Express delivery: the demand and timeliness of the express delivery industry were greatly affected in March because the development of the epidemic in China exceeded expectations; We believe that the worst impact has basically passed, the demand is expected to be released later, the single ticket profit remains at a high level, and we continue to be optimistic about the performance flexibility of Tongda express and the medium and long-term layout value of SF. 1) Affected by the epidemic in Shenzhen, Shanghai, Jilin and other places, the delivery of e-commerce platforms has decreased, and the demand of Tongda Express has been significantly impacted in the middle and late March, but the worst impact has basically passed, waiting for the demand to be released later: the epidemic in China is progressing rapidly, and the impact of Shenzhen and Shanghai, important grain producing areas of Tongda express in the middle and late March, is more prominent. Restricted by local epidemic prevention regulations, the express network of Tongda express enterprises is blocked, In some regions (East China and South China), the receiving, transferring and dispatching links are restricted to varying degrees, resulting in suspension of receiving and dispatching and time delay. There are also backlog orders and suspension of delivery on e-commerce platforms. We believe that: (1) the volume growth of short-term leading enterprises in March will decline sharply month on month, mainly due to the one-time impact of the epidemic, but the worst impact has basically passed; (2) Single ticket transportation costs and transit costs will rise slightly due to the rise of oil prices and epidemic prevention and killing. Epidemic prevention fees have also been introduced in some regions to hedge against the increase of costs; (3) With the improvement of the epidemic situation in Shenzhen and the gradual approach of Shanghai to the high point of the epidemic situation, the inflection point of the industry may not be far away, and the demand will be released later. At the same time, the single ticket profit of leading enterprises remains at a high level, and the year-on-year improvement is still significant.
2) SF Hangzhou outlets have been restored one after another, the growth rate of parts in the operation adjustment period is under pressure, and the medium and long-term configuration value is high: on March 9, the transfer yard of SF Hangzhou Yuhang middle transfer was closed due to the diagnosis of covid-19 by employees, and the Hangzhou SF outlets were closed from March 14. According to the “Zhejiang Daily” reported that this week, Hangzhou Shunfeng stranded packages began to be delivered, and Shunfeng couriers returned to their posts and transferred to other places one after another. At the same time, it is expected to gradually unseal, and most of the stage risks will be relieved, focusing on the progress of the epidemic in Shanghai. From January to February, SF’s business volume increased by + 2.0% year-on-year, mainly due to the company’s initiative to optimize the product structure and reduce the number of low gross profit products from the second half of 2021. We believe that the company’s basic market is stable and the operation adjustment is basically in place. Under the background of practicing healthy operation, there is more room for profit improvement; In addition, the operation of Ezhou airport and the merger and acquisition of Kerry Logistics have brought new growth points, and the company has ushered in the medium and long-term layout time point.
Tongda is affected by the epidemic and oil price in the short term, and the pessimistic expectation is gradually released. We generally believe that the worst impact has passed, and the demand is delayed. At the same time, each single ticket profit remains at a high level, and we are optimistic about the improvement of leading performance. SF is under pressure during the operation adjustment period and is optimistic about the medium and long-term layout value. The price center of Tongda express moved upward, and the quantity and price of head enterprises performed well from January to February. The growth rate in March may decline due to the epidemic stage, but it is still optimistic about the recovery of demand and the improvement of profitability in the future; On the supply side, after Jitu acquired Baishi, it once again strengthened the competition pattern of the industry head; From a medium and long-term perspective, under the background of continuous improvement of online penetration, the demand growth of the express industry is highly deterministic, and service has become a new competitive factor. After the pattern is stable, the industry leaders will fully benefit from the increase of share and profit; The adjustment of short-term operation is in place, the superposition of strict cost control, the continuous improvement of the company’s performance, the timeliness of medium and long-term benefits, international and other diversified business layout, with growth and high allocation value. A shares mainly recommend S.F.Holding Co.Ltd(002352) , Yto Express Group Co.Ltd(600233) , Yunda Holding Co.Ltd(002120) , and American stocks are optimistic about China Express. Aviation: aviation safety accidents do not change the recovery cycle of the industry; The number of civil aviation flights in China continued to decline due to the epidemic; Pay attention to the improvement of the supply and demand pattern of the industry after the epidemic situation is alleviated.
1) the crash of China Eastern Airlines has a great impact on the demand of the industry in the short term. Some Boeing models are grounded, and the supply is expected to shrink further. Pay attention to the results of responsibility determination: on March 21, China Eastern Airlines mu5735 (b737800ng) crashed while performing the mission of Kunming Guangzhou flight. The crashed aircraft 737800 accounted for 35% of the three major airlines, while the Boeing 737 series aircraft industry accounted for 43%. China Eastern Airlines has grounded 223 Boeing 737800 aircraft and launched a two-week industrial safety inspection throughout the industry. We believe that: (1) it is inevitable that the demand of the industry will be impacted in the short term, but aviation is still recognized as the safest means of transportation in the world, and has obvious advantages in long-distance transportation. The recovery of demand depends on the progress of the epidemic; (2) It is expected that after the accident, the airline company will adopt more strict supervision in terms of scheduling, aircraft introduction and aircraft utilization, and the growth rate of industry capacity will further decline; (3) China’s local small and medium-sized Airlines (local government shares) will face the dual pressure of safety and profitability, and the industry concentration may be improved; (4) The impact on the industry will be finally clarified after the results of responsibility identification are announced.
