CMSC: October Express Delivery Volume Growth Slows While Unit Prices Continue Yearly Recovery

Stock News12-08

CMSC released a research report stating that current valuations appear attractive relative to projected 2026 earnings, highlighting opportunities for valuation recovery driven by earnings growth.

From January to October 2025, express delivery volume grew 17.2% year-on-year (YoY), with October posting a 7.9% YoY increase. High-frequency data suggests a slight rebound in November's growth rate.

The "anti-involution" policy has spurred price, profitability, and valuation recovery: - Since July, postal authorities have held multiple meetings addressing industry competition. - After August, most regions implemented initial price hikes of RMB 0.2–0.4 per parcel, followed by secondary increases of RMB 0.1–0.2 in Guangdong and other areas in October. - Peak season price adjustments are largely complete, likely driving significant Q4 profit growth YoY.

For full-year 2026, earnings growth trends remain clear, with current valuations offering favorable risk-reward ratios. Investors are advised to monitor valuation recovery opportunities tied to 2026 performance.

**Key Industry Data**: 1. **Volume Growth Slowdown**: October express delivery volume reached 17.6 billion parcels (+7.9% YoY), decelerating by 4.9 percentage points (pct) from September. 2. **Unit Price Recovery**: Average revenue per parcel was RMB 7.48 (-3.0% YoY), narrowing the decline by 1.9 pct MoM but down 0.9% sequentially. 3. **Revenue**: Industry-wide revenue hit RMB 131.67 billion (+4.7% YoY), slowing by 2.5 pct from September.

**Consumption Trends**: - January–October retail sales totaled RMB 41.2 trillion (+4.3% YoY), with October at RMB 4.6 trillion (+2.9% YoY). - Online retail of physical goods rose 6.3% YoY to RMB 10.4 trillion, with October up 4.9% to RMB 1.25 trillion. - E-commerce penetration reached 25.2% (-0.7 pct YoY), though October saw a 26.9% rate (+0.5 pct YoY).

**Major Express Companies**: 1. **Volume Growth Divergence**: - SF Express (expanding aggressively): 1.52 billion parcels (+26.3% YoY). - YTO Express: 2.79 billion (+12.8%). - Yunda Holdings: 2.14 billion (-5.1%). - STO Express: 2.27 billion (+4.0%).

2. **Unit Prices**: - SF Express: RMB 13.18 (-10.0% YoY, -5.0% MoM), pressured by structural shifts. - YTO: RMB 2.23 (-3.5% YoY, +0.9% MoM). - Yunda: RMB 2.11 (+4.5% YoY, +4.5% MoM). - STO: RMB 2.18 (+7.4% YoY, +2.8% MoM).

3. **Revenue**: - SF Express: RMB 20.1 billion (+13.7% YoY). - YTO: RMB 6.2 billion (+9.0%). - Yunda: RMB 4.5 billion (-0.9%). - STO: RMB 5.0 billion (+11.8%).

4. **Market Share**: - SF Express: 8.7% (+1.3 pct YoY, -0.2 pct MoM). - YTO: 15.5% (+0.4 pct YoY, flat MoM). - Yunda: 13.3% (-0.5 pct YoY, +0.8 pct MoM). - STO: 13.3% (-0.1 pct YoY, +0.3 pct MoM).

**Risks**: Price wars, franchisee instability, macroeconomic slowdown, cost surges, and international trade policy shifts.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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