According to the Zhitong Finance APP, Dongxing Securities released a research report stating that in August, the national express service companies completed a business volume of 16.15 billion pieces, a year-on-year increase of 12.3%. Since July, the trend of reversing the &#34;involution&#34; has gradually taken shape, and the behavior of exchanging price for volume has been more strongly suppressed, with a noticeable decline in the month-on-month growth rate of volume in August. The growth rate of listed express companies in August continued to diverge, with SF Holding significantly leading the industry average, maintaining a high growth rate of over 30% since April. The growth rate of the Tongda system express companies has declined to some extent, with growth rates all below the industry average. In terms of price, the single ticket revenue of STO, YTO, and YUNDA Corp. increased by 4.6%, 3.4%, and 0.5% month-on-month in August, respectively.
<h2>The main points of Dongxing Securities are as follows:</h2>
Volume growth rate continues to slow down, and the reversal of &#34;involution&#34; curbs the exchange of price for volume
In August, the national express service companies completed a business volume of 16.15 billion pieces, a year-on-year increase of 12.3%. By type, the volume of same-city express business in August decreased by 0.8% year-on-year, while the volume of intercity express business increased by 14.0%. The industry's volume growth rate has been slowly declining since March, which is partly related to the high base from the same period last year and also related to the diminishing marginal benefits of the price-for-volume exchange model. Since July, the trend of reversing &#34;involution&#34; has gradually taken shape, and the behavior of exchanging price for volume has been more strongly suppressed, with a noticeable month-on-month decline in the volume growth rate in August.
YTO and STO significantly improve single ticket revenue
In August, the growth rate of listed express companies continued to diverge, with SF Holding significantly leading the industry average, maintaining a high growth rate of over 30% since April. The growth rate of the Tongda system express companies has declined to some extent, with growth rates all below the industry average. In terms of price, the single ticket revenue of STO, YTO, and YUNDA Corp. increased by 4.6%, 3.4%, and 0.5% month-on-month in August, respectively.
Combining the volume and price data, STO performed the best in August, with a slight decline in volume growth but a month-on-month increase of 0.09 yuan in single ticket revenue; YTO's single ticket revenue increased by 0.07 yuan, but the volume growth rate declined significantly compared to July, indicating that YTO's sales strategy has undergone some adjustments, abandoning some low-priced items. YUNDA Corp.'s increase in single ticket revenue is not significant, possibly due to a certain lag in revenue recognition, suggesting continued observation.
SF Holding's volume growth rate continues to improve, and single ticket revenue has also slightly decreased, indicating that the proportion of e-commerce items in SF Holding is still increasing. However, the main task of SF Holding in this round of increasing the proportion of e-commerce items is to fill idle capacity, so there is an upper limit to the absorption capacity of e-commerce items, which is now gradually approaching a steady state.
The effect of reversing &#34;involution&#34; is immediate, which is beneficial for the sustainable development of the industry
Recent policies related to reversing &#34;involution&#34; have formed a strong restraint on the industry's price-for-volume behavior. At the same time, since the exploration of price-sensitive customers has been relatively sufficient, the incremental demand that can be brought about by further reducing prices has also become quite limited. If the low-price item sector shifts from an incremental market to a stock market, the logic of price wars may change, and the improvement of service quality will be elevated to a more important position.
The rebound in operating data in August, especially price data, demonstrates the immediate effect of reversing &#34;involution&#34;
Referring to the situation in the second half of 2021, it is expected that the upward trend of industry single ticket revenue will continue for some time. However, due to the slightly weaker intensity of the price war this year compared to 2021, the rebound in single ticket revenue is likely to be less than that of 2021. Nevertheless, even so, since the industry's single ticket profit level has already dropped to a low level, price increases will still have a significant positive impact on industry profitability
The government places great importance on combating involution, and the intensity and sustainability of this round of efforts are expected to exceed expectations, which will help the industry achieve high-quality sustainable development.
Investment Recommendations
It is anticipated that relevant policies to combat involution will continue to be implemented in various regions. The current intensity of combating involution in the industry exceeds market expectations, driving corporate profits and sector stock prices upward. It is recommended to focus on industry leaders with superior service quality, such as Zhongtong Express-W (02057) and YTO Express (600233.SH), as well as Shentong Express (002468.SZ), which has shown significant improvement in operational data.
Risk Warning
Intensified price wars in the industry; rising labor costs; changes in policy, etc

002468

002120

002352

600233

Dongxing Securities Co., Ltd. released a research report indicating that in August, the national express service companies completed a business volume of 16.15 billion pieces, a year-on-year increase of 12.3%. The trend of anti-involution is gradually taking shape, and the behavior of exchanging price for volume is being suppressed, resulting in a significant decline in the month-on-month growth rate of volume. SF Holding's growth rate leads the industry average, maintaining a high growth rate of over 30%; the growth rate of the Tongda system express services has declined, falling below the industry average. In August, the single-ticket revenue of STO, YTO, and YUNDA Corp. increased by 4.6%, 3.4%, and 0.5% month-on-month, respectively

Dongxing Securities: Express delivery anti-involution curbs price-for-volume exchange, Tongda system single ticket revenue significantly rebounds