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]