Yunda Holding Co.Ltd(002120) (002120)
Key investment points
Three levels and two stages of value restoration are about to enter the essential stage of profit restoration. The value restoration of e-commerce express is divided into three levels of fundamentals, corresponding to two stages of market performance. 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 Yunda’s share 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).
The single volume end has no worries about growth, the gap between leading seats is difficult to overcome, and the market continues to build the core barrier. The market is worried about the growth rate of express package volume. On the one hand, the cumulative year-on-year growth rate of physical online shopping retail sales in November 2021 is 13.2%, down 2.50pts year-on-year; On the other hand, the 14th five year plan for the development of postal industry predicts that the express business volume will exceed 150 billion by 2025. However, we believe that from the perspective of e-commerce platform pattern, express package value, express enterprise pattern and the prudence of past policy guidelines, Yunda’s single volume growth is worry free.
Tiktok Kwai, 1) from the perspective of the platform of the electronic business platform, the rapid rise of live goods is expected. The China Industrial Research Institute expects that the market of China’s live online shopping market will reach 1 trillion and 510 billion yuan in 2022, and the 19-22E composite growth rate will be 51.5%.
2) From the perspective of express package value, with the increase of Gmv share of emerging e-commerce platform, the value of Express single package continued to decline, from 134.19 yuan / piece in 2019 to 117.07 yuan / piece in 2020, and then to 100.01 yuan / piece in November 2021.
3) From the perspective of the pattern of express delivery enterprises, it is difficult for enterprises with lower seats in the industry to form good resource synergy at the headquarters and franchisees, or cause single volume overflow, which is good for the flow of packages to the head players. For the top players, the seating order is also stabilizing (assuming that the single quantity of the industry is 110 billion in 2021, the single quantity corresponding to 1% market share is 2.2 billion, and the absolute digital gap is difficult to overcome), and the trend of the industry share pattern is highly deterministic.
4) From the perspective of the prudence of policy guidance in the past, the 13th five year plan for the development of postal industry in 2015 predicts that the express business volume will be 70 billion by 2020, and the industry single volume in 2020 is expected to be 74 billion in March 2020, with an actual 83.4 billion. The regulators have always been cautious about the industry single volume guidance.
At the unit price end, it is judged that the whole year of 2022 is optimistic and stable
In the short term, it is still strong. According to the express development index report in December 2021, it is estimated that the unit price of express tickets in the industry in December is about 9.48 yuan, which is almost the same month on month (- 0.01 yuan). We judge that after the price increase in the peak season in 2021, the sustainability of the unit price of express tickets is significantly stronger than that in previous years. It is expected that the unit price of Yunda end tickets in the follow-up short-term dimension is still strong. In the medium and long term, it is optimistic and stable. At the end of 2021, the TV and telephone conference still pointed out that on the basis of consolidating the achievements of the preliminary work, we should continue to deepen the standardized governance of the express market order and optimize the market competition pattern. Therefore, on the whole, we maintain a stable and happy attitude towards the unit price of Yunda tickets throughout the year.
At the cost end of single ticket, there is still downlink space for trunk lines and transfer links
Based on the three factors of maintaining high growth of single volume and improving the scale effect, matching the production needs to be leveled at the trough of the whole year, and the high decline of capital expenditure driven by the improvement of asset ownership rate, Yunda single ticket trunk line and transit cost are expected to further decline in the future.
Element 1: the growth of single plate is still, and the share continues to concentrate to the head, and the scale effect is enhanced. As mentioned above, the total amount of express packages is still expected to maintain a relatively high growth. We judge that the industry growth rate is expected to maintain 20% in the next 2-3 years. In addition, the trend of share concentration to the head is irreversible, and the strong scale effect of the leader itself will drive the single ticket cost down.
Element 2: the trough of the annual distribution of piece quantity tends to be flat, which helps to reduce cost and increase efficiency. On the one hand, the promotion mode of e-commerce platform has changed from single round to double round. On the other hand, the consumption behavior of physical online shopping has gradually normalized, and the gap between the peak and average value of express business tends to be flat (the number of express orders during the “double 11” period in 2021 is only 47.9% higher than the daily average of the previous November, while the peak value of express orders during the “double 11” period in 2016 is 118.4% higher than the daily average of the whole year), In view of the fact that most of the previous delivery capacity of express companies were anchored to the high value of the double 11 limit, we believe that this is conducive to the stabilization of the pace of production capacity delivery and the decline of temporary outsourcing costs.
Element 3: the upgrading and replacement capital expenditure has reached a phased high, and it is expected to return to stability in the future. Yunda’s capital expenditure in the first three quarters of 2021 was RMB 5.492 billion, with a year-on-year increase of 39.0%. With the stabilization of the industry share, we judge that Yunda’s ownership rate of tangible assets may have been well coupled with capacity demand, and it is expected that the upgrading and replacement capital expenditure will return to stability from the periodic peak.
Profit forecast and valuation
We raised the company’s net profit attributable to the parent company from 2021 to 2023 to RMB 1.488 billion, RMB 2.724 billion and RMB 4.016 billion respectively, with a year-on-year increase of + 6.0%, + 83.1% and + 47.4% respectively, corresponding to 41.50 times, 22.67 times and 15.38 times of the current share price PE respectively. Considering that the single volume and single piece profit are driven beyond expectations, we are firmly optimistic about the second largest express enterprise in the industry and the leading A-share e-commerce express Yunda Holding Co.Ltd(002120) . The company’s value repair space is determined and the “buy” rating is maintained.
Risk warning: loose policy control; Deterioration of express price war; The growth of physical online shopping fell.
