Core Viewpoint - J&T Express plans to issue HKD 4.65 billion zero-coupon guaranteed convertible bonds, with an initial conversion price of HKD 14.55 per B share, representing a premium of approximately 30.85% over the closing price on January 22 [1] Group 1 - The issuance of convertible bonds is expected to create value for shareholders due to lower financing costs [1] - The company is actively conducting share buybacks and has growth potential in its business [1] - The mid-term growth in J&T's East Asia and new market operations is considered stable, and any stock price corrections may present better buying opportunities [1]

Core Insights - The event "New Opportunities for Apparel Export" and "Logistics Industry Inspection in Indonesia" was successfully held in January 2026, focusing on exploring efficient supply chain solutions for Chinese brands in Southeast Asia [1] - A delegation of over twenty logistics and supply chain leaders from domestic apparel and home textile companies conducted an in-depth investigation of J&T Express's localized logistics service system in Indonesia [1] Group 1: Logistics Infrastructure - J&T Express showcased its key operational nodes in Indonesia, including an automated sorting capacity exceeding one million packages daily, peaking at 2.5 million during high seasons [2] - The logistics network established by J&T Express covers over 17,000 islands in Indonesia, with more than 10,000 service points, 5,800 trunk vehicles, and 64 automated transfer centers [2] - This extensive infrastructure supports efficient circulation of e-commerce packages, particularly for light industrial products like apparel [2] Group 2: Digital Solutions - J&T Express presented systematic solutions to common cross-border logistics challenges such as customs efficiency, last-mile coverage, and reverse logistics [3] - The company has implemented a "warehouse and distribution integration" model, which has helped some apparel brands reduce inventory turnover costs by over 30% [3] - The logistics system developed by J&T Express enhances the predictability of cross-border fulfillment, achieving next-day delivery in Jakarta and stable delivery times of 2-3 days in core areas of Java Island [3] Group 3: Collaborative Ecosystem - The Secretary-General of the China Federation of Logistics and Purchasing's Apparel Logistics Branch highlighted the significant growth potential in the Indonesian market for logistics and e-commerce [4] - The inspection deepened the industry's understanding of the Southeast Asian market and laid a practical foundation for mutually beneficial cooperation [4] - J&T Express is positioned to evolve from a logistics service provider to a strategic partner for Chinese brands expanding into Southeast Asia, reinforcing its long-term competitive edge in cross-border logistics [4]

Core Insights - The "New Opportunities for Apparel Export" seminar and logistics industry inspection in Indonesia were successfully held, supported by J&T Express and organized by the China Federation of Logistics and Purchasing's Apparel Logistics Branch [1][2] - A delegation of logistics and supply chain leaders from over twenty domestic apparel and home textile companies, including Bosideng, Xtep, and Urban Beauty, conducted research on J&T Express's localized logistics service system in Jakarta and Surabaya [1][2] Company Overview - J&T Express entered the Indonesian market in 2015 and has established a logistics network covering over 17,000 islands nationwide, with more than 10,000 service points, 5,800 trunk vehicles, and 64 automated transfer centers [1][2] - The automated sorting capacity at J&T's transfer center in Jakarta exceeds one million packages daily, reaching a peak of 2.5 million packages [1][2] Logistics Capabilities - J&T Express has developed a cloud warehouse network in Indonesia, with Jakarta and Surabaya as core hubs, integrating first-mile transportation, customs clearance, warehousing management, and last-mile delivery [1][2] - The company achieves next-day delivery in Jakarta and stable delivery times of 2 to 3 days in key areas of Java Island, significantly enhancing the predictability of cross-border fulfillment [1][2]

