Guosheng Securities: The anti-involution in express delivery is top-down, expected to have diffusion effects and sustainability

According to the Zhitong Finance APP, Guosheng Securities released a research report stating that the current round of anti-involution in the express delivery industry emphasizes, on one hand, the role of express delivery companies as the main body of anti-involution, and on the other hand, the regulatory responsibilities and enforcement capabilities of national and local postal administrations, taking a dual approach. This round of anti-involution in express delivery is top-down, with Guangdong Province being the first to implement it. The bank believes it has a diffusion effect, and under the background of the transition between peak and off-peak seasons and new social security regulations, the anti-involution in express delivery is sustainable, with significant performance elasticity for major listed express delivery companies.

The main points of Guosheng Securities are as follows:

Top-down approach to establish an anti-involution system with postal administrations supervising enforcement and express delivery companies as the main promoters

On July 1, 2025, the sixth meeting of the Central Financial Committee emphasized the need to govern low-price disorderly competition in accordance with the law; on July 24, the draft amendment to the Price Law of the People's Republic of China further improved the identification standards for low-price dumping to govern "involution-style" competition. In response, the State Post Bureau held a party group meeting and a symposium with express delivery companies such as Tongda on July 8 and July 29, clearly opposing "involution-style" competition; local postal administrations also followed up on anti-involution work. This round of anti-involution in express delivery emphasizes, on one hand, the role of express delivery companies as the main body of anti-involution, and on the other hand, the regulatory responsibilities and enforcement capabilities of national and local postal administrations, taking a dual approach.

Initial results of anti-involution: Increase in minimum express delivery prices in Guangdong

According to the Southern Metropolis Daily, starting from August 4, the minimum express delivery price in Guangdong Province was raised by 0.4 yuan per ticket, with the average price rising to over 1.4 yuan, and the price increasing by 0.1 yuan per kg for every additional 0.1 kg; a 15-day lock period was also set to avoid competing for customers during this time.

Price increase in Guangdong has a demonstration effect and is expected to spread to other regions

As Guangdong is a region with a high proportion of express delivery volume, since 2017, its express delivery volume has accounted for 24.33%-27.25% of the national volume. Its anti-involution has been implemented first and is expected to have a demonstration effect on other "grain-producing areas" for express delivery nationwide. From the actions of other local postal administrations, it is expected that other regions such as Zhejiang and Fujian will follow suit to some extent with price increases.

Off-season price increases combined with new social security regulations are expected to sustain the anti-involution effect for a certain period

Unlike previous years' peak season price increases, this year, under the push of anti-involution, the express delivery industry is raising prices during the off-season, which can then connect to the peak season. From the demand side, the effect of this anti-involution has a certain sustainability. The Supreme People's Court emphasized that participating in social security in accordance with the law is a legal obligation, and the new regulations will take effect from September 1. The bank estimates that with an average of 500 deliveries per person per day and paying social security according to local standards, the average impact on each ticket after all delivery personnel pay social security is 0.06 yuan. Therefore, from the cost side, if all delivery personnel pay social security in the future, the costs for express delivery franchisees will increase, further raising operational pressure, while the price increase driven by anti-involution will cover the additional social security costs for franchisees, making this price increase under the push of anti-involution also have a certain sustainability.

Low profit per ticket + high business volume, price elasticity greater than business volume elasticity, significant profit elasticity for express delivery companies

By the end of 2024, the business volumes for ZTO Express/YTO Express/STO/YUNDA Corp. are expected to be 34.010 billion/26.573 billion/22.729 billion/23.783 billion pieces, with profits per ticket of 0.30/0.15/0.05/0.08 yuan respectively The large business volume and low profitability per ticket determine that an increase in ticket prices leads to significant profitability. Considering (1) the differences in markets and costs between regions, the price increase in individual areas cannot be linearly extrapolated to the entire network; (2) this price increase needs to be redistributed among headquarters, outlets, and couriers; (3) the duration of the price increase, the bank calculates profit elasticity under three scenarios: optimistic, neutral, and pessimistic. Taking the neutral assumption of a price increase of 0.25 yuan across the network, with the headquarters receiving 50%, lasting until the end of the year, social security impact for 4 months, and a corporate tax rate of 25% as an example, the profitability per ticket can increase by 0.03 yuan. The profit elasticity per ticket for Zhongtong/Yuantong/Shentong/Yunda reaches 10.59%/20.93%/69.06%/39.27% compared to 2024. Considering the business volume growth rate in 2025, the total profit elasticity is 28.44%/45.63%/99.34%/55.18%.

Risk Warning: The spread of anti-involution in express delivery is less than expected, express delivery business volume is below expectations, industry structure deteriorates, and calculation errors