The Zhitong Finance App learned that Huayuan Securities released a research report saying that the State Post Office released express delivery business data for April 2024 showing that in April, the national express delivery business volume was about 13.70 billion units, +22.7% year over year, and business revenue reached 109.44 billion yuan, up 15.7% year on year. The price of express delivery orders in April was about 8.0 yuan/piece, down 5.7% year on year. In April, the concentration of express delivery CR8 was about 85.0%, an increase of 0.3 pct over the previous year. Leading companies accept fluctuations in shares within a reasonable range, lower back companies have flexible strategies, and back-row companies expect break-even. Under multiple demands such as industry demand exceeding expectations, increased capacity utilization, and restoration of the franchisee ecosystem, the industry ushered in a period of easing competition, increased performance visibility, and back-row enterprises are also expected to unleash performance flexibility.

The main views of Huayuan Securities are as follows:

Industry demand continues to recover, and overall competition is manageable

Demand in the express delivery industry grew 22.7% in April, 2.6 pct higher than the March growth rate. In 2024, industry demand remained 20% +, continuing to exceed the market and companies' expectations for the industry's growth rate. Market demand expectations may rise due to factors such as high growth in live e-commerce, declining value of individual packages in the industry, and increased returns. In terms of package volume, the volume of postal parcels this year was included, and the scale of the industry volume was expanded; in terms of growth rate, excluding postal parcels, the industry volume growth rate in April was estimated to be about 23.4%, which is not much different from the growth rate of disclosure demand.

Prices in the express delivery industry in April were -5.7% year on year after being traced back. The year-on-year decline was basically the same as in March. The decline was not significant, and the trend competition was stable, and price competition was manageable; the absolute value of prices fell month-on-month compared to March, mainly due to seasonal rules and the release of competition policies in some regions.

Industry concentration increased slightly, and the trend of differentiation continued

In April, the concentration of express delivery CR8 was about 85.0%, an increase of 0.3 pct over the previous year. Looking at the market share of various companies, Yuantong's business volume in April was about 2.15 billion units, the corresponding market share was about 15.7%, the same as March; Yunda's business volume was about 1.92 billion units, corresponding market share was about 14.0%, up 0.1% month on month; Shentong's business volume was about 1.73 billion units, corresponding market share was about 12.6%, up 0.1% month on month.

The price reduction rate of access systems has narrowed, and the competitive strategy is moderate

Judging from the year-on-year decline in prices, the year-on-year decline of all companies narrowed. Among them, Yuantong was -2.8%, the lowest year-on-year decline, and Yunda -15.6%, the highest year-on-year decline; when viewed from April to March: Yuantong -0.06 yuan, Yunda -0.03 yuan, and Shentong -0.05 yuan. All companies were able to control the month-on-month decline, partly due to the decline in cargo weight, and partly as a competitive strategy adjustment factor.

Judging from the growth rate of business volume, Yuantong increased slightly in April compared to March, and Yunda Shentong declined slightly. Overall, all companies maintained relatively rapid growth exceeding the industry level; Zhongtong adhered to the general direction of not doing low-priced items or loss-making items, and the volume growth rate rebounded due to policy fine-tuning. Looking at the compound growth rate in April 2, the growth rates of Yuantong/Yunda/Shentong were 31%/30%/48%, respectively.

Recommended attention: Zhongtong Express (02057), long-term leader, stable operation, shareholder return has reached 8%; Yuantong Express (600233.SH), with significant share growth, network health, intelligent leadership or second opening; Shentong Express (002468.SZ), increased production capacity and service, improved franchisee system, potential for Alibaba, higher odds; Yunda (002120.SZ), surpassed peers in volume growth, repair operations, and release of flexible performance.

Risk warning: The risk of macroeconomic downturn will have a big impact on overall transportation demand. Price competition in the express delivery industry has exceeded market expectations. There is a risk that oil prices and labor costs will continue to rise. Transportation and labor costs, as the main costs in the transportation industry, may face the risk of rising oil prices and sharp increases in labor costs.