Core Viewpoint - The recent meeting by the State Post Bureau aims to address the "involution" competition in the express delivery industry, indicating a shift in the competitive landscape following the acquisition of Cainiao Express by Shentong [1] Group 1: Industry Dynamics - The express delivery sector is experiencing a wave of stock price increases amid a crackdown on "involution" competition, with companies like Yunda, Shentong, and Jitu benefiting from this trend [5] - The "involution" competition has led to many express companies offering services below cost to capture market share, resulting in significant pressure on profit margins for both headquarters and franchisees [3][5] - Recent price adjustments in grain-producing areas signal a clear intention to stabilize market prices, with increases ranging from a few cents to several dimes [1] Group 2: Regulatory Changes - The recent revision of the Price Law targets predatory pricing practices, defining low-cost dumping aimed at eliminating competitors as illegal [3] - The new Anti-Unfair Competition Law, effective from October 15, introduces specific regulations against "involution" competition, prohibiting platforms from forcing sellers to price below cost [3][5] - These legal changes are expected to create a synergistic effect in regulating "involution" competition and chaotic low-price dumping across various market levels [3] Group 3: Market Outlook - The current strategy of "price for volume" is showing diminishing returns, with further price cuts unlikely to stimulate demand and instead harming profitability [5] - The upcoming traditional peak season in Q4 is anticipated to improve pricing stability and enhance profit margins for express delivery companies [5] - The express delivery sector has seen collective stock price increases recently, with Jitu rising over 50% and Shentong over 40% in the past month, indicating potential valuation recovery [5]

Group 1 - The express logistics sector experienced significant gains on July 30, with Shentong Express rising by 7%, YTO Express by 5%, and other companies like Yunda and Huapengfei also seeing increases [1] - Shentong Express, a leading private express company in China, reported a market capitalization of 23.4 billion and a trading volume increase of 5.21% [1] - YTO Express, a comprehensive logistics operator, has a market capitalization of 53.94 billion and focuses on expanding its international express and supply chain services [1] Group 2 - The State Post Bureau emphasized the need for improved industry regulation and the establishment of market rules to combat "involution" competition in the express delivery sector [2] - The Central Financial Committee's recent meeting highlighted the importance of promoting a unified national market and addressing low-price competition among enterprises [2] - The Yiwu Postal Administration announced an increase in the minimum express delivery price by 0.1 RMB to 1.2 RMB, effective July 18 [2] Group 3 - Current price adjustments in the Yiwu region have led to a 0.05 RMB increase per ticket, with expectations for similar measures in the southern grain-producing areas [4] - The express delivery industry is anticipated to see improved pricing and profitability in the fourth quarter, driven by regulatory guidance and a shift towards high-quality development [4] - If regulatory policies continue to be implemented, the industry may transition from price wars to value wars, leading to long-term improvements in express companies' performance [4]

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Core Points - The State Post Bureau held a meeting on July 29 to address "involution" competition and illegal charges for package collection in rural areas, aiming to promote high-quality development in the express delivery industry [1][3] - The meeting emphasized the need for express companies to enhance their awareness of the overall situation and implement the directives from the central government [3][4] - The meeting highlighted the importance of compliance, risk management, and the establishment of a long-term mechanism to ensure stable operations and high-quality development of enterprises [3][4] Industry Development - Since the 18th National Congress, the express delivery industry in China has experienced rapid growth [3] - Express companies are encouraged to innovate their business models and improve the adaptability and sustainability of services in rural areas [3][4] - The meeting called for strengthening the political guidance of party building in the industry to enhance governance and management [3][4] Regulatory Measures - The postal management department is urged to increase regulatory and enforcement efforts to protect the legal rights of consumers and delivery personnel [3][4] - The meeting included discussions among representatives from major express companies such as Zhongtong, Yuantong, Yunda, Shentong, and Jitu, focusing on regulatory issues and suggestions for improvement [4]

Investment Rating - The report maintains a "Positive" investment rating for the express delivery industry [8]. Core Insights - The express delivery industry is expected to experience a "de-involution" phase, with significant policy catalysts anticipated in the upcoming months. The transition from the off-peak to peak season is expected to enhance the pricing power of express companies [2][11]. - The pricing increase duration is projected to be between 2 to 4 months, with a price increase of 0.06 to 0.30 yuan per ticket expected during the peak season. The profit per ticket is anticipated to improve by 0.01 to 0.10 yuan in Q4 [2][11]. - The average profit elasticity for e-commerce express delivery is expected to reach double digits, with second-tier express companies showing even more significant profit elasticity [2][11]. Summary by Sections Event Description - The report discusses the recent meeting of the State Post Bureau, which emphasized the need to combat "involution" in the express delivery sector. It addresses three main questions: the timing and sustainability of the current "de-involution," the profit elasticity for core enterprises, and the tools available for this process [6]. Pricing Dynamics - The report analyzes historical pricing trends, indicating that the current "de-involution" phase may be catalyzed by policy changes, with pricing increases expected to last longer than in 2024 but shorter than in 2021. The report references past data to illustrate potential outcomes [11][20]. Profit Elasticity - The report provides a detailed analysis of profit elasticity for major express companies, projecting that if the industry begins to raise prices in August and continues until December, the net profit for companies like Zhongtong, Yunda, and Shentong could reach 95.8 billion, 40.6 billion, and 17.4 billion yuan respectively, with corresponding profit elasticities of 6.5%, 12.7%, and 27.9% [20][21]. Tools for "De-involution" - The report identifies two main strategies for achieving "de-involution": regulatory measures to curb price wars and encouraging mergers and acquisitions among leading companies to optimize competition. The acquisition of Danbird Logistics by Shentong Express is highlighted as a significant step towards improving market dynamics [25][26]. Investment Recommendations - The report suggests actively seizing opportunities presented by the "de-involution" phase, recommending companies such as YTO Express, Shentong Express, Zhongtong Express, Jitu Express, and Yunda [21].

