\u3000\u3000 Yto Express Group Co.Ltd(600233) (600233)
Conclusions and recommendations:
Event: Yto Express Group Co.Ltd(600233) announced the announcement of pre increase of performance in 2021. It is estimated that the net profit attributable to the parent company in 2021 will be 2-2.2 billion yuan, with a year-on-year increase of 13.20% – 24.52%. Among them, Q4 realized a net profit attributable to the parent company of 1.046-1.246 billion yuan, a year-on-year increase of 174.68% – 227.20%, and the performance increased significantly, exceeding expectations.
Price increase in peak season, Q4 performance improved significantly: under the policy guidance of limiting vicious competition in the industry and protecting the rights and interests of express brothers, head express enterprises have raised single ticket prices one after another. Since entering the peak season of Q4, Tongda department and other express companies have issued price increase notices, and the price war has slowed down significantly, boosting Q4’s performance. The company expects that the net profit attributable to the parent company in 21q4 is RMB 1.046-1.246 billion, with a year-on-year increase of 175% – 227% and a month on month increase of 239% – 304%. The profitability has been significantly repaired year on year and month on month. In terms of single ticket revenue, the unit price in October and November reached 2.29 yuan and 2.59 yuan, up 6.86% and 12.32% year-on-year, 0.45% and 12.93% month on month, leading the whole industry. The company began to rebound after the low point of RMB 2.02 in July 2021, and the single ticket revenue reached RMB 2.59 in November, an increase of 28.22% compared with July 2021. Under the peak season price increase and strict policy supervision, the express unit price is expected to continue to rise moderately, or will drive the continuous improvement of the company’s profits.
Business volume maintained high growth: from January to November, the company completed 14.96 billion express business, a year-on-year increase of 34.07%, higher than the industry average growth rate of 1.8pct, and the business growth rate ranked first among A-share listed express enterprises; The market share was 15.3%, with a year-on-year increase of 0.2%. According to the prediction of the State Post Office, the express business volume will be 108.5 billion pieces in 2021, with a year-on-year increase of 30%. With the upgrading of consumption in the sinking market, the rise of content e-commerce and community group purchase, the penetration rate of online shopping will continue to increase. It is expected that the business volume will reach 122.5 billion pieces in 2022, with a year-on-year increase of about 13%. Secondly, according to the “14th five year plan” for the development of postal industry, it is expected that by 2025, the express business volume will exceed 150 billion pieces, forming a number of postal express brands with an annual business volume of more than 20 billion pieces, and the business volume is expected to continue to maintain steady growth.
Continue to promote digital transformation and improve service quality: in 2021, the company continued to promote digital transformation, relying on digital management tools, deeply tap the differentiated needs of the market, improve customer stratification, product upgrading, enhance the company’s bargaining power, accurately control the costs of the whole chain and the whole process, and realize the integrated cost reduction and efficiency increase of the whole network. The cost of Express single ticket of 2021h1 company decreased by 2.63% to 2.08 yuan year-on-year, and the per capita efficiency increased by more than 20% year-on-year. In the new stage of value competition in the express industry, with the deep empowerment of digital business and the improvement of service quality, the company is expected to fully benefit.
Further upgrading of the regulation of the express industry: in 2021, the state and some local governments successively issued a series of regulatory policies and guidelines for the express industry to regulate irrational competition. Since September 1, express companies have raised dispatch fees under strict supervision, and the competition pattern has gradually shifted from price driven to value driven. Secondly, on January 7, 2022, the State Post Office issued the measures for the administration of express market (Revised Draft), which once again clarified that enterprises and their employees engaged in express business: 1) shall not collude with others to manipulate market prices and damage the legitimate rights and interests of other enterprises or users engaged in express business; 2) It is not allowed to provide express service at a price lower than the cost without justified reasons; 3) Without the consent of the user, it is not allowed to confirm the receipt of the express, and it is not allowed to deliver the express to the intelligent express box, express service station and other express end service facilities without authorization; 4) The legal rights and interests of express employees in terms of labor remuneration, working conditions, labor protection, vocational training, career development and social insurance shall be protected according to law. Overall, it is expected to guide the healthy and orderly competition of express enterprises, further reduce the possibility of price war and improve the service quality of enterprises. It is expected that in 2022, the industry will gradually shift from chasing high growth rate to high-quality competition, and head express enterprises may benefit first.
Profit forecast: under the background of continuous upgrading of policy and supervision, the company’s service quality continues to improve, its product pricing ability is enhanced, and its profitability is expected to continue to improve. We raised the profit forecast for 21 and 22 years. It is expected that the net profits in 21 and 22 years will be 2.109 billion yuan and 2.68 billion yuan respectively (original 1.56 billion yuan and 2.019 billion yuan), yoy will be + 19% and yoy + 27% respectively, and EPS will be 0.61 yuan and 0.78 yuan respectively. The current A-share price corresponds to 30 times and 24 times P / E, maintaining the buying investment proposal.
Risk tips: market competition intensifies, cost reduction and efficiency increase are less than expected, and the online stores of franchisees are unstable, etc
