Core Insights - J&T Express reported a total revenue of $5.5 billion for the first half of 2025, marking a year-on-year increase of 13.1% [1][2] - The adjusted net profit reached $156.3 million, a significant rise of 147.1% compared to the previous year [1][2] - The total parcel volume for the first half was 13.99 billion, reflecting a growth of 27%, with Southeast Asia showing a remarkable increase of 57.9% [1][2] Financial Performance - Revenue for the first half of 2025 was $5,498.7 million, up from $4,861.7 million in 2024, representing a 13.1% increase [2] - Express service revenue was $5,341.4 million, a 12.7% increase year-on-year [2] - Adjusted EBITDA was $435.6 million, showing a 24.2% growth compared to the previous year [2] Market Dynamics - In the Chinese market, J&T Express's market share increased to 11.1%, with parcel volume growing by 20% to 10.6 billion [4][6] - The average revenue per parcel in China decreased by 13% to $0.30 due to intense market competition [3][4] - The company is dynamically adjusting pricing strategies to maintain market share amid ongoing price declines in the industry [3][4] Cost Management - The company reported a decrease in single parcel costs, with transportation and sorting costs down by $0.1 and $0.13 respectively [6] - Management indicated that there is still room for improvement in cost efficiency, particularly in transportation and sorting costs compared to competitors [6] Strategic Initiatives - J&T Express has invested over 900 unmanned delivery vehicles in the Chinese market, aiming to enhance operational efficiency [4][6] - The company is focusing on developing reverse logistics and single-item delivery services to mitigate the impact of competitive pricing [7] - In Southeast Asia, J&T Express's market share rose to 32.8%, with a revenue increase of 29.6% to $1.97 billion [8][9] International Expansion - The new markets (Saudi Arabia, UAE, Mexico, Brazil, and Egypt) generated $362.4 million in revenue, a 24.3% increase year-on-year [9][10] - The company is adopting a franchise model in overseas markets, with 30% of the Southeast Asia network operated by partners [10] - Future strategies include leveraging automation and digital management experiences from China to reduce costs in Southeast Asia [10]

Core Viewpoint - YTO Express reported a revenue of 35.883 billion yuan for the first half of 2025, marking a year-on-year growth of 10.19%, while net profit attributable to shareholders decreased by 7.90% to 1.831 billion yuan [1] Group 1: Company Performance - YTO Express completed a total express delivery volume of 14.863 billion pieces, representing a year-on-year increase of 21.79%, surpassing the industry average growth rate by 2.5 percentage points [1] - The company is focusing on digitalization and intelligent development, expanding its logistics ecosystem, and enhancing international market presence [1] Group 2: Industry Trends - The State Post Bureau held a meeting in late July to address "involution" competition in the express delivery industry, promoting high-quality development and addressing issues like illegal charges in rural areas [2] - As the industry moves towards "anti-involution," express delivery prices are expected to stabilize and recover, potentially improving the profitability of leading express companies [2] Group 3: International Expansion - YTO Express is advancing its international development strategy by leveraging trends in cross-border e-commerce and the Belt and Road Initiative, actively expanding into emerging markets [2] - The company is optimizing its cross-border logistics product matrix and enhancing its global service capabilities through a well-established overseas network and diverse fleet [2]

Core Viewpoint - The express delivery industry in China is experiencing a "volume increase and price drop" trend, prompting companies to focus on international markets for higher profits amid intensified domestic competition [1][4]. Industry Overview - The express delivery sector is a crucial part of the modern circulation system, connecting various industries and integrating online and offline services [3]. - In the first seven months of this year, China's express delivery volume reached 1,120.5 billion pieces, marking an 18.7% year-on-year increase [4]. Market Dynamics - The industry is projected to exceed 2.5 trillion pieces by 2030, with a compound annual growth rate of 8%-10%, leading to a market size surpassing 2.8 trillion yuan [4]. - Despite revenue growth, express delivery companies face declining per-package income, indicating a significant challenge in the industry [5][6]. Company Performance - In July, SF Express reported revenue of 24.847 billion yuan, a 9.95% increase, but with a 14.02% drop in per-package income [5]. - YTO Express, Yunda, and Shentong also reported revenue growth, but with continued declines in per-package income, highlighting the "volume increase and price drop" issue [5]. Competitive Landscape - The industry is shifting from a "low-price competition" model to a focus on service quality and efficiency, as companies aim to break the cycle of negative profit margins and declining service quality [6][7]. - Regulatory bodies are actively promoting measures to combat "involution" in competition, encouraging companies to enhance service quality rather than engage in price wars [6][7]. International Expansion - The global cross-border logistics market is expected to grow from 13.3 trillion yuan in 2020 to 18.6 trillion yuan by 2024, with a compound annual growth rate of 8.75% [8]. - Chinese express companies are accelerating their international expansion, with significant increases in their international development index [8][9]. - Companies like Cainiao and JD Logistics are enhancing their international logistics capabilities, establishing new routes and partnerships to improve service efficiency [9][10]. Future Outlook - The express delivery industry is expected to continue its internationalization, driven by the growth of cross-border e-commerce and international trade [10].