Core Viewpoint - The performance landscape of China's major express delivery companies is becoming clearer as they report their 2025 operational data, indicating a shift towards high-quality development in the industry, with significant growth in business volume and revenue [1][6]. Group 1: Performance of Major Companies - SF Holding achieved a milestone in 2025 with annual revenue surpassing 300 billion yuan, driven by logistics and international business growth, despite a slight decline in per-package revenue [2][6]. - YTO Express maintained its leading position within the Tongda system, reporting 683.18 billion yuan in revenue and 311.44 billion packages delivered, with a focus on cost control and international expansion [3][6]. - Shentong Express emerged as a significant player in 2025, with a 28.23% year-on-year increase in revenue to 58.36 billion yuan, benefiting from the consolidation of Daniao Logistics [3][6]. - Yunda Express experienced a decline in package volume but managed to increase per-package revenue, indicating a strategic shift towards rational development and profitability [4][6]. Group 2: Industry Trends and Developments - The express delivery industry is transitioning from low-price competition to high-quality development, with companies prioritizing profitability over volume [6][8]. - Technological advancements and green transformation are becoming key drivers of industry growth, with increased investment in smart logistics and sustainable practices [7][8]. - Internationalization and collaborative development are emerging as strategic priorities for leading companies, enhancing their global service networks and competitiveness [7][8]. Group 3: Future Outlook - The ongoing optimization of industry structure is expected to enhance the resource integration capabilities and brand advantages of leading companies, while compressing the survival space for smaller firms [8]. - Competition surrounding service upgrades, technological innovation, and international expansion is anticipated to intensify, positioning the Chinese express delivery industry for robust resilience and growth potential in the global logistics market [8].

Investment Rating - The report maintains an "Overweight" rating for the aviation and oil shipping sectors [4]. Core Insights - The aviation sector is expected to see record passenger flow during the Spring Festival, with a projected increase of approximately 5.3% year-on-year, reaching 9.5 billion trips in 2026. The report anticipates strong demand during the Spring Festival, with limited additional flights due to strict management by airlines [4]. - In the oil shipping sector, high oil freight rates are expected to persist, with a significant year-on-year increase in tanker profits anticipated for Q1 2026. The report highlights a bullish long-term outlook for oil shipping driven by global oil production growth and an aging fleet [4]. - The express delivery sector is projected to experience a growth rate of 14% in 2025, with a notable recovery in profitability driven by effective measures against excessive competition [4]. Summary by Relevant Sections Aviation - The report forecasts a record high in passenger flow during the Spring Festival, with a year-on-year growth of 5.3% in civil aviation passenger transport [4][5]. - The pre-sale trends for airline tickets are positive, and the overall flight capacity increase during the Spring Festival is expected to be limited, benefiting airline revenue management [4]. - The report suggests a strategic investment in the aviation sector, highlighting companies such as Air China, China Eastern Airlines, and Spring Airlines as potential beneficiaries [4]. Oil Shipping - Oil freight rates are expected to remain high, with a significant increase in tanker profits projected for Q1 2026 due to rising oil production from the Middle East and South America [4]. - The report emphasizes the long-term bullish logic for oil shipping, driven by increased demand and a tightening supply due to an aging fleet [4]. - Recommended companies in the oil shipping sector include COSCO Shipping Energy Transportation and China Merchants Energy Shipping [4]. Express Delivery - The express delivery sector is expected to see a growth rate of 14% in 2025, with a decline in growth rate towards the end of the year [4]. - The report notes that measures against excessive competition have led to a recovery in profitability for leading companies in the sector [4]. - Companies such as SF Express and ZTO Express are highlighted as key players to watch in this sector [4].

