中國快遞業(yè)：是天黑了還是天快亮了

1、Global Research15 September 2020Initiation of CoverageEquitiesChina Express DeliveryTransportation ServicesChinaIs it just dark or getting close to dawn?Initiating coverage of Yunda, YTO and STOWe expand our coverage in the China express delivery sector with a cautiously positive view. While e-comme

2、rce continues to drive strong volume growth, the market is concerned about price competition that has been more intense than ever over the past few months. Against consensus, we think price pressure could ease from 2021 as some industry leaders may face profit pressure and capacity constraints. Amon

3、g the Tongda companies, we prefer ZTO and Yunda to YTO and STO as we believe market leaders could further expand their shares and strengthen their leading positions.Darkness before dawn: pressure on price may soon start to lessenThe decline in ASPs has been steeper than ever in the past few months d

4、ue to intensified competition among the top-tier companies. However, we think price pressures could begin to ease as soon as the peak season in late-2020 due to profit concerns and capacity constraints. We estimate that the top 5 players would need at least Rmb5bn CAPEX in 2020-2021 to support 20% v

5、olume CAGRS, higher than some of their cash reserves and thereby limiting their ability to gain further market share.ASPs could still trend down but support may come from unit-cost declines While price competition could abate as some top firms face increasing profit concerns and capacity constraints

6、, we expect ASPs to continue trending down in 2021E-23E, though the level of unit-cost decline is unlikely to exceed the point that leads to stable unit profit. The ASP decline could come to an end when: 1) market leader ZTO reaches the unit-cost floor, which we estimate to be 26% lower than in 2019

7、 and achievable by 2023, and 2) competitor firms narrow the cost difference with ZTO. However, we expect any price hike to come with a cost surge.Buy on ZTO, Yunda; Neutral on YTO; Sell on STO, SFWhile the intensified competition could pressure near-term earnings, we believe Yunda (initiate with Buy

8、) and ZTO could further expand their market-leading positions for longer-term profit. We initiate on YTO with a Neutral as we see no near-term catalyst to re-rate the stock from a premium valuation, and on STO with a Sell as we believe it may face profit pressure and capacity constraints, limiting i

9、ts ability to gain further market share We still like SFs long-term strategy of becoming a full logistics-solution provider but maintain a Sell rating as we expect limited earnings growth upside from its concessionary product, making its current stretched valuation unjustified, in our view.Figure 1:

10、 China express delivery companies under our coverageQian Yu Analyst S1460519060002 HYPERLINK mailto:qian.yu qian.yu+86-213-866 8684Eric Lin Analyst S1460519090001 HYPERLINK mailto:eric-p.lin eric-p.lin+86-21-3866 8865MarketOldNewPriceCurrentVolumePE (x)EPS GrowthCompanyTickerCapRatingRatingtargetPri

11、ceshare, 201920192020E2021E20192020E2021EZTO ExpressZTO.NRmb169bnBuyBuyUS$40US$31.7219.1%20352721%-6%31%Yunda Holding002120.SZRmb54bnNRBuyRmb25Rmb18.5315.8%26262112%-21%26%YTO Express600233.SSRmb47bnNRNeut ralRmb16.50Rmb14.7814.3%192423-2%-6%7%STO Express002468.SZRmb23bnNRSellRmb15Rmb15.1411.6%27332

12、5-26%-46%31%S.F. Holding002352.SZRmb348bnSellSellRmb68Rmb78.807.6%35493720%59%33%Note: Priced to close on 14 September 2020. Source: Company data, UBS-S estimates HYPERLINK / This report has been prepared by UBS Securities Co. Limited. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 29.

13、 UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider thisContentsOUR THESIS IN PICTURES 4PIVITOAL QUESTIONS 6

14、 HYPERLINK l _TOC_250003 Q: How low could the unit cost per parcel get? 6 HYPERLINK l _TOC_250002 Q: When might the price competition end? 11Q: Is Chinas express delivery industry likely to continue its consolidation? . 17 HYPERLINK l _TOC_250001 WHATS PRICED IN? 21 HYPERLINK l _TOC_250000 Backgroun

15、d of Chinas express delivery industry 23Qian Yu Analyst S1460519060002 HYPERLINK mailto:qian.yu qian.yu+86-213-866 8684Eric Lin Analyst S1460519090001 HYPERLINK mailto:eric-p.lin eric-p.lin+86-21-3866 8865China Express DeliveryUBS-S Research THESIS MAP a guide to our thinking and whats where in this