Core Viewpoint - The recent increase in express delivery fees in key e-commerce regions like Guangdong and Zhejiang is causing significant anxiety among small e-commerce businesses, as it directly impacts their profit margins and pricing strategies [1][2][3]. Summary by Sections Impact on Small E-commerce Businesses - Many small e-commerce merchants are feeling the pressure from the increase in delivery fees, with some reporting that even a small increase of 0.1 yuan can significantly erode their profits [3][5]. - For instance, a small business owner in Guangzhou noted that a 0.4 yuan increase in delivery fees has led to a 3% drop in profit margins, which is critical for low-margin products priced around 9.99 yuan [6][8]. - Another seller in Dongguan reported a more severe increase of 0.7 yuan per order, resulting in an additional monthly cost exceeding 12,000 yuan, effectively halving her monthly profit [8][9]. Cost Management Strategies - In response to rising costs, small merchants are seeking ways to cut expenses, such as switching to generic packaging and eliminating promotional discounts [9][10]. - The inability to pass on costs to consumers due to price sensitivity in the low-cost product segment is forcing these businesses to absorb the increased delivery fees [4][9]. Industry Context and Trends - The express delivery industry in Guangdong handled 42.5 billion packages last year, accounting for 24% of the national total, with a revenue of 304 billion yuan [12]. - Despite the increase in delivery fees, many express delivery workers have not seen a corresponding rise in their compensation, as their income remains tied to the volume of deliveries and service commissions [19]. - The current trend of rising delivery fees is seen as a response to the long-standing issue of "internal competition" within the industry, which has led to unsustainable pricing practices [20][24]. Future Outlook - Experts suggest that the recent price adjustments may signal a shift from a low-price competition model to one focused on service quality, potentially leading to further price increases in the future [24]. - The industry may undergo consolidation, with weaker players exiting the market, which could enhance overall market stability and profitability [24].

Core Viewpoint - The recent increase in express delivery fees in key e-commerce regions like Guangdong and Zhejiang is attributed to a response to "internal competition," leading to higher costs for businesses, particularly those with high shipping volumes [3][5][7]. Group 1: Price Increases and Impact on Businesses - Many express delivery companies have raised prices for e-commerce clients, with increases ranging from 0.3 to 0.7 yuan per package in Guangdong, which is a significant area for e-commerce logistics [3][5]. - For businesses like Mr. Su's, which ships over 100,000 packages monthly, a 0.3 yuan increase translates to an additional cost of 30,000 yuan per month [3][5]. - Smaller businesses may not feel the impact of a few cents per package, but for larger shippers, even a one-cent increase can lead to substantial cost increases [7]. Group 2: Industry Trends and Historical Context - The express delivery industry has been experiencing "internal competition" for years, with major companies like "Three Links and One Reach" (YTO, Shentong, Zhongtong, and Yunda) engaging in price wars to attract customers [7]. - The average price per package in the express delivery industry has decreased from 13.40 yuan in 2015 to 8.02 yuan in 2024, indicating a significant decline in revenue per package [7]. - In July, the average revenue per package for Shentong, YTO, and Yunda was reported at 1.97 yuan, 2.08 yuan, and 1.91 yuan respectively, showing year-on-year declines of 1.50%, 7.20%, and 3.54% [7]. Group 3: Regulatory Responses - The National Development and Reform Commission and the State Administration for Market Regulation have proposed amendments to the Price Law to address unfair pricing practices and regulate "internal competition" in the market [8]. - A meeting held by the State Post Bureau aimed to discuss the legal governance of "internal competition," which is expected to stabilize the market and protect the rights of delivery personnel, potentially benefiting company profits [9].

