Incident: On November 15, statistics from the Ministry of Transport's network freight information interaction system showed that as of September 30, 2021, there were 1,755 online freight companies (including branches) nationwide, integrating 2.97 million scattered social transportation capacity and 3.1 million drivers; 16.5.76 million waybills were completed in the third quarter, an increase of 30.0% over the previous quarter.
The network freight industry experienced good growth, with waybills growing more than 30% month-on-month in the third quarter. According to data from the Ministry of Transport, as of September 30, 2021, the number of online freight companies was 1,755, an increase of 456 over the end of the second quarter, an increase of 35.1%. It can be seen that the network freight industry is developing rapidly. In terms of business volume, a total of 45.17 million orders were completed in the 1st to 3rd quarter of 2021, of which 165.75 million orders were completed in the 3rd quarter, an increase of 30% over the previous quarter.
The penetration rate of online freight is 25.35%, and there is room for further improvement. As of September 30, 2021, the network freight industry integrated 2.97 million vehicles, with a penetration rate of 25.35% (according to the 2020 Transportation Statistics Bulletin, the total number of trucks in operation was 117.15,400). We believe that the development of network freight will help improve road freight efficiency. Cargo owners, drivers, and platforms have significant needs. Business models are gradually optimized at any time, and the penetration rate of online freight is expected to increase further.
The “Measures for the Operation and Management of Road Freight Transport on Online Platforms” is about to be revised. Compliance development will become the core concept, and it is expected that the concentration of the online freight market will increase. The “Administrative Measures” came into effect on January 1, 2020 and are valid for 2 years. In two years, China's online freight industry developed rapidly, but problems such as vicious price competition, fictitious transactions, illegal billing, and data security also occurred. We believe that future revisions to the “Administrative Measures” will further strengthen compliance requirements, that enterprises that do not operate in compliance will be phased out, and market concentration will be further increased.
Transanhua Zhilian's network freight business is well-regulated. Affected by the changes in the industry and regulations and policy factors mentioned above, it is expected that the company will gradually increase its market share in the online freight circuit in the future. We believe that during the peak freight logistics season in the fourth quarter, the combined market share increase is expected to increase. Revenue for the full year of 2021 will reach 183 yuan (previously forecast was 17.8 billion yuan), an increase of 170% over the previous year.
Investment advice: It is predicted that the company's EPS for 2021-2023 will be 0.71, 0.80, 0.90 yuan, and the corresponding PE will be 12 times, 10 times, and 9 times. Maintain the “Recommended” rating.
Risk warning: the risk that logistics demand falls short of expectations, the risks arising from the digitization process of logistics falls short of expectations, and the risk of policy changes on online freight platforms.
