On April 30, Shentong Express released its 2021 annual report.
Judging from the annual reports of five express delivery companies including SF Express, Shentong Express, Zhongtong Express, Yuantong Express, and Yunda Express, 2021 will be a turning point for the express delivery industry.
On the other hand, the investment in the industry is heating up, and the trend of consolidation is intensifying.
Low-price competition ends
From the annual report, the net profit of Shentong and SF Express has declined.
Shentong's operating income in 2021 will be 25.25 billion yuan, a year-on-year increase of 17.1%.
At the same time, the net loss attributable to shareholders of listed companies reached 910 million yuan, and the net profit in the same period in 2020 reached 36.32 million yuan.
According to SF Express's 2021 annual report, its annual revenue reached 207.19 billion yuan, a year-on-year increase of 34.55%.
Net profit attributable to shareholders of listed companies was 4.27 billion yuan, down 41.73% year-on-year.
As for the reason for the loss, Shentong said it was related to price competition.
Shentong said in its financial report that in the first three quarters of 2021, the national express single-piece express revenue was 9.68 yuan, a year-on-year decrease of 10.9%, and the price competition was fierce.
In order to maintain the healthy development of the express delivery network and enhance the customer expansion and service capabilities of the franchised outlets, STO appropriately adjusted the support of market policies during this period, resulting in a decline in the company's single-ticket express delivery revenue, which had a certain impact on the annual performance.
At the same time, in the first three quarters of 2021, due to factors such as site relocation and project completion delays, the overall unit throughput was limited, resulting in high operating costs and low capacity utilization, which affected the company's performance to a certain extent.
In the fourth quarter, with the continuous growth of the company's business volume, the capacity utilization rate has gradually increased, and the fixed cost of a single ticket has gradually decreased, reflecting the scale effect.
SF Express also stated in its financial report for the first quarter of 2021 that the e-commerce market is still the main driving force for the growth of the express delivery industry, but the competition of e-commerce express delivery is serious, and price competition has become the main means for e-commerce express delivery to expand its share.
At the same time, as capital helps new players enter the e-commerce express market, low-price strategies have become the main means for new players to quickly seize the market, impacting the original competition pattern of the e-commerce express industry, and the price war has become more and more fierce.
As a result, the single ticket price of the overall express delivery industry has continued to decline in recent years, and the average unit price of the industry express has rapidly declined from 24.60 yuan/piece in 2010 to 10.55 yuan/piece in 2020.
The three express delivery companies Yunda, ZTO and YTO achieved growth in both revenue and profit.
Yunda's annual report shows that the company's operating income in 2021 will be 41.729 billion yuan, a year-on-year increase of 24.56%, and the net profit currently attributable to shareholders of the listed company is 1.477 billion yuan, a year-on-year increase of 5.15%.
The operating income of ZTO in 2021 will be 30.41 billion yuan, a year-on-year increase of 20.6%.
Net profit for the year was 4.7 billion yuan, a year-on-year increase of 8.7%.
In 2021, YTO's operating income will be 45.15 billion yuan, a year-on-year increase of 29.36%.
Net profit attributable to shareholders of listed companies was 2.1 billion yuan, a year-on-year increase of 19.06%.
The three companies mentioned above were also mired in a price war in 2021, but escaped the price war by improving efficiency.
Yan Huiping, chief financial officer of ZTO Express Group, previously said: "The impact of price declines caused by competition is weakening. In the fourth quarter, the price of a single ticket fell by 1.3%, driving the price of the core express delivery business for the whole year to drop by 5.7%, or 7 cents, of which 3 cents are Due to the decline in the average package weight. The company has taken many measures in the second half of 2021, which has already paid off in terms of profitability.”
In December last year, regulators began to pay attention to the issue of low-cost express dumping.
From the feedback from merchants, express delivery prices have gradually increased recently, and the era of low-price competition has passed.
Investment restructuring heats up
In addition to low-price competition, another trend in the express delivery industry in 2021 is mergers and reorganizations.
In 2021, there will be many mergers and reorganizations in the express delivery industry.