2) the current round of epidemic situation is grim, and the implementation of civil aviation passenger flights continues to decline: the current round of epidemic situation is still in the high platform stage. The average number of newly diagnosed cases in the mainland in recent one week (3.19-03.25) is 2200, close to the level in the middle and late February of 2020; The number of new asymptomatic infections increased sharply. According to the flight steward data, in the past week (March 19-march 25), a total of 22343 civil aviation passenger flights were carried out across the country, with a month on month ratio of – 36.5%, compared with – 76.7% in 2019 and – 75.3% year-on-year in 2021. Among them, China Southern Airlines / China Eastern Airlines / Air China (excluding subsidiaries) carried out 4872 / 2024 / 2171 flights, with a month on month ratio of – 25.7% / – 57.1% / – 25.4%, compared with – 65.7% / – 85.9% / – 76.0% in 2019 and – 68.0% / – 85.6% / – 76.6% in 2021; 753 / 859 flights were carried out in spring and autumn / Jixiang, with a month on month ratio of – 45.9% / – 44.4%, compared with – 69.5% / – 68.4% in 2019 and – 74.2% / – 71.6% in 2021. With the spread of the epidemic and the sudden air crash, the operation of airlines has been significantly impacted in the short term. With the gradual completion of large-scale testing in Shenzhen, Shanghai and other regions, it is expected that the demand for air travel will gradually recover and the travel confidence is expected to be reshaped.
On the demand side, it is impacted by the epidemic in the short term. With the promotion of acupuncture and specific drugs and the promotion of scientific epidemic prevention, the suppressed travel demand will gradually recover. On the supply side, the introduction of airlines’ transport capacity is slow, Boeing Airbus orders accumulate and it will take time for production capacity to recover. Even if 737max go around does not change the low growth rate of transport capacity, the low growth rate of supply in the medium term has high certainty. In addition, the market-oriented reform of civil aviation ticket prices has opened up the space for price elasticity. The inflection point of supply and demand certainty is superimposed on the upward ticket price, and aviation is expected to usher in a round of growth cycle. Focus on recommending Air China Limited(601111) (which will significantly benefit from the recovery of official travel); Low cost aviation leader Spring Airlines Co.Ltd(601021) ; China Southern Airlines Company Limited(600029) , with high proportion of Chinese lines and high performance flexibility; China Eastern Airlines with obvious location advantages; Pay attention to regional airlines China Express Airlines Co.Ltd(002928) . Airport: affected by the spread of the epidemic in China and the crash of China Eastern Airlines, the number of flights at the airport has decreased significantly in the past week. The airport was also greatly impacted by the superposition of epidemic and air crash. According to the flight steward data, in the past week (3.19 – 03.25), 1263 / 706 / 2865 / 428 / 469 flights were carried out in the capital / Hongqiao / Baiyun / Bao’an / Pudong, China, with a month on month ratio of – 34.6% / – 50.2% / – 31.9% / – 50.5% / – 61.4%, compared with – 84.4% / – 85.2% / – 58.4% / – 92.6% / – 90.2% in 2019.
The short-term airport aviation business has declined due to the disturbance of the epidemic. With the promotion of vaccination and specific drugs, the passenger flow of China International Airlines is expected to gradually recover. In the long run, the airport’s aviation business is stable, while the tax-free industry has huge space. Listed airports will continue to benefit from tax-free dividends in the future, focusing on the airport leaders Shanghai International Airport Co.Ltd(600009) , Guangzhou Baiyun International Airport Company Limited(600004) . Road and Railway: from April 8, the national railway will implement a new train diagram. The new diagram will comprehensively consider the commissioning of new railway lines and the adjustment of passenger and freight train operation structure, and accurately allocate transport capacity resources: according to the Railway Bureau, the national railway will implement a new train diagram from 0:00 on April 8. ① Optimize the operation route of high-speed rail in the Middle East and enrich passengers’ travel choices. While making full use of Hefei Wuhan high-speed railway and Hefei Nanjing high-speed railway to connect Hubei with major cities in the Yangtze River Delta, the connecting line function of Huanggang Huangmei high-speed railway to be put into operation will be used to further revitalize the Middle East high-speed railway network and increase the high-speed railway route from Hubei to the Yangtze River Delta. ② Improve the transportation capacity of electric coal and actively serve the stable operation of the national economy. According to the coal transportation contract, the group will further increase the long-term coal supply and transportation capacity of 54 direct trains in 2022. ③ We will open more international intermodal and sea rail intermodal freight trains to better serve the high-level opening to the outside world. We should give full play to the capacity of the old fellow railway and the strategic channel of the international class. Densify the operation cycle of international trains in some Chinese cities.
This week’s investment strategy: Tongda is affected by the impact of the epidemic and oil price in the short term, and the pessimistic expectation is gradually released. We generally believe that the worst impact has passed, and the demand is delayed. At the same time, each single ticket profit remains at a high level, and we are optimistic about the improvement of leading performance; SF is under pressure during the operation adjustment period and is optimistic about the medium and long-term layout value. China’s aviation demand has been impacted by the epidemic and plane crash in the short term, but the recovery cycle of the industry has not been changed. At present, scientific epidemic prevention has released positive signals, and the supply certainty has slowed down. It is still optimistic about the reversal of supply and demand in the aviation industry for a long time, adding to the market-oriented reform of ticket prices to open up flexible space. Combination of this week: Yto Express Group Co.Ltd(600233) , Yunda Holding Co.Ltd(002120) , S.F.Holding Co.Ltd(002352) , Air China Limited(601111) , Juneyao Airlines Co.Ltd(603885) .
Risk tips:
1) the risk of macroeconomic downturn will have a great impact on the overall demand for transportation.
2) the price competition in the express industry exceeds the market expectation. At present, the price war in the express industry is generally controllable, but it does not rule out a large-scale price war, eroding the profits of listed companies.
3) risk of rising oil price and labor cost. Transportation and labor costs, as the main costs of transportation companies, may face the risk of rising oil prices and sharply rising labor costs.
