Key investment points
Event: A-share express company disclosed the data of December 2021.
The volume of express delivery reached 108.3 billion in the whole year, and the macro-economy was under pressure. In December 2021, the express industry completed 10.24 billion pieces of express business (+ 10.7%), which was significantly siphoned by e-commerce promotion, and the year-on-year growth rate was lower than that in November. From January to December, the cumulative express business volume of the whole industry reached 108.3 billion pieces, with a year-on-year increase of 29.9%, and the growth rate decreased by 1.3pp compared with 2020. In December 2021, China’s total social zero increased by 1.7% year-on-year and 0.5% month on month; The online retail sales of physical goods reached 998.6 billion yuan, an increase of 1.9% over the same period in 2020. The online shopping penetration rate of physical goods in the current month was 24.2%, which was the same as that in December 2020.
Volume: the industry growth center moves down, focusing on high-quality development. In December, the express industry completed 10.24 billion pieces of express business, a year-on-year increase of 10.7%. In terms of listed companies, in December, Shunfeng, Yunda, Shentong and Yuantong completed 940, 184, 1150 and 1.58 billion pieces respectively, with a year-on-year growth rate of 8.3%, 22.2%, 19.6% and 6.2% respectively. The growth rate of Yunda and Shentong exceeded the growth rate of the industry. The share of Shunfeng increased by 9.2% compared with November, and the share of Yunda and Yuantong increased by 17.9% and 11.3% respectively compared with November, The share of Shentong city remained at 15.4%. In 2021, 18.4 billion pieces of rhyme were completed, with a year-on-year increase of 29.8%; Yuantong completed 16.54 billion pieces, a year-on-year increase of 30.8%; Shentong completed 11.08 billion pieces, a year-on-year increase of 25.6%. In 2021, Yunda accounted for 17%, the same as that in 2020, Yuantong accounted for 15.3%, a year-on-year increase of + 0.1pp, and Shentong accounted for 10.3%, a year-on-year increase of -0.4pp.
Price: the price rise in the main grain producing areas continued, and the single ticket income of A-share express companies increased year-on-year. In December, the average unit price of National Express was 9.70 yuan, a year-on-year decrease of 0.31 yuan (- 3.1%). In December, the average unit price of express delivery in the East, central and western regions decreased by 9.5%, 18.0% and 6.3% respectively year-on-year; In terms of classification, the year-on-year changes of intra city, non local and international express delivery were – 16.3%, – 4.6% and – 54.2% respectively. Compared with the year-on-year change in November, the decline in the unit price of intra city and international express delivery narrowed. From the main grain producing areas, the unit price in Yiwu increased year-on-year, and the unit price of express delivery was 3.09 yuan, up + 8.4% year-on-year and – 6.7% month on month. In terms of listed companies, Yunda’s single ticket income in December was 2.35 yuan, a year-on-year increase of + 2.2% and a month on month increase of – 1.3%; The single ticket income of Shentong was 2.44 yuan, a year-on-year increase of + 4.7% and a month on month increase of – 0.8%; The single ticket income of Yuantong was 2.50 yuan, with a year-on-year increase of + 13.0% and a month on month increase of – 3.5%; SF’s single ticket revenue was 16.43 yuan, a year-on-year increase of + 0.4% and a month on month increase of + 3.9%. In 2021, Yunda’s single ticket income was 2.15 yuan, a year-on-year increase of – 4.4%, Yuantong was 2.27 yuan, a year-on-year increase of + 0.4%, Shentong was 1.49 yuan, a year-on-year increase of – 6.4%, and Shunfeng was 16.12 yuan, a year-on-year increase of – 9.3%. Compared with 2020, the decline of single ticket income was significantly narrowed.
Concentration: in December 2021, CR8 of express industry was 80.5%, with a year-on-year decrease of 1.7pp and a month on month decrease of 0.2pp.
Investment suggestion: the performance forecast verifies the profit inflection point. In terms of Q3 performance, the profits of A-share listed companies hit the bottom, and the deduction of non net profits of some companies increased month on month, confirming the bottom of the profits of listed companies. Yuantong’s performance forecast shows that the annual net profit attributable to the parent company will be 2-2.2 billion yuan in 21 years, an increase of 230-430 million yuan over the same period last year, a year-on-year increase of 13.2-24.5%, which verifies the profit inflection point. We reiterate our investment view: under the catalysis of supervision, the valuation of e-commerce express industry is reconstructed: the industry goes from the valuation system under muscle (capital) competition to the valuation system under business competition, and the industry goes out of the most pessimistic state of only giving the valuation of the leading Zhongtong, bringing the valuation repair of longeryunda and longsanyuantong. The price war at the supply side is alleviated, the superposition is gradually realized, the industry integration is accelerated, and the industry development chain is: bottom of policy → bottom of unit price → bottom of profit. We maintain the view that we are fully optimistic about the rebound of franchise express in the 2021h2 express investment strategy report. The price data of the express industry in December proved that the price war in the industry continued to ease, the profits of the industrial chain increased, and the cost caused by the superposition of the scale benefits of the industry itself continued to decrease (taking a comprehensive view of the comparable caliber of Tong, Yunda and Yuantong, the cost decreased by 6-10% in the next year, i.e. 0.05-0.11 yuan / ticket). The profit repair of the express headquarters will be more obvious in the future.
Recommended object:
1) continue to focus on the profit / valuation repair resonance of franchised express, Yunda Holding Co.Ltd(002120) : the management team is stable, share priority, strong strategic concentration, outstanding fine management level, the profit elasticity in the industry repair stage is the largest, and the Q3 deduction of non net profit is 320 million yuan, an increase of 6.7% year-on-year, realizing positive growth. In December, ASP increased by 2.2% year-on-year, and the decline of ASP in the whole year narrowed significantly to – 4.4%. Yto Express Group Co.Ltd(600233) : Performance Forecast: in the 21st year, the net profit attributable to the parent company was 2-2.2 billion yuan, an increase of 230-430 million yuan over the same period last year, a year-on-year increase of 13.2-24.5%, and the annual ASP increased by 0.4%. Zhongtong express: absolute longyi has the strongest scale effect, has a strong and balanced franchise network, and has abundant production capacity and cash reserves. In 2021q3, the market share increased to 20.8% month on month, with significant cost control and a decrease of 4.5% under comparable caliber, showing the leading business dominance.
2) S.F.Holding Co.Ltd(002352) , the periodic low profit brought by network upgrading and new business expansion has passed. At present, with the company refining product stratification, optimizing the structure of time-effective parts and reducing the scale of non-profit parts (warehouse filling preferential parts / Fengwang), ASP rose by 0.4% year-on-year in December. In the medium term, cost improvement will be the biggest fundamental aspect in 2022: the four networks financing effect of aging big network, Fengyun network, express network and warehouse network will continue to be realized at the gross profit margin. At the same time, the optimization space of expenses during the period will be underestimated by the market, significantly increasing the core profit. In the long run, SF’s long-term competitive barriers are still high and the growth space is still large. Under the guidance of industrial policies, the price increase of e-commerce parts will also optimize the competitiveness of SF Express’s whole product line. After the M & A of Kerry Logistics is implemented, the international business will become a new growth engine. The current market value of 320 billion yuan is strongly recommended.
Risk tip: the growth rate of online shopping is declining, franchisees control risks, and labor costs are rising sharply.
