Shenwan Hongyuan: The transmission of express delivery price increases to the revenue side has been verified. Pay attention to the performance of the express delivery industry in the third quarter report and the pricing situation during the peak season

According to the Zhitong Finance APP, Shenwan Hongyuan released a research report stating that the express delivery industry has entered a new stage of anti-involution, focusing on the performance of the third quarter report and pricing during the peak season. In the short term, attention should be paid to price increases in other regions, the intensity and sustainability of implementation, and pricing during the peak season. For the new stage of anti-involution, the bank has made three assumptions: 1) The price gap in the industry is eliminated, profits continue to recover, and ultimately tend toward public utility status, while satisfying the rights of couriers and conducting large-scale dividends. 2) Many regions continue the previous competitive situation, leading to increased industry differentiation. 3) The possibility of higher-dimensional integration and mergers and acquisitions, optimizing the supply side.

Shenwan Hongyuan's main viewpoints are as follows:

Event: The State Post Bureau and express delivery companies released the August monthly report

According to the State Post Bureau, the express delivery business revenue in August reached 118.96 billion yuan, a year-on-year increase of 4.2%; the express delivery volume in August reached 16.15 billion pieces, a year-on-year increase of 12.3%. YTO Express completed a business volume of 5.39 billion pieces in August, a year-on-year increase of 9.82%, with a single ticket revenue of 2.15 yuan, a year-on-year decrease of 1.13%; STO completed a business volume of 4.434 billion pieces in August, a year-on-year increase of 14.47%, with a single ticket revenue of 2.06 yuan, a year-on-year increase of 3.0%; YUNDA Corp. completed a business volume of 4.119 billion pieces in August, a year-on-year increase of 5.16%, with a single ticket revenue of 1.92 yuan, a year-on-year decrease of 3.52%.

The growth rate of express delivery volume in August slightly declined, while the unit price increased month-on-month

The growth rate of express delivery volume in August decreased slightly, with a year-on-year increase of 12.3%, and the annual industry growth rate is expected to be around 15%. The industry’s single ticket revenue in August was 7.37 yuan/piece, a month-on-month increase of 0.1%, with a monetary month-on-month growth rate of 0.01 yuan. Since August, the anti-involution in express delivery has continued to advance, with prices in grain-producing areas continuously rising, leading to an upward trend in industry unit prices.

Express delivery companies' unit prices increased month-on-month, with differentiated growth rates, and business volume continued to grow

From the perspective of month-on-month changes in unit prices: STO (+0.09 yuan) > YTO (+0.07 yuan) > YUNDA (+0.01 yuan) = industry (+0.01 yuan), with the unit prices of the Tongda system increasing month-on-month, among which STO's unit price recovery is relatively large. Business volume continued to grow, with year-on-year growth rates: YTO (+11.1%) > STO (+10.9%) > YUNDA (+8.7%).

In September, various regions across the country have successively followed up with price increases, optimistic about the profit recovery brought by the continued increase in industry unit prices

Except for grain-producing areas such as Guangdong and Zhejiang, other regions across the country have successively followed up with price increases in September, with Jiangsu, Hubei, Hunan, Jiangxi, Henan, and Shandong all announcing price increases. It is expected that the national industry unit price will continue to rise in September, and the profit recovery of the Tongda system in the third quarter is optimistic.

Risk Warning: The degree of price competition in the industry exceeds expectations; decline in express delivery demand; significant changes in industry structure; risk of rising labor costs