16、 reportOUR THESIS IN PICTURESMOST FAVOUREDLEAST FAVOUREDZTO Express, Yunda HoldingS.F. Holding, STO ExpressPIVOTAL QUESTIONSQ: How low could the unit cost per parcel get?We estimate the unit cost per parcel could go as low as Rmb0.75 excluding last-mile fee. This would be a 26% decline from ZTOs 201

17、9 level, and believe this could be achieved by 2023.moreQ: When might the price competition end?We think price competition could ease as early as late-2020 as some leading firms attempts to gain further market share are likely hampered by capacity constraints. However, ASPs could still trend down as

18、 we believe there is still room for unit costs to decline in 2021-23, while unit profit could remain largely stable.moreQ: Is Chinas express delivery industry likely to continue its consolidation?Yes. We expect further market consolidation but via competition rather than M&A between major express de

19、livery firms. However, longer-term we do not rule out the possibility of M&A.moreUBS-S VIEWOverall, we believe Chinese express delivery companies remain willing to compete on price in the near-term, but ASP pressure should decrease from end-2020 or 2021. For 2020, we forecast 27% YoY volume growth f

20、ollowed by an 18% volume CAGR in 2021E-24E.EVIDENCEThe decline in ASPs over the past few years was offset by declining unit costs, which in turn were driven by automation and economies of scale. Additionally, express delivery companies have investedCAPEX of Rmb1.30 per each additional parcel in 2019

21、, while the cash levels of some companies may be insufficient to support continuous high volume growth. UBS Evidence Labs geospatial study ( Access Dataset) shows significant overlap among logistics service coverage in Chinas express- delivery industry.WHATS PRICED IN?The A-share Tongda firms (Yunda

22、, YTO and STO) are trading at an average 12-month forward PE of 24x, close to -1SD below the two-year historical average, despite strong volume growth afterCOVID-19. We believe this is due to market concerns about the ongoing price competition that caused ASPs to drop and profit growth to lag volume

23、.moreSource: UBS-S estimatesChina Express DeliveryUBS-S ResearchOUR THESIS IN PICTURESreturn 35%30%25%20% 15%While growth has been slowing due to a higher base, we estimate parcel volume growth remains above 20% YoY in 2020-22, with e-commerce contribution over 80%2017201820192020E2021E2022E2023E202

24、4E10%Parcel volume growth YoYonline shopping GMV growth YoYDirect ModelSenderRecipientsPayment to P Network partFull delivery service feePayment to Express delivery company : Transit services fee+waybill fee+last-mile delivery fee*Payment to Delivery Network partner:Last-mile delivery fee *Network P

25、artner ModelZTO, Yunda, YTO, Best, STO Owning/operating key assets (e.g. sorting hubs, line-haul vehicles, technology systems)ickup ner:Delivery OutletRegional Sorting HubRegional Sorting HubPickup OutletSF, EMS, JD Logistics*Owning/operating the whole delivery processckup vice feePayment to Pi Full

26、 delivery serThe network-partner model focuses on the build-out and operations of the core assets, allowing faster expansion with lower CAPEX (click here for a detailed comparison of the direct model vs the network-partner model)80%75%70%65%60%55%The top-five firms in terms of volume (ZTO, Yunda, YT

27、O, STO, Best) have adopted the network-partner model and their combined market share increased to 76% in Q2201Q20172Q20173Q20174Q20171Q20182Q20183Q20184Q20181Q20192Q20193Q20194Q20191Q20202Q202050%Unit gross profit (Rmb)0.800.750.700.650.600.550.500.450.400.350.30201420152016201720182019ZTOYTOSTOYund

28、aThe top companies are now directly competing with each other, leading to declining unit profits as cost declines are insufficient to offset the drop in ASPsSources for exhibits above: State Post Bureau of China, Company data, UBS-S estimatesChina Express DeliveryUBS-S ResearchOUR THESIS IN PICTURES

29、return Rmb (m)18,00016,00014,00012,00010,0008,0006,0004,0002,000-ZTOYundaYTOSTOBestWe believe 2 out of the 5 leading companies in volume share could be experiencing capacity constraints as their cash reserves are insufficient to cover the required CAPEX to maintain a 20% volume CAGR, limiting their

30、ability to gain further market shareCapex needed in 2020Capex needed in 2021Net cash as of 2019Rmb/parcel2.352.151.951.751.551.351.150.950.75We estimate a unit-cost floor of Rmb0.75/parcel (excl. last-mile), a 26% decline from ZTOs level in 2019-5,00010,00015,00020,00025,00030,0002018-2020E ASP-18%

31、CAGR2020-2023E ASP-3% CAGRFlat going foward1.80ZTOYTOSTOYundaParcel/year(m)1.601.401.201.000.80As unit-cost approaches the floor and the gap between the market leader and trailing companies narrows, we expect the ASP decline to taper off0.60201820192020E2021E2022E2023E2024EZTOYundaYTOSTO 45403530The