In December 2021, Best Express announced that it would sell its express delivery business in China to Jitu. According to the final agreement signed by the two parties on October 29, the purchase price was about 6.8 billion yuan.
In addition, SF Express completed the acquisition of a 51.5% stake in Kerry Logistics on September 28, 2021, resulting in a rapid increase in its supply chain and international business revenue.
On February 25 this year, JD.com announced the completion of the increase in its stake in Dada. After the transaction is completed, JD.com will hold about 52% of Dada’s shares.
On March 11 this year, JD.com announced the acquisition of 66.5% of the shares held by Debon Holdings.
In this regard, Wei Jianhui, an analyst in the brand retail industry of Analysys, told Yicai.com that the integration and mergers and acquisitions between industries are accelerating, and all parties have improved their competitiveness through deep integration and complementary advantages.
In addition, Jingdong Logistics, Aneng Logistics, Manbang Group, SF Express Realty Trust, and SF Express City have all listed on the market, seeking rapid development with the help of the capital market.
Although my country's express delivery industry is highly concentrated, the service quality and differentiation of leading companies need to be further strengthened, and the market structure may be optimized.
The competition among express delivery companies is gradually turning to the competition for comprehensive services. The market concentration of sub-sectors such as LTL express, cold chain, pharmaceutical logistics, and cross-border logistics is low, and there are many participants. There is huge room for integration, and subsequent mergers and acquisitions are expected to accelerate.
The above-mentioned investment restructuring and other means mean that the express delivery industry will usher in a battle for energy efficiency.
A number of express delivery companies stated in their financial reports that by increasing investment in technology and infrastructure, they will further improve energy efficiency and market share.
Shentong said that the company's performance in the first three quarters of 2021 is under pressure because it has enhanced the customer expansion and service capabilities of franchised outlets for competition, and has appropriately adjusted market policy support over the same period last year.
At the same time, in order to improve the production capacity of the whole network, the investment in capital expenditure has been increased.
Wei Jianhui believes that in 2021, various express delivery companies are strengthening their investment in logistics industrial parks, and public and private REITs related to logistics industrial parks have successively landed in the capital market, speeding up the capital securitization of industrial parks and effectively reducing the overall capital operation cost of express companies.
From the perspective of the entire express industry operation chain, the capacity capital expenditure of the transshipment center has been basically completed, and the follow-up investment will gradually weaken.
The investment of express delivery companies has gradually shifted to logistics industrial parks and the development of new business areas.
The core of the logistics industrial park lies in strong operations, and there is still a lot of room for growth for express delivery companies.
Increasing investment in industrial parks can not only improve its own warehousing operation capacity, but also further obtain new business increments, such as community group purchases, and the demand for warehousing and logistics delivery methods need to be further reorganized and optimized.
In addition, investing in logistics industrial parks is expected to accelerate the integrated development with the manufacturing industry and help the transformation and upgrading of the manufacturing industry.
Regarding the industry investment enthusiasm in 2022, the above-mentioned analysts said that the investment enthusiasm of the express delivery industry will further increase in 2022, and the restructuring and mergers and acquisitions among listed companies may accelerate.
There are two main reasons: First, the support at the national policy level, especially the unification of the large market, has clearly pointed out that it is necessary to vigorously develop third-party logistics enterprises and strengthen the digital development of logistics enterprises.
Second, the development of the entire express delivery industry has gradually entered a mature stage, and restructuring and mergers and acquisitions have become the main way to clear the market at this stage.
The current epidemic has a great impact on the logistics industry. The layers of prevention and control of the epidemic have led to the rupture of logistics, and the price under pressure in the market has risen sharply, which has played a serious negative role in the operation of the industry.
Most of the participants in my country's logistics industry are small and medium-sized third parties, which are weak against risks. Even at this stage, the country is making every effort to clear the logistics supply chain, but it is possible that some small and medium-sized logistics enterprises have reached the brink of life and death. At this time, the mergers and acquisitions of leading enterprises The possibility of further increase will be further increased, and the market structure will be further optimized.