Investment Rating - The report recommends a "Buy" rating for key companies including SF Holding, Cao Cao Travel, and Jitu Express [8]. Core Insights - The report highlights the explosive growth of instant retail driven by major companies' investments, suggesting that investors should seize opportunities in SF Express's urban delivery segment [1]. - The logistics sector is expected to benefit from the rapid growth of overseas e-commerce and the ongoing recovery in domestic demand, with a focus on companies like Jitu Express and Zhongtong Express [3][18]. - The aviation sector is projected to see a historical high in passenger volume during the 2026 Spring Festival, with a year-on-year growth of approximately 5.3% [11][12]. Summary by Sections Weekly View and Market Review - The transportation sector index rose by 1.76%, outperforming the Shanghai Composite Index by 0.93 percentage points [21]. - The top-performing sub-sectors included warehousing logistics, road freight, and public transport, with increases of 6.05%, 5.91%, and 4.09% respectively [21]. Aviation - The Civil Aviation Administration of China forecasts a record 95 million passengers during the 2026 Spring Festival, with domestic and international routes showing significant growth [11][12]. - The aviation sector is expected to maintain a positive outlook due to low supply growth and recovering demand, with a focus on business travel and international flight recovery [12]. Shipping and Ports - The VLCC market is experiencing high rates due to geopolitical risks, with daily rates reaching $107,937 on the Middle East route [13]. - Dry bulk freight rates are recovering, with the BDI index reaching 1,762 points [14]. - The report emphasizes the potential for LNG transport to enter a different economic cycle, highlighting companies like CIMC Anrui [16]. Logistics - The report identifies two main investment themes in the express delivery sector: overseas expansion driven by e-commerce growth and domestic market consolidation amid competitive pressures [3][18]. - In December 2025, the express delivery industry handled 18.2 billion packages, reflecting a year-on-year growth of 2.3% [19]. - The report notes a divergence in performance among leading express companies, with Zhongtong and YTO showing growth while SF Express faced a decline due to strategic business adjustments [20].

Investment Rating - The report recommends a "Buy" rating for key companies such as SF Holding, Jitu Express, and Caocao Travel [8]. Core Insights - The report highlights the explosive growth of instant retail driven by major companies increasing their investments, particularly Alibaba's commitment to enhancing its Taobao flash purchase services to achieve market leadership. It suggests capitalizing on investment opportunities in SF Express's urban delivery segment [1]. - The logistics sector is expected to benefit from two main investment themes: international expansion due to the rapid growth of overseas e-commerce and a focus on improving operational efficiency amid competitive pressures [3][18]. - The aviation sector is projected to see a significant recovery in passenger volumes, with the Civil Aviation Administration of China forecasting a record high of 95 million passengers during the 2026 Spring Festival, reflecting a year-on-year growth of approximately 5.3% [11][12]. Summary by Sections Transportation Sector Overview - The transportation sector index rose by 1.76% in the week of January 19-23, 2026, outperforming the Shanghai Composite Index by 0.93 percentage points [21]. - The top-performing sub-sectors included warehousing and logistics, road freight, and public transport, with increases of 6.05%, 5.91%, and 4.09% respectively [21]. Aviation - The report emphasizes the long-term positive outlook for the aviation sector, driven by low supply growth and recovering demand, which is expected to narrow the supply-demand gap. It also notes the potential for ticket prices to recover and airline profitability to improve [12][11]. - Key companies to watch include China Southern Airlines, China Eastern Airlines, and Spring Airlines [12]. Shipping and Ports - The VLCC market is experiencing high rates due to geopolitical risks, with the Middle East route rates reaching $107,937 per day as of January 23, 2026 [13]. - The dry bulk freight rates have rebounded, with the BDI index closing at 1,762 points on January 23, 2026 [14]. - The report suggests focusing on companies like China Merchants Energy and COSCO Shipping Energy for potential investment opportunities [15][16]. Logistics - The express delivery sector is seeing growth driven by international e-commerce, with Jitu Express recommended as a key player [18]. - The report notes that the express delivery industry handled 18.2 billion packages in December 2025, reflecting a year-on-year growth of 2.3% [19]. - Major players such as YTO Express and Shentong Express are highlighted for their market share gains, while SF Express is noted for its strategic business adjustments [20].

