sufficient, and the freight rate index continues to operate smoothly. From the perspective of the later trend, the freight rate index may continue to fluctuate slightly or pick up. (China Federation of logistics and procurement)
[Key announcement] 1) Deppon Logistics Co.Ltd(603056) : JD Zhuofeng will acquire the voting rights of 999870% of the shares of Debang holdings in total, thus indirectly controlling 664965% of the shares of the company held by Debang holdings; Jingdong Zhuofeng, controlled by Jingdong group, will become the indirect controlling shareholder of the company; 2) Cosco Shipping Holdings Co.Ltd(601919) : the estimated operating revenue of the company in 2021 is 33.394 billion yuan, with a year-on-year increase of 94.85%; The net profit attributable to shareholders of listed companies was 89.296 billion yuan, a year-on-year increase of 799.52%.
[views of this week]
In January, the profitability and concentration of the express industry improved. The month on month growth of express revenue in January 2022 was mainly driven by single ticket revenue, and the concentration of head express enterprises increased month on month. According to the data of the State Post Office, in January 2022, the revenue of express business above designated size was 91.730 billion yuan, with a year-on-year increase of 5.73% and a month on month decrease of 0.03%; The express business volume above designated size was 8.774 billion, with a year-on-year increase of 3.30% and a month on month decrease of 14.38%; The average single ticket income of express delivery above designated size was 10.45 yuan / piece, with a year-on-year increase of 2.36% and a month on month increase of 16.76%; The service concentration index CR8 of Express brand was 81.90%, with a year-on-year increase of 1.5 percentage points and a month on month increase of 1.4 percentage points.
The increase of online retail penetration + the introduction of the government’s policy of restricting “price war” has prompted the industry to shift from share priority to improving quality and efficiency, and the leading advantage is expected to be consolidated. From February 2020 to January 2022, the revenue of express business above Designated Size achieved positive year-on-year growth in 23 months (except December 2021). At the same time, the express revenue is gradually switched from the increase of volume to the simultaneous rise of volume and price. 1) The expansion of online retail scale drives the growth of express business. Under the influence of the epidemic, consumers have accelerated their shift to online consumption due to factors such as restricting travel or reducing the probability of infection. From January 2020 to December 2021, the online retail penetration rate was more than 20.00%, up to 25.20%, and the overall level was higher than that before the epidemic; In 2020 and 2021, online retail sales reached new highs, reaching 9.76 trillion yuan and 10.80 trillion yuan respectively, with a year-on-year increase of 14.71% and 10.71% respectively. The scale of online retail continued to expand, promoting the growth of express business. Since 2020, the express business volume above designated size has continued to grow for 24 months, with a positive year-on-year growth; 2) Under policy constraints, there is limited room for the decline of Express single ticket income. The competition of e-commerce express is homogenized seriously, and price competition is the main means to expand market share. With the addition of new players, the price war intensified. In recent years, the price of express delivery has shown a downward trend. In April 2021, the 70th executive meeting of Zhejiang provincial government deliberated and adopted the regulations on the promotion of express industry in Zhejiang Province (Draft), which stipulates that express services shall not be provided at a price lower than the cost; In June 2021, the Ministry of transport, the State Post Office and other departments jointly issued the opinions on ensuring the legitimate rights and interests of courier groups, and put forward corresponding measures for unfair market competition, regional differentiated fee distribution and other issues. After the introduction of the relevant policies of the government to restrict vicious competition, the drop in the price of Express single ticket has decreased significantly. Since February 2020, the average single ticket revenue of express delivery above designated size has continued to decline year-on-year, but the decline began to narrow in the second half of 2021, and achieved positive year-on-year growth for the first time in January 2022. 3) “Matthew effect” strengthens the advantages of leading enterprises, and the industry is expected to transform to improving quality and efficiency. The policy restricts the vicious price competition of express delivery, and the scale of the industry continues to expand; The means of industry competition is expected to change from price competition to improving service added value and diversified operation. The leading express enterprises have the advantages of technology and capital, and are in a more favorable position in optimizing services and seizing market share. At the same time, the advantage of scale effect is expected to be consolidated with the improvement of the profit center of the industry; The situation of constant strength of the strong in the express industry may continue. Since February 2021, the year-on-year decline of Express brand service concentration index CR8 has been narrowing, and achieved positive year-on-year growth in January 2022.
Investment advice
China’s express delivery industry is in the stage of transformation from growth to maturity, and the demand is still expected to maintain rapid growth. After the “price war” was suspended, the express industry ushered in a change; With the advantages of technology and capital, leading enterprises in the industry are expected to lead the industry from price competition to improving service quality, and the cost advantage formed by scale effect is also expected to be consolidated. Related objects include S.F.Holding Co.Ltd(002352) , Yto Express Group Co.Ltd(600233) , Sto Express Co.Ltd(002468) , Yunda Holding Co.Ltd(002120) , etc.
Risk tips
Deterioration of industry competition pattern; The growth of online retail is less than expected; Policy changes in the express industry.