Investment Rating - The report maintains an "Outperform" rating for the transportation industry [4][6][7]. Core Views - The "anti-involution" policy in the express delivery sector is expected to ease competition, with Shentong Express planning to acquire Dan Niao Logistics [3][54]. - The shipping industry is anticipated to see a bottoming out of oil transportation rates during the summer, with potential upward pressure on rates due to supply constraints and demand changes [1][22][23]. - The aviation sector is experiencing a decline in flight volumes, but the domestic passenger market is expected to continue optimizing supply and demand dynamics through 2025 [2][37][46]. Summary by Sections Shipping Sector - In July, crude oil entered the off-season, leading to a softening of oil freight rates, with expectations for a bottoming out during the summer [1]. - The current supply situation is relatively tight, and marginal changes in demand could significantly impact freight rates [1][22]. - Recommendations include China Merchants Energy and China Merchants Shipping, with a focus on China Merchants South Oil [1]. Aviation Sector - The overall and domestic passenger flight volumes have decreased by 1.5% and 1.4% respectively compared to the previous week, but remain above 2019 levels [2][37]. - The average ticket price for domestic routes has dropped by 8.0% year-on-year, while passenger load factors have improved slightly [2][37]. - Investment recommendations include closely monitoring ticket price performance during the peak summer season, with a focus on China National Aviation, Eastern Airlines, Southern Airlines, and Spring Airlines [2][46]. Express Delivery Sector - The "anti-involution" policy has been implemented to combat excessive competition, with price increases already observed in regions like Yiwu [3][53]. - The introduction of unmanned logistics vehicles is expected to reduce costs significantly for leading companies like SF Express and Zhongtong Express [3][61]. - Investment suggestions include SF Express, Zhongtong Express, YTO Express, and Shentong Express, with a focus on the impact of the "anti-involution" policy [3][63]. Key Company Earnings Forecasts and Investment Ratings - China Merchants Energy, China Merchants Shipping, SF Express, Zhongtong Express, and YTO Express are all rated as "Outperform" [7]. - SF Express is expected to maintain a growth rate of 15-20% over the next two years, with a PE ratio of approximately 20 times in 2025 [3][63]. - China Merchants Shipping reported a 20.1% year-on-year increase in revenue for Q1 2025, indicating strong performance [27].

Investment Rating - The report maintains a "Positive" investment rating for the express delivery industry [1] Core Insights - The express delivery industry is experiencing a trend of "anti-involution," leading to a revaluation of its value [3] - The report emphasizes the importance of regulatory actions in stabilizing the industry and improving profitability [3] - Short-term price improvements are expected, with potential for further increases during peak seasons [3] Summary by Sections 1. Review of 2021's "Anti-Involution" - In 2021, the express delivery industry saw a significant policy push to protect courier rights, leading to price increases and improved profitability [3][19] - The average price per ticket for the "Tongda" system increased by approximately 0.6 yuan from the low point in August 2021 to January 2022 [3] - By Q4 2021, YTO Express reported a net profit of 1.15 billion yuan, a year-on-year increase of 202% [3] 2. Current Industry Dynamics - After 2023, the industry has re-entered a phase of price competition due to increased capacity and market share strategies, leading to profitability nearing historical lows [3][39] - The National Postal Administration has clearly opposed "involution-style" competition, indicating a regulatory environment similar to that of 2021 [3][65] - The report suggests monitoring regulatory developments in key production areas like Yiwu and Guangdong for potential price adjustments [3] 3. Short-term and Long-term Outlook - Short-term price improvements are anticipated, particularly in traditionally low-price cities, with potential for broader price increases in peak seasons [3][69] - The report forecasts a shift from price wars to value competition, which could enhance long-term profitability for leading express companies [3][69] - Investment recommendations include focusing on A-shares such as Shentong Express, YTO Express, and Yunda Express, as well as H-shares like Jitu Express and ZTO Express [3] 4. Financial Performance Metrics - In Q1 2025, the net profit per ticket for major companies like Zhongtong, YTO, Yunda, and Shentong fell close to or below historical lows [50] - The report highlights significant cash flow pressures, with some companies experiencing cash flow performance worse than the bottom of 2021 [50] - The report provides elasticity calculations indicating that price increases could significantly enhance profitability for express companies [70]

