According to the 智通财经APP, dongxing Securities released a research report stating that the intensity of price competition in the express delivery industry this year slightly exceeded expectations, but it does not change the judgment that the price war is expected to ease in the second half of the year, especially after the industry enters the peak season in the fourth quarter. Influenced by capacity constraints, the demand for price war in exchange for volume will weaken, more likely to bring about a relaxation of the price war. It is recommended to pay close attention to industry leaders ZTO Express (02057) and YTO Express (600233.SH).

Event:

In August, the total business volume of express service companies nationwide reached 14.383 billion pieces, a year-on-year increase of 19.4%, with a decrease in growth rate compared to August's 22.2%. By type, the volume of same-city shipments in August increased by 13.9%, while the volume of intercity shipments increased by 19.7%.

The main viewpoints of Dongxing Securities are as follows:

With a slight decrease in the growth rate of business volume, YTO Express leads the growth rate:

In August, the industry remained in the off-peak season, with a slight increase in express business volume compared to July, but the year-on-year growth rate of business volume fell to below 20%. Among the three listed companies under the Tongda series, YTO Express, which has been around the industry average growth rate, saw a significant increase in business volume growth rate in August, exceeding Shentong and Yunda. Market share increased by 1.2 percentage points compared to the same period last year; Shentong and Yunda's market share increased by 0.9 and 0.2 percentage points, respectively.

There has been a slight easing in price competition, and the postal service explicitly opposes 'internal competition'.

In terms of prices, the industry's price competition eased in August. The average price per ticket increased by 0.16 yuan to 7.93 yuan/ticket, with a year-on-year decrease narrowing to 10.8%. In late August, the State Post Bureau held a special meeting to regulate market order, requiring express delivery companies to resolutely prevent 'internal competition' malignant competition. The meeting has had a relatively positive impact on easing industry price wars. For listed companies, in August, Shentong, Yunda, and YTO saw respective year-on-year decreases in single-ticket revenue of 4.8%, 8.3%, and 7.3%, with Shentong's revenue holding steady month-on-month from July, Yunda showing a slight 0.5% increase month-on-month, and YTO experiencing a 3.1% decrease month-on-month.

YTO has intensified its efforts to compete for market share.

The most significant change in operating data in August was seen in YTO. While the business volumes of other companies all declined month-on-month, YTO's business volume increased against the trend, demonstrating its strong desire for market share. Correspondingly, YTO's single-ticket revenue in August saw a noticeable decrease compared to the previous month. With the aim of increasing market share, YTO has intensified its efforts to compete for lower-end e-commerce shipments, and the lower-price incremental business has pulled down the average single-ticket revenue.

The bottom line of price competition is gradually becoming clear.

What is worth noting in August is that despite YTO intensifying its efforts to gain market share, Shentong and Yunda did not continue to see a decrease in single-ticket revenue. The industry as a whole showed a slight easing in price competition with a narrowing decrease in single-ticket revenue. This indicates that the bottom line of industry price competition is gradually becoming clear, with little likelihood of continued decline in single-ticket revenue. Based on this, a further easing of industry price competition in the fourth quarter can be expected.

Risk warning:

Industry price wars intensify; labor costs rise; changes in policies, and more.