Core Viewpoint - The logistics industry is preparing for the upcoming Spring Festival, with several companies announcing service adjustments and resource fees to manage increased demand and operational challenges during the holiday period [1][2][5]. Group 1: Service Adjustments - SF Express, JD Logistics, and Deppon have announced that they will implement resource adjustment fees during the Spring Festival due to limited resource allocation and extreme weather conditions [2][5]. - SF Express will charge a resource adjustment fee of 0.1-1.5 yuan/kg for shipments over 20kg from January 19 to February 15, 2026, and additional fees during the holiday period [2]. - JD Logistics will add a resource adjustment fee of 0.1-1.2 yuan/kg for express heavy goods from January 19 to February 23, 2026, with varying fees for different customer agreements [5]. Group 2: Service Continuity - JD Logistics will continue to provide services such as warehousing, delivery, and express collection during the Spring Festival, with all "Asia No. 1" smart industrial parks operating around the clock [8]. - Deppon will also implement resource adjustment fees for certain customers and products during the peak period from January 19 to February 23, 2026 [8][9]. Group 3: Temporary Service Suspensions - Yimidida and Shunxin Express will suspend collection and delivery services during the Spring Festival, with Yimidida ceasing operations from February 10 to February 25, 2026, and Shunxin Express from February 12 to February 24, 2026 [10][12]. - Cross-border Express will maintain normal collection and delivery services but will not guarantee timeliness for shipments during the holiday period [14]. Group 4: Industry Trends - The Spring Festival is a peak period for logistics demand, leading to increased operational costs due to labor shortages and uneven cargo volumes [9]. - The practice of charging "resource adjustment fees" during the Spring Festival has become a common industry standard, primarily affecting commercial clients [9].

Industry Trends - In 2026, companies will focus on localized operations and technology-driven overseas warehouse systems, particularly in the U.S. market, enhancing operational efficiency through "micro-headquarters" that integrate marketing, customer service, and supply chain[1] - By 2025, 44% of Chinese companies have developed detailed plans for the Middle East, with 40% achieving profitability, indicating a shift from rapid expansion to meticulous cultivation in this market[2] - AI is reshaping marketing strategies, with over 70% penetration in influencer marketing and precise targeting, significantly improving brand exposure and sales[4] - The Chinese robotics industry is transitioning from product export to brand globalization, with a 54.9% increase in industrial robot exports in the first three quarters of 2025[4] Brand Dynamics - Alibaba's AliExpress aims to enhance brand globalization through overseas warehouse services, targeting a tenfold increase in GMV for participating merchants[13] - Pop Mart's overseas revenue surged from 137 million yuan to 5.593 billion yuan in four years, attributed to a shift from a distributor model to direct sales and the implementation of a cloud ERP system[14] - Jitu Express reported a 300 billion package volume in 2025, with overseas business accounting for nearly 30% of total operations, driven by a 67.8% growth in Southeast Asia[16] - The pet brand Vetreska achieved over $30 million in sales in two years by targeting North American middle-class consumers and utilizing localized marketing strategies[18]

Core Viewpoint - The logistics industry is preparing for the upcoming Spring Festival, with major companies like SF Express, JD Logistics, and Deppon announcing service adjustments and resource adjustment fees to manage increased demand and operational challenges during the holiday period [1][2][5]. Group 1: Service Adjustments and Fees - SF Express will implement a resource adjustment fee of 0.1-1.5 yuan/kg for shipments over 20kg from January 19 to February 15, 2026, and will charge additional fees during the holiday period [2]. - JD Logistics will add a resource adjustment fee of 0.1-1.2 yuan/kg for express heavy cargo from January 19 to February 23, 2026, with varying fees for different customer agreements [5]. - Deppon will charge a resource adjustment fee of 0.2-0.5 yuan/kg for certain customers and products from January 19 to February 14, 2026, and additional fees during the holiday period [6]. Group 2: Operational Challenges - The Spring Festival is a peak time for logistics demand, leading to increased operational costs due to labor shortages and uneven cargo volumes [7]. - Many frontline workers, such as couriers and drivers, are migrant workers returning home for the holiday, resulting in a temporary labor shortage that necessitates hiring temporary workers [7]. - Companies are expected to incentivize frontline staff to ensure service continuity during the holiday period [15]. Group 3: Service Continuity and Limitations - Cross-Express will maintain normal pickup and delivery services during the Spring Festival, but will not guarantee delivery times for shipments in lower-tier cities [13]. - Some companies, like Yimi Dida and Shunxin Express, will suspend collection and delivery services during the holiday, with Yimi Dida ceasing operations from February 10 to February 25, 2026 [8][11]. - JD Logistics will continue to provide various services, including warehousing and instant delivery, with a focus on meeting customer needs during the holiday [6].