Group 1 - The core viewpoint indicates that the express delivery industry in China is experiencing significant growth, with a total volume of 16.4 billion parcels in July 2025, representing a year-on-year increase of 15.1% [1] - For the first seven months of 2025, the total parcel volume reached 1,120.5 billion, showing an 18.7% year-on-year growth, surpassing the postal administration's forecast of over 8% for the entire year [1] - The growth is driven by trends towards smaller packages, e-commerce promotions, and convenient return policies [1] Group 2 - In the e-commerce express delivery sector, major players such as YTO Express, Yunda Express, and Shentong Express reported year-on-year growth rates of 20.8%, 7.6%, and 11.9% respectively in July 2025 [1] - For the first seven months of 2025, their respective growth rates were 21.6%, 15.1%, and 19.3% [1] - SF Express led the industry with a 33.7% year-on-year growth in July 2025, and a 26.9% growth for the first seven months, attributed to its operational strategies and incentives [1] Group 3 - The average revenue per parcel in the industry was reported at 7.36 yuan in July 2025, reflecting a year-on-year decline of 5.33% and a month-on-month decline of 1.76% [2] - The decline in revenue per parcel is influenced by the trend towards smaller packages and ongoing price wars, although there are indications of potential recovery in August due to reduced competition [2] - The report suggests that the performance of franchise express companies may improve in the context of reduced competition [2] Group 4 - The express delivery sector includes several Hong Kong-listed companies such as ZTO Express, SF Holding, SF Express City, JD Logistics, and YTO International Express [3]

Core Viewpoint - Recent price increases in express delivery services in regions like Guangdong and Zhejiang are primarily targeting e-commerce clients with low shipping costs, with adjustments ranging from 0.3 to 0.7 yuan per package, establishing a minimum price of 1.4 yuan per package [3][7]. Group 1: Price Increase Details - Multiple express delivery companies in Guangdong and Zhejiang have raised prices for e-commerce clients, with Guangdong being a key area for these adjustments [7]. - The price increase has been in effect since early August, with different companies implementing varying rates based on their circumstances [7]. - Affected e-commerce merchants typically have low shipping costs, such as those paying around 1 yuan or less per package, particularly in price-sensitive areas like Guangzhou, Shenzhen, and Dongguan [7][8]. Group 2: Impact on Industry and Workers - Theoretically, the rise in express delivery fees should lead to increased revenue for delivery points and higher pay for couriers; however, many industry insiders express skepticism about this outcome [4][12]. - There is a growing call among couriers for establishing a minimum pay rate rather than solely relying on price increases for e-commerce deliveries [4][8]. - The express delivery industry has faced significant pressure due to prolonged price wars, leading to a decline in income for couriers and increased operational challenges for companies [8][11]. Group 3: Future Trends and Expectations - Experts predict that more regions will follow suit in adjusting e-commerce delivery prices, which may lead to improved short-term performance for express delivery companies [12]. - The long-term outlook suggests that direct delivery models will have advantages due to their stable pricing systems and enhanced service capabilities [12][13]. - The industry is expected to undergo consolidation and restructuring, with a focus on reducing excess capacity and improving profitability for delivery points and franchisees [12][13].

Core Viewpoint - Recent reports indicate that express delivery companies in Guangdong, Zhejiang, and other regions have raised shipping fees for e-commerce clients, with increases ranging from 0.3 to 0.7 yuan per order, establishing a minimum price of 1.4 yuan per order [2][3][4]. Group 1: Price Increase Details - The price increase primarily targets e-commerce clients with lower shipping fees, while individual orders are not affected [2][3]. - The price adjustments began in early August, with variations depending on the specific express delivery company [3][4]. - Affected e-commerce merchants typically have shipping costs around 1 yuan or lower, particularly in regions like Guangzhou, Shenzhen, Dongguan, and others, which are considered price-sensitive areas [2][3]. Group 2: Industry Reactions and Implications - Industry experts express skepticism about whether the increase in shipping fees will lead to a corresponding rise in net income and delivery personnel compensation [4][6]. - Many frontline delivery workers emphasize the urgency of establishing a minimum delivery fee rather than relying solely on price increases for e-commerce deliveries [4][6]. - The recent price adjustments are seen as a response to the ongoing "involution" in the industry, where intense price competition has pressured profit margins [4][6]. Group 3: Future Industry Trends - Experts predict that more regions will follow suit in adjusting e-commerce delivery prices, which could lead to improved short-term performance for express delivery companies [6]. - In the long term, a shift towards a direct delivery model is anticipated to provide competitive advantages, as these companies maintain stable pricing structures and enhanced service capabilities [6]. - The express delivery industry may experience mergers and acquisitions, leading to increased market concentration as companies seek to navigate the challenges posed by overcapacity and competitive pressures [5][6].

