The Zhitong Finance App learned that Zheshang Securities released a research report saying that with the increase in the penetration rate of online consumption, the growth rate of upstream e-commerce sales is slowing down, and the express delivery market is entering stock competition. Currently, the competitive landscape is not stable. Since 2023, “grain-producing regions” such as Yiwu have experienced fierce price competition. With the arrival of the peak season, industry prices have recovered somewhat. It is expected that healthy competition will continue, and Jitu will acquire Fengwang and go public. Future industry concentration will accelerate in 2023 due to industry price competition. Market sentiment in the express delivery sector is relatively sluggish. The current sector generally falls to a low level in 2024 valuations. The valuation already basically reflects the long-term decline in the industry's growth rate and continued price competition. It has a margin of safety, and is relatively cost-effective.

1) Direct Express: Optimistic about SF Express Holdings (002352.SZ) (the steady rise in the time-efficiency business, the increase in profits in the bulky express business combined with the continuous improvement of new business. The cost reduction of multi-network integration is expected to exceed expectations, and it is expected to be the first to benefit in a pro-cyclical context).

2) Join Express: In the medium to long term, industry differentiation continues, and the market share of leading express delivery companies is expected to increase further, thus driving performance recovery (Zhongtong Express (02057) /Yuantong Express (600233.SH)); it is recommended to focus on Shentong Express (002468.SZ) (accelerate production capacity investment, the company continues to lead the way in volume growth, which is expected to bring profit release due to scale effects) /Yunda Co., Ltd. (002120.SZ) (The volume growth rate ushered in positive growth, and is expected to drive positive growth. point marginal improvement).

3) Jitu Express (01519): Benefiting from the rapid growth in overseas express delivery business volume and active development of cross-border e-commerce business, the company's revenue is expected to grow rapidly, the effects of superposition scale will be released, domestic operations will continue to improve, and profitability is expected to increase.

Express delivery industry situation: Average daily revenue during the 2024 Spring Festival holiday increased by 145.2% compared to the 2023 Spring Festival holiday

Industry Overview: According to data from the National Post Office, during the 2024 Spring Festival holiday period (February 10-17), the national postal express industry generally operated safely and smoothly, and delivery channels were smooth and orderly. 1,079 million express parcels were collected, and the average daily delivery volume increased by 145.2% compared to the 2023 Spring Festival holiday; 641 million express parcels were delivered. The average daily delivery volume increased by 82.1% compared with the 2023 Spring Festival holiday, and the number of express parcels is growing well.

Since the beginning of the Spring Festival travel season (January 26 to February 17), the national postal express industry has collected 5.655 billion express parcels, an increase of 30.8% over the same period of the 2023 Spring Festival travel season; it has delivered 5.994 billion express parcels, an increase of 21% over the same period of the 2023 Spring Festival travel season.

According to weekly data released by the Ministry of Transport, Zheshang Securities estimates that it collected about 13.1 billion units in January, +74.8% compared with the same period in 2023, and delivered about 13.035 billion units, +65.1% compared with the same period in 2023.

Express delivery volume: The number of items delivered during the Spring Festival during the Spring Festival increased significantly over the same period last year

1) Yuantong: January business volume was 2.15 billion units, +91.8% YoY; +0.4% YoY.

2) Yunda: January business volume was 1.96 billion units, +96.1% YoY; +0.4% YoY.

3) Shentong: January business volume was 1.81 billion units, +124.5% YoY; +5.9% YoY.

4) SF Express: January business volume was 1.15 billion units, +19.85% YoY (including Feng.com), +28.3% YoY (excluding Feng.com); +1.5% month-on-month.

Affected by the Spring Festival stalled, in January 2024, all express delivery companies in Tongda achieved a significant year-on-year increase in express delivery volume, and Shentong continued to maintain its lead; the volume of all express delivery companies increased slightly from December 2023. According to Yunda's announcement, in January 2024, the company actively improved the level of network operation, guaranteed network stability, and improved service quality. At the same time, due to the New Year's Festival promotion effect and Spring Festival holiday misalignment, the company's express delivery service business revenue and business volume increased year-on-year in January 2024.

SF Express's volume growth rate in January was relatively steady, mainly due to the company's stable and time-efficient network service capabilities under the company's direct operation model. In the same period of 2023, the company effectively guaranteed the various delivery needs of enterprises and residents after the restoration of production and life and during the Spring Festival. The revenue growth rate of the company's express logistics business in the same period last year was clearly superior to the industry, so the base for the same period in 2023 was relatively high. On this basis, the company's express logistics business (excluding Feng.com) still achieved relatively rapid growth in January 2024, with a year-on-year increase of 28.30% in business volume.

Core view: As the penetration rate of online consumption increases, the growth rate of upstream e-commerce sales is slowing down, and the market is entering stock competition. Currently, the competitive pattern has not stabilized. It is expected that healthy competition will continue, and Jitu will acquire Fengwang and go public, and industry concentration may further increase in the future.

Express delivery prices: Express delivery prices in January all increased slightly compared to December

1) Yuantong: Unit price in January was 2.45 yuan, year-on-year change -10.6%, and month-on-month +0.03 yuan.

2) Yunda: Unit price in January was 2.27 yuan, year-on-year change -17.5%, month-on-month change +0.03 yuan.

3) Shentong: Unit price in January was 2.19 yuan, year-on-year change -18.9%, month-on-month change +0.01 yuan.

4) SF Express: The unit price in January was 17.0 yuan, a year-on-year change of -5.9% (excluding Feng.com, considering the year-on-year change of -0.35%), and a month-on-month change of +1 yuan.

Core view: Since 2023, “grain-producing regions” such as Yiwu have experienced fierce price competition, and franchisee operations are under pressure. With the arrival of the peak season, the industry's single ticket revenue in September has now recovered. Prices improved month-on-month during the Q4 peak season. Single ticket prices increased slightly in January and remained relatively stable. Zheshang Securities believes that in 2024, there may still be phased regional price competition, and the degree, duration, and competitive strategy of competition still need to be observed.

Courier service revenue: SF Express's revenue is still growing steadily under a high base

1) Yuantong: achieved express delivery service revenue of 5.26 billion yuan in January, +71.5% year-on-year;

2) Yunda: Achieved express delivery service revenue of 4.44 billion yuan in January, +61.5% year-on-year;

3) Shentong: achieved express delivery service revenue of 3.97 billion yuan in January, +82.6% year-on-year;

4) SF Express achieved express delivery service revenue of 19.50 billion yuan in January, +20.7% year over year (excluding Feng.com, SF Express logistics business revenue +19.5% year over year; supply chain and international business achieved revenue of 4.856 billion yuan, +2% year over year). The company's revenue base for the same period last year was relatively high. On this basis, the company's express logistics business (excluding Feng.com) still achieved relatively rapid growth in January 2024, with revenue up 20.72% year on year and business volume up 28.30% year on year; supply chain and international business revenue achieved positive year-on-year growth, mainly due to the gradual stabilization of international air and shipping demand and freight rates, as well as the company's deepening business integration and continuous development of the supply chain and international markets.

Risk warning: Economic downside risks, industry growth is lower than expected, and the express delivery price war worsens.