On April 30, Shentong Express released its 2021 annual report. Judging from the annual reports of five express delivery companies such as SF, Shentong, Zhongtong, Yuantong and Yunda, 2021 is a turning point in the express delivery industry, on the one hand, the low-price competition in the industry has entered the end, and the single ticket income has gradually increased. On the other hand, the industry investment heat has heated up, and the merger trend has intensified.
The low-price competition is over
Judging from the annual report, the net profits of Shentong and SF have declined.
Shentong's operating income in 2021 was 25.25 billion yuan, an increase of 17.1% year-on-year. At the same time, the net loss attributable to the shareholders of the listed company reached 910 million yuan, and the net profit in the same period of 2020 reached 36.32 million yuan.
SF's 2021 annual report shows that the annual revenue reached 207.19 billion yuan, an increase of 34.55% year-on-year. Net profit attributable to shareholders of listed companies was 4.27 billion yuan, down 41.73% year-on-year.
As for the cause of the loss, Shentong said that it was related to price competition. Shentong said in the financial report that in the first three quarters of 2021, the national express delivery single express revenue was 9.68 yuan, down 10.9% year-on-year, 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, Shentong appropriately adjusted the support of the market policy during this period, resulting in a decline in the company's single-ticket express delivery revenue, so it had a certain impact on the annual performance. At the same time, in the first three quarters of 2021, due to the impact of site relocation, project completion delays and other factors, the overall single volume throughput scale was limited, resulting in higher operating costs and lower capacity utilization rates, 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 gradually increased, the fixed cost of a single ticket was gradually reduced, and the scale effect was reflected.
SF also said in the first quarter of 2021 financial report that the e-commerce market is still the main driving force for the growth of the express delivery industry, but the competition for e-commerce express is seriously homogenized, and price competition has become the main means for e-commerce express to expand its share. At the same time, as capital helps new players enter the e-commerce express delivery market, the low-price strategy has become the main means for new players to quickly seize the market, impacting the original competitive pattern of the e-commerce express industry, and the price war has become more and more intense. As a result, the price of a single ticket in the overall express delivery industry has continued to decline in recent years, and the average unit price of express delivery in the industry has rapidly declined from 24.60 yuan / piece in 2010 to 10.55 yuan / piece in 2020.
The revenue and profit of the three express delivery companies of Yunda, Zhongtong and Yuantong have achieved growth. Yunda annual report shows that the company's operating income in 2021 was 41.729 billion yuan, an increase of 24.56% year-on-year, and the net profit attributable to shareholders of listed companies was 1.477 billion yuan, an increase of 5.15% year-on-year. ZTO's operating income in 2021 was 30.41 billion yuan, an increase of 20.6% year-on-year. Net profit for the full year was RMB4.7 billion, up 8.7% year-on-year. In 2021, the operating income of YTO was 45.15 billion yuan, an increase of 29.36% year-on-year. Net profit attributable to shareholders of listed companies was RMB2.1 billion, up 19.06% year-on-year.
The three companies also fell into the quagmire of the price war in 2021, but got rid of the impact of the price war by improving efficiency.
Yan Huiping, chief financial officer of ZTO Express Group, previously said: "The impact of competition-led price declines is weakening, with single ticket prices falling by 1.3% in the fourth quarter, driving the price of core express delivery businesses to fall by 5.7%, or 7 cents, of which 3 points are due to the decline in the average weight of packages." In the second half of 2021, the company took a number of measures and has already seen initial results in profitability. ”
In December last year, regulators began to pay attention to the issue of low-cost dumping of express delivery. From the feedback of merchants, the recent express delivery prices have gradually risen, and the era of low-price competition has passed.
Investment restructuring is heating up
In addition to low-price competition, another trend in the express delivery industry in 2021 is mergers and acquisitions.
In 2021, there were many mergers and reorganizations in the express delivery industry. In December 2021, Best Express announced the sale of its express delivery business in China to Jitu for a purchase price of approximately RMB6.8 billion under a definitive agreement signed on October 29. In addition, SF completed its acquisition of a 51.5% stake in Kerry Logistics on 28 September 2021, resulting in a rapid increase in its supply chain and international revenue. On February 25 this year, JD.com announced the completion of its stake in Dada, and after the completion of the transaction, JD.com will hold about 52% of Dada's shares. On March 11 this year, JD.com announced the acquisition of a 66.5% stake held by Debon Holdings.
In this regard, Wei Jianhui, an analyst in the brand retail industry of Analysys, told First Finance that the integration and mergers and acquisitions between industries are accelerating, and all parties are enhancing their competitiveness through deep integration and complementary advantages. In addition, Jingdong Logistics, Aneng Logistics, Manbang Group, SF Real Estate Trust, SF Tongcheng, etc. have been listed and listed, seeking rapid development with the help of the capital market. Although the concentration of the mainland express delivery industry is high, the service quality and differentiation of the head enterprises need to be further strengthened, and the market pattern may be optimized. The dispute between express delivery companies has gradually shifted to the battle of integrated services, and the market concentration in the segments of LTL express, cold chain, pharmaceutical logistics, cross-border logistics and other segments is low, there are many participants, there is a huge room for integration, and the follow-up mergers and acquisitions are expected to accelerate.
The above-mentioned investment restructuring and other means mean that the express delivery industry will usher in the battle of energy efficiency. A number of express delivery companies said in their earnings 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, but also because it has enhanced the customer expansion and service capabilities of franchised outlets for competition, and appropriately adjusted the support of market policies compared with the same period last year. At the same time, in order to improve the production capacity of the whole network, the intensity of capital expenditure has been increased.
Wei Jianhui believes that in 2021, all express deliveries are strengthening their investment in logistics industrial parks, and public and private REITs related to logistics industrial parks have successively landed on the capital market, accelerating the capital securitization of industrial parks and effectively reducing the overall capital operating costs of express delivery companies. From the perspective of the entire express delivery industry operation chain, the production capacity capital expenditure of the transshipment center has been basically completed, and the intensity of follow-up investment will gradually weaken. The investment of express delivery enterprises has gradually shifted to logistics industrial parks and new business areas. The core of the logistics industrial park lies in strong operation, and there is still a lot of room for growth for express delivery companies. Increasing investment in industrial parks can not only improve their own warehousing and operation capabilities, but also further obtain new business increments, such as community group buying, and the demand for warehousing and the delivery mode of logistics need to be further reorganized and optimized. In addition, the investment in logistics industrial parks is expected to accelerate the integration and development of the manufacturing industry and help the transformation and upgrading of the manufacturing industry.
For the industry investment heat in 2022, the above analysts said that the investment heat of the express delivery industry will be further enhanced in 2022, and the restructuring and mergers and acquisitions between listed companies may be accelerated. There are two main reasons: First, the support of the national policy level, especially the unification of the large market, is clearly pointed out that third-party logistics enterprises should be vigorously promoted to strengthen the digital development of logistics enterprises. Second, the development of the entire express delivery industry has gradually entered a mature period, and restructuring and mergers and acquisitions have become the main way for the market to clear at this stage. The current epidemic has a greater impact on the logistics industry, and the prevention and control of the epidemic has led to logistics ruptures, 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 the logistics industry in the mainland are small and medium-sized third parties, the anti-risk is weak, even at this stage the country is making every effort to dredge the logistics supply chain, but it is possible that some small and medium-sized logistics enterprises have reached the edge of life and death, at this time the possibility of mergers and acquisitions of head enterprises will further increase, and the market pattern will be further optimized.