Yunda shares were downgraded: operating cash flow, profitability and leverage were weaker than expected

Small bonds are on the market

2024-05-13 17:09Posted in Beijing Finance and Economics Creators

The concentration of the express delivery industry has increased, and the market competition is fierce.

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demote

On May 10, Moody's transferred Yunda shares (002120. SZ) and its wholly-owned subsidiaries have downgraded the senior unsecured debt rating from Baa2 to Baa3, which are unconditionally and irrevocably guaranteed by Yunda Shares.

Moody's ratings

At the same time, Moody's revised the outlook to stable from negative.

Moody's said that under the fierce competition in the express delivery market and the slowdown in economic growth, Yunda's operating cash flow, profitability and leverage ratio are weaker than expected, and it is unlikely to improve to the level previously expected.

However, Yunda's prudent financial policy of reducing capital investment, excellent liquidity and diversified financing channels, as well as its continued market leadership, support the investment grade rating.

According to the statistics of "Small Bond Market", at present, Yunda shares only have the above-mentioned US dollar bond, which was issued in August 2020 with an existing scale of 500 million US dollars and will mature on August 19, 2025.

Existing US dollar bonds

In terms of domestic bonds, there are currently 4 bonds in Yunda shares, with an existing scale of 3.95 billion yuan, of which 1 billion yuan will mature within one year.

According to the latest rating report, the credit rating of Yunda shares and related debts is AA+, and the rating outlook is stable.

Future debt service cash flows

02

Financials

According to public information, Yunda Co., Ltd. was established in 1999 and is headquartered in Shanghai, and the company provides express delivery services and other value-added logistics services through a national network.

In 2017, Yunda shares were listed on the Shenzhen Stock Exchange.

Yunda Express official website

From the perspective of equity structure, the controlling shareholder of Yunda Co., Ltd. is Shanghai Luojiesi Investment Management Co., Ltd. (hereinafter referred to as "Shanghai Luojiesi"), with a shareholding ratio of 52.05%.

Nie Tengyun and Chen Liying are acting in concert and hold 70% and 30% of the shares of Shanghai Luojiesi respectively, and Nie Tengyun and other persons acting in concert hold 57.16% of Yunda shares.

Shareholding structure chart

According to the State Post Bureau, Yunda is the third largest express company in China, with a market share of 14% in 2023 by delivery volume.

Although the ranking of Yunda shares has dropped slightly from the previous second place, it is still an important industry leader, and there is not much difference between it and its competitors whose market share is slightly higher than that of Yunda shares that year.

In terms of performance, due to fierce market competition, Yunda's total revenue will decline by 5.2% to 45 billion yuan in 2023, and the company's 11% unit price decline will offset a 7% increase in the number of parcels.

In 2023, Yunda will achieve a net profit attributable to shareholders of listed companies of 1.625 billion yuan, a year-on-year increase of 9.58%; The net profit in the first quarter of 2024 was 412.5 million yuan, a year-on-year increase of 15.02%.

Net profit attributable to the parent company

It is worth noting that the operating profit margin of Yunda shares is at a low level, and this indicator is 4.7% in 2023.

As of the end of the first quarter of 2024, Yunda has total assets of 37.731 billion yuan, total liabilities of 18.007 billion yuan, net assets of 19.725 billion yuan, and the company's asset-liability ratio is 47.72%.

Measured by Moody's adjusted debt/EBITDA ratio, Yunda's leverage ratio in 2023 is 2.2x, unchanged from the previous year.

Due to the negative impact of competition on the company's profitability and cash flow, the leverage ratio of Yunda shares will rise to about 2.5 times in the next 12-18 months.

The analysis of the debt structure of "Small Debt Market" found that Yunda shares are mainly based on current liabilities, accounting for 54% of the total debt.

As of the same reporting period, Yunda shares have current liabilities of 9.634 billion yuan, mainly notes payable and accounts payable, and the company's short-term debts due within one year totaled 3.87 billion yuan.

Compared with the pressure of short-term debt, the liquidity of Yunda shares is better, and the monetary funds on its account are 4.768 billion yuan, which can cover short-term debt, and the company's short-term debt repayment pressure is not large.

In terms of financial flexibility, as of the end of September 2023, Yunda Bank had a total credit line of 13.05 billion yuan and an unused credit line of 10.096 billion yuan, which shows that it has more reserve funds.

Bank credit

In addition, Yunda shares also have non-current liabilities of 8.373 billion yuan, mainly bonds payable, and its long-term interest-bearing liabilities totaled 7.468 billion yuan.

On the whole, the total scale of rigid debt of Yunda shares is 11.338 billion yuan, mainly long-term interest-bearing debt, and the interest-bearing debt ratio is 63%.

From the perspective of financing channels, as an A-share listed company, Yunda shares have relatively smooth financing channels, in addition to equity financing, it also through leasing, accounts receivable and bonds and other ways of financing.

However, in terms of cash flow, in recent years, the net financing cash flow of Yunda shares has been a net outflow, and the indicators in the first quarter of 2022, 2023 and 2024 will be -713 million, -839 million and -307 million yuan respectively, and the company is facing certain refinancing pressure.

Financing cash flow

Overall, the market competition is fierce, the operating income of Yunda shares has declined, and the operating profit margin is at a low level; However, its liquidity is abundant, and there is little short-term debt service pressure.

It is necessary to pay attention to the express network franchise model, if the cooperation between the franchisee and Yunda shares changes abnormally, or the development of the company's local regional services will be adversely affected.

03

Private express delivery "Tonglu Department"

Tonglu, located in the mountainous area of northwest Zhejiang, is known as the most beautiful county in China. Tonglu is not only famous for its natural beauty, it is also the "hometown of China's private express delivery".

The mainland is the world's largest express delivery country, of which eighty percent of the express mail comes from the "three links and one reach" four express delivery companies: Shentong, Yuantong, Zhongtong, Yunda. The bosses of "three links and one reach" are all from Tonglu, Zhejiang.

In 1993, Nie Tengfei and Zhan Jisheng, from Tonglu County, founded Shentong and became the first private franchised express delivery company in China.

A year later, Nie Tengfei arranged for his wife, Chen Xiaoying's elder brother, Chen Dejun, to take over Zhan Jisheng's Shanghai business.

After that, Zhan Jisheng left Shentong and founded Tiantian Express.

Later, Tiantian Express was acquired by Shentong, and Chen Xiaoying's second husband Xi Chunyang served as the chairman, and Xi Chunyang was also one of the founders of Shentong.

Five years later, Nie Tengfei died in a car accident, and Shentong was taken over by Chen Xiaoying and Chen Dejun, and Nie Tengfei's younger brother Nie Tengyun left Shentong to found Yunda Express.

In 2000, Yu Weijiao founded YTO Express, and Yu Weijiao's wife Zhang Xiaojuan was Chen Dejun's junior high school classmate and also served as a financial worker for Shentong.

In 2012, Lai Haisong, who grew up with them, founded Zhongtong Express, and Lai's partner used to be a branch manager of Shentong.

Relationship diagram of the characters of the "Tonglu Gang". 

What was once a fellow countryman and a business partner is now a competitor.

Since 2007, the e-commerce industry has shown explosive growth, and private express delivery companies based on the "Tonglu system" have begun to undertake the express business of Taobao and other e-commerce platforms on a large scale.

With the rapid development of e-commerce, the demand of the express delivery market has grown exponentially, and various express companies have begun to plan to go public on the basis of continuous development and growth.

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