20180904-广发证券_香港_-_The_market_has_been_calm_since_interim_earnings_were_disclosed,_with_few_companies__under_pressure_in_the_short_term_3页_557kb

A-Share Logistics Sector Summary

Core Content

The A-Share logistics sector, particularly the express delivery industry, is undergoing significant changes in terms of market concentration, cost control, and growth dynamics. The industry is showing steady growth, but with increasing competition, there are pressures on profit margins. The report highlights the performance of major companies in the sector and outlines future outlooks and risks.

Main Points

• Market Growth and Concentration:
  In the first half of 2018 (1H18), the express delivery industry saw a growth in order volume, although slightly lower than the previous year. The market is becoming more concentrated, with the CR8 (market share of the top eight companies) rising from 80% in early 2018 to 81.5%, and CR4 increasing from 50% in 2017 to 52% in 1H18.

  • Yunda: +52.3% order volume growth, 13.6% market share
  • YTO: +24.5% order volume growth, 12.7% market share
  • STO: +18.5% order volume growth, 9.3% market share
  • ZTO: +25.0% order volume growth, 16.8% market share
  • SF: +35.3% order volume growth, 8.5% market share
  • Deppon Logistics: +54.4% order volume growth, 0.8% market share

• Cost Control as Key Growth Driver:
  Cost control remains the primary factor influencing earnings and volume growth. Companies such as Yunda and ZTO have the lowest cost per delivery and have experienced the highest gross profit growth.

  • New freight forwarding business contributed significantly to gross profit.
  • Gross margins (excluding delivery) for YTO, STO, ZTO, and Yunda saw a slight decline in 1H18, indicating short-term pressure on profit margins.

• Network Expansion and Capacity Optimization:
  YTO and STO have been actively expanding their networks and optimizing capacity, which is expected to lead to a breakthrough in both service quality and volume.

  • YTO's new tangible assets increased by Rmb960m, and it expanded several transshipment centers.
  • STO's investment reached Rmb1.75bn, with Rmb1.062bn allocated to acquiring transshipment centers, significantly improving its self-operating rate of transmission.

• Self-Operating Model Advantage:
  Companies operating under the self-operating model, such as SF and Deppon Logistics, are experiencing rapid growth in bulky heavy goods express services due to strong market demand. This model allows for better control over quality and cost, giving them a competitive edge in both existing and emerging markets.

• Future Outlook:
  The express delivery market will focus on cost and quality in the coming period. Companies with strong cost control and optimized capacity are expected to sustain solid growth, while those with full-network control and high service quality may see long-term growth. Companies that emphasize corporate management and cost optimization are anticipated to gain higher premiums.

Key Information

• Sector Rating: Neutral
• Time Horizon: 12 months
• Benchmark: Hong Kong Hang Seng Index
• Risks:
  • Sharp increases in fuel and labor costs
  • Intensifying price competition
  • Disappointment in e-commerce growth

Figures

• Figure 1: Order volume growth for listed express delivery companies in 1H18
• Figure 2: Market share for listed express delivery companies in 1H18 (by order volume)
• Figure 3: CR8 among express delivery companies has continued to grow this year
• Figure 4: CR4 up to 52% in 1H18

Analyst Certification and Disclosure

• The research analyst certifies that all views expressed accurately reflect their personal views on the companies mentioned.
• No part of their remuneration is directly or indirectly connected with specific recommendations in the report.
• GF Securities (Hong Kong) and its affiliates do not hold shares in the mentioned securities, nor do they have investment banking relationships with the companies discussed.
• Analysts and their associates do not serve as officers of the companies mentioned and have no financial interests in the securities discussed.

Disclaimer

• This report is for informational purposes only and does not constitute an offer to buy or sell securities.
• It is intended solely for use by clients of GF Securities (Hong Kong).
• The report may not be allowed to be sold in certain jurisdictions.
• GF Securities (Hong Kong) accepts no liability for losses arising from the use of the materials unless excluded by law.
• The information, opinions, and forecasts are current as of the date of publication and may change without notice.
• Other communications from GF Securities (Hong Kong) may present different views or conclusions.