Guotai Haitong released a research report stating that in November 2025, the industry-wide express delivery volume increased by 5% year-on-year, continuing to maintain single-digit growth. Under the influence of anti-involution measures, the concentration of industry market share has slowed, with the net profit margins of ZTO Express, YTO Express, Yunda, and STO Express in Q3 2025 changing by -0.9, +0.07, -1.5, and +0.5 percentage points year-on-year, and by +4.8, +0.5, -0.07, and +0.6 percentage points quarter-on-quarter, respectively. Leading companies have generally achieved a recovery in profitability, which is expected to continue into the fourth quarter. Given the positive results achieved in this round of anti-involution and the positive feedback effect following the profit recovery of express delivery companies, it is anticipated that anti-involution policies will likely persist, ensuring healthy industry competition and continued profitability recovery on the basis of steady volume growth. The main views of Guotai Haitong are as follows: Express delivery volume growth slowed to single digits in Q4, and the peak of the Double Eleven shopping festival continued to flatten. In November 2025, the industry-wide express delivery volume increased by 5% year-on-year, continuing its single-digit growth trend. Over the past two years, lightweight and small parcels have been a key driver maintaining relatively rapid volume growth; since July 2025, effective anti-involution measures in the express delivery sector have successfully driven an industry-wide price recovery for e-commerce parcels, which may have impacted the growth trend of lightweight parcels and enhanced the quality of delivery demand. During the Double Eleven e-commerce promotion period, parcel volume increased by 9% year-on-year, slowing from the 21% daily average growth rate during the 2024 promotion, potentially due to the high base effect created by the significant extension of the 2024 promotion period and the further advancement of the 2025 promotion leading to a forward shift in volume. The average daily parcel volume during the promotion was 1.18 times the usual daily volume, and the single-day peak volume increased by 6.6% year-on-year, both narrowing for the third consecutive year, reflecting the diminishing marginal effect of promotions on stimulating consumption. This is likely due to the continued dispersion of consumption through daily promotions and live-streaming sales, as well as appliance replacement policies over the past year dispersing large-item appliance purchases that were traditionally concentrated during major promotions, also resulting in smaller express delivery price increases compared to previous years. Anti-involution measures have been implemented effectively with visible results; market share concentration has slowed, and profitability has begun to recover. Anti-involution has effectively increased revenue per parcel: by November, the revenue per parcel for YTO Express, Yunda, and STO Express had cumulatively increased by RMB 0.16, RMB 0.25, and RMB 0.44 respectively compared to July. Under anti-involution, the concentration of industry market share has slowed: the industry's CR8 was 86.9 in November, unchanged from September. In Q3 2025, the market shares of ZTO Express, YTO Express, Yunda, STO Express, and J&T Express were 19.4%, 15.6%, 13.0%, 13.2%, and 11.3% respectively, changing by -0.1, -0.4, -0.2, +0.2, and +0.2 percentage points quarter-on-quarter. YTO Express's market share has seen a slight recovery since Q4 2025, reflecting the company's faster volume recovery and growth compared to the industry, driven by its AI-enabled end-to-end solutions and infrastructure upgrades. STO Express, through its acquisition of Daniao Logistics, has risen to become the third-largest player by market share and continued its upward trend in November. Anti-involution has driven profitability recovery: the net profit margins of ZTO Express, YTO Express, Yunda, and STO Express in Q3 2025 changed by -0.9, +0.07, -1.5, and +0.5 percentage points year-on-year, and by +4.8, +0.5, -0.07, and +0.6 percentage points quarter-on-quarter, respectively. Leading companies have generally achieved a recovery in profitability, which is expected to continue into Q4; the sustainability of future profitability recovery will depend on the persistence of anti-involution policies in the express delivery industry. The anti-involution measures in the express delivery sector have yielded positive results; it is recommended to monitor regulatory intensity and trends in corporate competitive strategies. The express delivery industry previously implemented anti-involution measures in 2021, leading to a dual recovery in both performance and valuation for e-commerce express delivery, driven by the State Post Bureau's efforts to ensure network stability, the firm commitment of leading companies to profit recovery goals, and policies safeguarding couriers' rights. This round of anti-involution was initiated by the State Post Bureau's clear stance against "involution-style" competition, with local post bureaus effectively promoting supervision through methods like "price locking" and "market share locking." Core production areas successfully implemented price increases first, which then gradually spread to other key regions. Guotai Haitong believes that, considering the positive results of this round of anti-involution and the positive feedback effect following the profit recovery of express delivery companies, anti-involution policies are expected to continue, ensuring healthy industry competition and sustained profitability recovery alongside steady volume growth. It is recommended to closely monitor the intensity of anti-involution regulation and trends in corporate competitive strategies going forward. The investment recommendation maintains an Overweight rating on the express delivery sector. Anti-involution is driving profit recovery for e-commerce express delivery; recommended stocks include leading company ZTO Express and J&T Express, which is seeing domestic profit improvement and high overseas volume growth. SF Holding's activation of operational mechanisms has driven its volume growth to consistently outperform peers; short-term earnings volatility is primarily due to the company's proactive market expansion strategy and necessary long-term strategic investments, with effects expected to materialize as the company strengthens cost control. It is suggested to watch for timing opportunities to build positions in the leading time-definite express delivery company at its bottom. Maintain Overweight ratings on ZTO Express-W (02057), J&T EXPRESS-W (01519), and SF HOLDING (002352.SZ, 06936). Risks include economic fluctuations, changes in industry policy, irrational competition, and oil price volatility.
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