32、 A-share Tongda companies are trading at -1SD25below the two-year historical average despite strong20volume growth post COVID-19, due to the marketsconcern about ongoing price competition1/1/20173/1/20175/1/20177/1/20179/1/201711/1/20171/1/20183/1/20185/1/20187/1/20189/1/201811/1/20181/1/20193/1/201

33、95/1/20197/1/20199/1/201911/1/20191/1/20203/1/20205/1/20207/1/20209/1/202015A-share Tongda-1 SDMean+1 SDSources for exhibits above: State Post Bureau of China, Company data, UBS-S estimatesChina Express DeliveryUBS-S ResearchPIVITOAL QUESTIONSreturn Q: How low could the unit cost per parcel get?UBS-

34、S VIEWWe estimate that the unit cost per parcel could reach a floor price of Rmb0.75, excluding last-mile fee. This would be 26% below ZTOs 2019 level, which we believe could be achieved by 2023.EVIDENCELine-haul transport cost: As of 2019, around 90% ZTOs trucks are self-owned and approximately 70%

35、 are high capacity 15-17 metres long (versus the industry norm of 9.6 metres), leading to lower-than-peer unit line-haul transport costs of Rmb0.62 per parcel.Sorting cost: Labour accounts for 70% of sorting hub costs, which could be reduced by enhancing automation levels. As of end-2019, ZTO has in

36、stalled 265 sets of automated sorting equipment, processing 70% of parcels and leading to a cost of Rmb0.34 per parcel.Waybill cost: With a digital waybill usage rate over 99%, waybill costs per parcel have dropped to below Rmb0.04.WHATS PRICED IN?The market expects unit costs to continue to decline

37、, but there is no quantified consensus.Chinas express delivery industry has experienced strong growth, supported by the expansion of e-commerce, where gross merchandise volume (GMV) growth is highly correlated with express parcel volume growth. However, revenue has not increased with volume as the d

38、omestic express delivery industry average parcel price (ASP) has declined in the past few years as companies compete on price.The competition has caused ASPs to decline over several years, which has been partially offset by a decline in unit cost.Figure 2: Express revenue per parcel, adjusted for la

39、st- mile delivery fees (Rmb)Rmb3.002.802.602.402.202.001.801.601.401.201.00201420152016201720182019ZTOYTOSTOYundaFigure 3: Express cost per parcel, adjusted for last-mile delivery fees (Rmb)Rmb2.302.101.901.701.501.301.100.900.700.50201420152016201720182019ZTOYTOSTOYundaSource: Company data, UBS-S e

40、stimatesSource: Company data, UBS-S estimatesA detailed look into unit costsAt the reported level, the Tongda firms revenues and costs per parcel differ significantly as they adopt different accounting policies. ZTO recognises revenue after deducting last-mile delivery fees and subsidies to its netw

41、ork partners. Yunda and STO recognise last-mile delivery fees in revenue and costs. YTO recognises both last-mile delivery fees and subsidies to network partners in revenue and costs.To compare like-for-like, we eliminate everything except core express revenue and costsie, from sorting, line-haul tr

42、ansportation and waybill fees. On a like-for-like basis, the Tongda companies 2019 adjusted costs of revenue fall within the range of Rmb0.96-1.09 per parcel.Figure 4: Reported unit revenue & cost breakdown (2019)Figure 5: Adjusted Unit cost comparison (2019)ZTOYundaYTOSTONetwork subsidiesOTransport

43、 &sorting costOOOOWaybill and other costOOOONetwork subsidiesORmb 1.60Last-mile delivery revenueOOO1.401.20Express revenueOOOO1.000.800.60Last-mile delivery costOOO0.400.20-ZTOYundaYTOSTOExpress revenueTransport+sorting costWaybill and other costSource: Company data, UBS-S estimatesSource: Company d

44、ata, UBS-S estimatesWhen comparing revenue and cost, like-for-like remains difficult given the varying degree of outsourcing, direct shipments and agreements with network partners; we think per parcel gross profit (PPGP) is what the Tongda firms and their shareholders care about. ZTO has the highest

45、 PPGP, a Rmb0.17 (around 50%) lead versus second-placed Yunda. In reality, we estimate all Tongda firms have similar ASP and the difference in PPGP is due to cost differences.Figure 6: Per parcel comparison after adjustment (2019)(Rmb/parcel)ZTOYundaYTOSTOExpress revenue1.511.451.431.38Transport cos

