Core view: due to the differences in economic and geographical structure, China's leading express enterprises will face greater challenges than American express enterprises to significantly improve market concentration through endogenous growth. Looking back on the development history of American Express Bull Stock odfl, China's leading express enterprises want to overcome the challenges, they should not only have excellent management ability, but also maintain more lasting endurance.
American Express stocks have had excellent returns in the past two decades, and Chinese express enterprises are still in the stage of horse racing and enclosure. Over the past two decades, the excellent profitability and share of American Express have logically driven the double rise of profit and valuation, and the 20-year return rate of odfl, the leader of American Express, has exceeded 212 times. China Express has increased financing in the past few years and is in a state of high-intensity competition. The cost gap between enterprises has not been opened, and the market share needs to be improved. At present, it is in the stage of horse racing and enclosure.
The market is concerned about whether China Express can copy the growth path of American Express and achieve high return in the long term. We believe that China Express faces two "difficult" points:
\u3000\u30001. The difficulty lies in the objective environment: the differences in economic and geographical structure between China and the United States have increased challenges for enterprises. (1) The supply of goods in the United States is concentrated, and express enterprises do not need to build multi-level outlets; China's supply of goods is highly dispersed, and the express industry needs a more sinking store structure. Based on this, the operating cost of China's direct operated express network is more different from that of the franchise network. Direct operation has become a niche market, and franchise has become the mainstream model, and the franchise model is more difficult to differentiate between strong and weak to a certain extent. (2) American industrial zones are mainly distributed on the East and west coasts, with sufficient supply of goods in long-distance transportation, easy vehicle loading, and significant scale advantages of leading enterprises; China's economic structure, which is strong in the East and weak in the west, leads to the shortage of return goods in the express industry, the loading rate of return trucks is generally low, and the economies of scale of the leading enterprises in cargo volume are restrained to a certain extent, making it more difficult to open the cost gap with other enterprises.
\u3000\u30002. "Difficulty" lies in subjective strategy: Express tests the patience of management. Reviewing the development history of odfl, the management's patience helped odfl catch up with its competitors and achieve leadership in the long-distance race of 20 years. Odfl pursues scale carefully, adheres to direct operation development, and makes continuous and restrained capital investment, so it has today's position. In order to achieve long-term leadership, Chinese express enterprises need to have the same excellent management ability and more stable strategic determination.
In the world's largest express market, look at the industry from a longer perspective. China Express is the world's largest market. At present, express enterprises are in the process of stepping up financing and expanding their share, and it is still difficult to decide the outcome. Referring to the development of American Express and the historical experience of odfl, excellent express enterprises need to seize the opportunity to expand, but also need to be down-to-earth, work intensively on each line, and patiently establish a long-term competitive advantage with the adjustment and redistribution of industrial structure.
Risk prompt events: (1) information lag risk; (2) Calculate hypothetical risk.