Investment Rating - The investment rating for ZTO Express (2057.HK) is "Buy" [1] Core Views - The report highlights a significant decrease in unit costs and a downward adjustment in volume growth guidance due to changes in the economic and competitive landscape [5][6] - The company achieved a revenue of 22.723 billion yuan in H1 2025, representing a year-on-year increase of 9.8%, while the adjusted net profit was 4.312 billion yuan, down 14.3% year-on-year [2][3] Summary by Sections Operating Performance - In Q2 2025, the company handled 9.850 billion parcels, a year-on-year increase of 16.5%, maintaining a market share of approximately 19.5%, which is the highest in the industry [3] - The average revenue per parcel in Q2 2025 was 1.12 yuan, down 4.6% year-on-year, influenced by intensified industry competition and changes in cargo structure [3] - The unit cost for express delivery in Q2 2025 was approximately 0.58 yuan, a decrease of 11.0% year-on-year, with line haul costs down 15.0% and sorting costs down 5.1% [4] Volume Growth Guidance - The company has adjusted its full-year volume growth target for 2025 to 14%-18%, down from the previous 20%-24% due to the current economic and competitive environment [5] Industry Outlook - The report suggests that the express delivery industry still has growth potential, particularly with the rise of e-commerce and live-streaming sales, despite the downward trend in individual parcel values [6] - The report emphasizes the importance of monitoring the "anti-involution" policies and changes in the competitive landscape within the express delivery sector [6] Profit Forecast and Valuation - The adjusted net profit forecast for ZTO Express from 2025 to 2027 is 9.297 billion yuan, 10.881 billion yuan, and 12.782 billion yuan, with a projected year-on-year growth of -7.77%, +17.04%, and +17.48% respectively [7] - The report maintains a "Buy" rating based on the company's leading unit profitability and cash flow, alongside its scale and management advantages [8]

Industry Overview - In July 2025, the express delivery industry in China reported a business revenue of 120.64 billion yuan and a business volume of 16.40 billion pieces, representing year-on-year growth of 8.9% and 15.1% respectively [1] - From January to July 2025, the cumulative express delivery business revenue reached 839.42 billion yuan, with a year-on-year increase of 9.9%, while the cumulative business volume was 112.05 billion pieces, growing by 18.7% year-on-year [1] Company Performance in July 2025 - SF Express led the industry with a business revenue of 18.657 billion yuan and a volume of 1.377 billion pieces, achieving a revenue growth of 15.0% and a volume growth of 33.7% year-on-year [2] - Other companies reported the following revenues and volume: Shentong (4.287 billion yuan, +10.0%, 2.181 billion pieces, +11.9%), Yunda (4.120 billion yuan, +3.8%, 2.162 billion pieces, +7.6%), and YTO (5.371 billion yuan, +12.1%, 2.583 billion pieces, +20.8%) [2] - The market shares for these companies were as follows: SF Express (8.4%), Shentong (13.3%), Yunda (13.2%), and YTO (15.8%) [2] Company Performance from January to July 2025 - For the first seven months of 2025, SF Express reported a business revenue of 127.812 billion yuan (+10.9%) and a volume of 9.190 billion pieces (+26.9%) [3] - Other companies' revenues and volumes were: Shentong (28.980 billion yuan, +14.8%, 14.528 billion pieces, +19.3%), Yunda (28.851 billion yuan, +7.1%, 14.888 billion pieces, +15.1%), and YTO (37.943 billion yuan, +13.9%, 17.446 billion pieces, +21.6%) [3] - The market shares for these companies were: SF Express (8.2%), Shentong (13.0%), Yunda (13.3%), and YTO (15.6%) [3] Pricing and Competition Trends - The trend towards lighter and smaller packages, along with intensified price competition, has impacted the industry’s single-ticket revenue [4] - A recent meeting by the postal bureau emphasized the need to combat excessive competition, suggesting a shift towards more orderly competition in the express delivery sector [4] - As price increases are gradually implemented, the profitability of express delivery companies is expected to improve, reducing the likelihood of a return to the severe price wars seen in 2020 [4] Investment Outlook - The express delivery sector is currently viewed as undervalued, with continued growth in the e-commerce market and new demand from lower-tier markets and reverse logistics [4] - Companies such as ZTO Express, YTO Express, Yunda, Shentong, and Jitu Express are recommended for attention due to their potential in the growing market [4] - With improving cyclical expectations, there are opportunities for demand recovery in the mid-to-high-end express market, making SF Express a recommended focus for investment [4]