Core Viewpoint - The article highlights the issue of "rounding up" charges in various sectors such as express delivery, parking, and shared services, which has raised public concern regarding fairness and transparency in pricing practices [1][14]. Express Delivery Sector - Several express delivery companies have been reported to engage in unfair "rounding up" practices, where the weight of packages is inflated for charging purposes [2][4]. - For instance, YTO Express marked a 2.7 kg package as 4 kg, increasing the charge by nearly 50%, while Jitu Express charged for a 3 kg weight for a 2.1 kg package [3][4]. - A significant number of express delivery companies (about half) have been found to have similar issues in their weight charging practices [4]. - The new regulations effective from April 1, 2024, stipulate that billing weight must be in kilograms and retain at least one decimal place, making the "rounding up" practices clearly illegal [5][17]. Parking Sector - Parking fees are often charged based on a minimum time unit, leading to situations where even a slight delay results in significantly higher charges [7][10]. - For example, a consumer was charged for 45 minutes despite only using 30 minutes and 7 seconds of parking time, highlighting the unfairness in the billing system [9][11]. - The article notes that this practice is widespread and often seen as a "hidden rule" in many parking facilities [8][10]. Shared Services Sector - Similar "rounding up" practices are observed in shared services like charging stations, where consumers are charged for longer durations than they actually used [12][13]. - A case was mentioned where a consumer was charged for 30 minutes of charging despite only using 5 minutes, which was deemed unreasonable [13][19]. - The article emphasizes that such practices infringe upon consumers' rights to fair transactions as outlined in consumer protection laws [18][20]. Regulatory Response - The National Postal Administration has taken notice of the express delivery sector's "rounding up" practices and has initiated investigations, urging companies to comply with national standards for weight billing [17]. - The article calls for similar scrutiny and reform in the parking and shared services sectors to ensure fair pricing practices [23].

Group 1 - The Gansu Provincial Conference on Promoting the Development of the Private Economy and Optimizing the Business Environment was held in Lanzhou, with participation from Yunda Holdings and local government leaders [1] - Gansu's government expressed appreciation for private enterprises' contributions to pandemic control and economic recovery, encouraging further investment and collaboration [1] - Yunda Holdings aims to leverage Gansu's unique resource advantages to enhance integration between the express logistics industry and agriculture, manufacturing, and consumer internet sectors [1] Group 2 - Yunda Holdings primarily operates in the express delivery business, along with warehousing and supply chain services, covering all 31 provinces in China and over 30 countries globally [2] - In 2019, Yunda delivered over 10 billion packages worldwide, ranking high among major express companies in terms of delivery time and customer satisfaction [2] - The company is committed to high-quality development by utilizing technology and data to create a smart logistics ecosystem, striving to become a globally competitive comprehensive express logistics service provider [2]

Investment Rating - The transportation sector has shown a positive trend with a 3.2% increase in the transportation index, outperforming the Shanghai Composite Index by 1.5% during the week of July 19-25, 2025 [1][12]. Core Insights - The transportation sector's fund holdings increased to 32.5 billion yuan, a 17.0% rise compared to the previous quarter, with a market share of 1.95% [2]. - The express delivery segment saw a significant year-on-year growth of 15.8% in June, with SF Express leading the growth [2]. - The logistics sector is under pressure, particularly in hazardous materials logistics, but there is a push towards smart logistics, with Hai Chen Co. being recommended [3]. - The aviation sector is experiencing a steady recovery, with a 3% increase in domestic passenger volume in June compared to the previous year [4]. - The shipping sector is stabilizing, with the Baltic Dry Index (BDI) increasing by 10.9% week-on-week, indicating a positive trend in dry bulk shipping [5][34]. Summary by Sections Transportation Market Review - The transportation index rose by 3.2%, with the airport sector showing the highest increase of 5.6% [1][12]. Industry Fundamentals Tracking Shipping and Ports - The export container freight index (CCFI) was 1261.35 points, down 3.2% week-on-week and down 40.9% year-on-year [20]. - The domestic container freight index (PDCI) increased by 1.1% week-on-week, indicating a slight recovery in domestic shipping [28]. Aviation and Airports - The average daily flights reached 16,945, a 3.68% increase year-on-year, with domestic flights up by 2.51% [4]. - The introduction of a new ticket purchasing feature on the airline service platform is expected to enhance customer experience [4]. Rail and Road - National highway freight traffic increased by 0.67% week-on-week, with a year-on-year increase of 2.01% [6][76]. - The railway passenger volume in June was 373 million, a 3.61% increase year-on-year [73]. Express Delivery - The express delivery business volume reached 16.87 billion pieces in June, with a notable increase in the market share of SF Express [2][44].