\u3000\u3000 Yto Express Group Co.Ltd(600233) (600233)
Event: Yto Express Group Co.Ltd(600233) announced the expected increase of performance in 2021. The company expects the net profit attributable to the parent company in 2021 to be RMB 2-2.2 billion, an increase of RMB 230-430 million over the same period last year, a year-on-year increase of 13.2-24.5%. In terms of single quarter, the company expects the net profit attributable to the parent company in 2021q4 to be 1.04-1.24 billion yuan, an increase of 670-870 million over the same period last year, a year-on-year increase of 174.7% – 227.2% and a month-on-month increase of 237.1% – 302.0%. The performance slightly exceeded our expectations.
Improved competition pattern + strengthened pricing power + customer structure optimization helped to significantly improve 21q4 performance and verify the profit inflection point. In 2021, the national and local governments successively issued policies to control the irrational competition in the industry. In early September, the express companies in the industry announced the increase of fees under control. The competition gradually shifted from price driven to value driven, superimposed with the price increase in Q4 e-commerce peak season. The single ticket prices of Yuantong in October and November were RMB 2.29 and 2.59 respectively, with year-on-year changes of + 6.8% and + 12.3% respectively. The single ticket service price of express improved significantly.
Meanwhile, in 2021, the company will continue to promote comprehensive digital transformation, pay attention to service quality, improve customer stratification and product upgrading, and improve product pricing ability. In addition, the company optimized the customer structure, improved the customer composition, and the price of single ticket express service gradually stabilized and rebounded. The company expects that the net profit attributable to the parent company in the single quarter of 2021q4 is RMB 1.04-1.24 billion, with a year-on-year increase of 174.7% – 227.2%. The company’s operating revenue in 2021q1-q3 is RMB 30.54 billion (+ 30.4%), the net profit attributable to the parent company is RMB 950 million (- 31.2%), and the net profit attributable to the parent company after deduction is RMB 890 million (- 26.8%).
The growth rate of express delivery volume maintained medium and high growth, and the cost continued to decrease under the strong scale effect. In terms of the number of express pieces, Yuantong completed 1.57 billion and 1.75 billion pieces respectively in October and November, with a year-on-year increase of 19.5% and 13.4% respectively, maintaining medium and high growth. The excellent piece growth represents strong network execution and abundant trunk line capacity.
In the first three quarters, the company achieved a total of 11.64 billion pieces, a year-on-year increase of 40.2%. In the first three quarters, the operating cost of a single ticket was 2.44 yuan (year-on-year – 3.9%), the gross profit of a single ticket was 0.18 yuan (year-on-year – 35.7%), and the gross profit margin was 6.8% (year-on-year – 3.2pp, month on month).
Profit forecast and investment suggestions. The industry development chain described in the previous report: bottom of policy → bottom of unit price → bottom of profit. The industry has verified the bottom of policy since April 2021. In September 2021, companies announced the increase of fees, and the bottom of unit price has been continuously verified by industry data and company data. The industry competition has changed from price driven to value driven. The performance in the fourth quarter verified the turning point of profit. Looking ahead, superimposing the scale benefits of the e-commerce express industry itself, the profits of the industrial chain will continue to improve and the company’s performance will grow steadily in the future. We raised the profit forecast for 2021 / 22 / 23 to RMB 2.1 billion, RMB 2.9 billion and RMB 3.6 billion, and the corresponding EPS is expected to be RMB 0.62, RMB 0.84 and RMB 1.04 respectively, and the corresponding PE in 2021 / 22 / 23 is 27, 20 and 16x respectively, maintaining the “buy” rating.
Risk tips: the price war intensifies, the policy implementation is less than expected, the growth rate of e-commerce declines, and the labor cost rises sharply.