46、t0.620.730.69NASorting cost0.340.340.030.36NAWaybill cost0.030.030.04Cost of express revenue0.990.531.091.091.07Express gross profit0.360.350.31Source: Company data, UBS-S estimatesHow much further could the unit cost per parcel reduce?We estimate that the unit cost parcel could go as low as Rmb0.75

47、 per parcel, excluding the last-mile delivery fee. This is 26% below ZTOs 2019 level and consists of Rmb0.47 line-haul transportation cost, Rmb0.26 sorting hub cost and Rmb0.02 waybill cost.Line-haul transportation costsRmb 0.47/parcelAs of 2019, approximately 90% of ZTOs trucks are self-owned and a

48、round 70% are high capacity (15-17 metres long versus the industry norm of 9.6 metres), leading to a lower-than-peers unit line-haul transport cost of Rmb0.62/parcel.In the past few years, ZTO has been reducing the use of third-party trucks (900 in 2019) while retaining a constant number of smaller

49、trucks (1,800). We expect ZTO to maintain its smaller trucks for certain routes with smaller volumes and for flexibility, but continue to decrease the use of third-party transportation. Assuming all future purchased trucks are self-owned and high capacity, we estimate ZTOs self-owned ratio by 2023 c

50、ould reach 98%, with 90% that are high capacity (88% of total trucks are high capacity), to achieve a unit line-haul transportation cost of Rmb0.47/parcel.20182Q20182Q20192021EFigure 7: No. of line-haul trucksFigure 8: High-capacity truck ratio vs unit line-haul transport cost (Rmb/parcel)25,0000.90

51、0.8520,0000.800.75201620171Q2018 4Q201815,0000.701Q201910,0000.654Q20190.603Q201820193Q20195,0000.552020E0.50-20162017201820192020E 2021E 2022E2023E0.450.402022E2023ESmall turcks owned by ZTOSelf-owned high capacity trucksTruck owned by 3PL25%35%45%55%65%75%85%Source: Company data, UBS-S estimatesSo

52、urce: Company data, UBS-S estimatesSorting hub costsRmb0.26/parcelLabour accounts for 70% of sorting hub costs, which can be reduced by enhancing automation levels. In our view, this is consistent with ZTOs emphasis on automation and greater efficiency versus peers. As of end-2019, ZTO installed 265

53、 sets of automated sorting equipment that processed 70% of parcels. In 2019, ZTOs sorting hub cost was Rmb0.34 per parcel. Assuming it could achieve a 90% automation rate in 2022, we estimate the limit of sorting hub costs to be Rmb0.26.Figure 9: Automation rate vs unit sorting cost (Rmb/parcel)0.45

54、0.401Q20184Q20181Q20190.3520183Q2018 20194Q20190.300.252Q2018 3Q2019 2Q20192020E2021E2022E2023E0.2050%55%60%65%70%75%80%85%90%Source: Company data, UBS-S estimatesWaybill costsRmb 0.02/parcelExpress delivery companies have adopted digital waybills with the help of Cainiao, an Alibaba-owned logistics

55、 firm, which has not only reduced material costs but also significantly improved its working efficiency, lowered its error rate and enabled automated sorting.As of 2019, express delivery companies digital waybill usage reached over 99%, allowing very little room for improvement. We assume express de

56、livery companies waybill unit cost to be Rmb0.02/parcel.From an economies-of-scale perspectiveTo validate our estimates, we have tried to approach the unit-cost limit from a different perspectiveeconomies of scale. An increase in volume could allow express delivery companies to enhance their truck-l

57、oad factors and sorting- machine utilisation rates, which would result in lower unit costs. A simple simulation using Tongda companies data points over the past five years, we found that the unit cost is converging towards Rmb0.75/parcel as well.Figure 10: Tongda firms unit costs (line-haul transpor

58、t+sorting+waybill) vs volume (m parcels per year)2014-19Rmb/parcel2.352.151.951.751.551.351.150.950.75-5,00010,00015,00020,00025,00030,000ZTOYTOSTOYundaParcel/year(m)Source: Company data, UBS-S estimatesThe future of express deliveryAutonomous vehiclesPayments to drivers account for around 30% of li

59、ne-haul transportation fees, which could be potentially saved via autonomous vehicles. Based on our forecast of Rmb0.47/parcel (see previous section) as the limit for the line-haul transport unit cost in the near-term, it could further decline to Rmb0.35/parcel in the future.Fully automated sorting

60、hubsWhile ZTO has installed over 260 automated sorting machines and achieved an automation rate of more than 70%, currently the sorting hub line is still semi-auto and requires manpower. Currently, labour costs still account for around 70% of sorting hub costs. We expect machines to gradually replac