Core views:

One of the leading express delivery brands, steadily expanding and improving operations. Established in 1999, Yunda has become one of the leading express delivery brands after 25 years. According to data estimates disclosed by the State Post Office, in 14-19, thanks to direct marketing and digital transformation of transit centers, the company's cost advantage expanded, and its market share rebounded from fifth to second in the industry. Although the share was damaged by the network crisis in '22, after 23 years of management improvements and network repairs, the company's restart share expanded and performance flexibility showed. Market share and net interest rate both increased year-on-year in the first three quarters of 24.

Industry supply and demand have reversed, and industry returns have increased. The industry experienced growth before and after the pandemic, and the profit center changed gears to reduce capital expenditure. The industry's capital expenditure peaked in '21. Leading express delivery companies have basically completed direct management and automation transformation, and the industry has entered a period of climbing capacity. Against the backdrop of strong demand growth, it is estimated that it will take 4 years to rebalance supply and demand. Capacity utilization will peak in 2025. The profit center of the industry will gradually move from shock to stability, and Yunda will also usher in a strategic opportunity to reverse the difficult situation.

Network repair, dilemma reversed. According to the company's financial report, Yunda launched a network repair plan in 2023. The number of terminal outlets increased (up 14.84% year-on-year to 4,851). The increase in the number of outlets could lead to excessive volume growth, and the increase in network stability led to an increase in service capacity.

The company is gradually verifying it along the path of network repair - market share repair - cost repair - price repair. Yunda has accumulated sufficient asset heritage in history. Currently, it is in the market share and cost recovery phase. Its production capacity climbing space is sufficient to support industry-leading downward cost elasticity and upward profit elasticity.

Profit forecasting and investment advice. With the recovery of the company's profit level and business volume, the company's valuation center is expected to return to reasonable. The net profit due to mother is expected to be 1.974, 2.349, and 2.756 billion yuan respectively in 24-26. Referring to comparable company valuations, the company is given a PE valuation of 14 times in 24 years, corresponding to a reasonable value of 9.53 yuan/share, maintaining an “increase in holdings” rating.

Risk warning. Industry demand growth fell short of expectations, industry price competition worsened again, franchise network operations were unstable, policy impact was uncertain, and macroeconomic environment was under pressure.