In the first three quarters, the net profit of the five major express delivery companies fell together, and the impact of the price war was still there, where was the inflection point

As the express delivery business enters the double 11 peak season, several major domestic A-share listed express delivery companies have released third-quarter financial reports.

Nandu reporter combed and found that in the first three quarters of this year, the profit level of several major express delivery companies fell generally: among them, Shentong had the largest year-on-year decline, reaching 4671.20%; the two major direct system express delivery companies SF and Debon fell by 67.89% and 90.60% respectively. Under the background of fierce market competition, manpower, operation management, capital expenditure increase, and low capacity utilization rate are the main factors in these enterprises' general "increase in revenue and do not increase profits".

Express delivery company performance in the first three quarters, market share to Q3 single quarter Data source: financial reports

According to the statistics of the State Post Bureau, in the first three quarters, the volume of express delivery business and business revenue increased by 36.7% and 21.8% respectively year-on-year, an increase of 8.8 and 6.1 percentage points respectively over the same period last year. However, due to the external environment, the domestic epidemic situation and the increase in the base in the same period last year, the growth rate of express delivery business volume in the third quarter has declined, seasonal fluctuations have been "ironed", affected by the rapid development of live e-commerce, online consumer demand diversion, e-commerce platform holiday promotion effect has weakened, and the monthly distribution of pieces is more balanced.

Shentong Express explained that due to the changes in the entire express delivery market in the first three quarters of this year and the company's related investment and expenditure, the company's performance was under pressure, and the specific impact reasons included that in order to maintain the healthy development of the express delivery network, the support for franchise outlets was adjusted to participate in competition; the capital expenditure investment was increased, but the business scale was less than expected, resulting in the company's low capacity utilization rate; appropriately increased financing efforts, adding some bank borrowings, resulting in an increase in financial expenses.

It is worth noting that during the reporting period, Shentong's financial expenses, non-operating expenses, cash paid for investments and other items have doubled year-on-year, of which financial expenses increased by 572.45%, "mainly due to the increase in financial expenses caused by the increase in bank loans and the introduction of the new leasing standard", and the increase in non-operating expenses was 127.85%, "mainly due to the increase in operating fines and litigation expenses in the current period".

SF's profitability, by the increase in resource input, low capacity utilization, the Spring Festival staff subsidies increased and other factors, which is the most obvious performance in the first quarter of this year, the following two quarters, SF through various cost reduction and efficiency measures, gradually achieved a turnaround from a month to a profit, the financial report shows that its net profit in the second and third quarters after deducting non-recurring gains and losses was 657 million yuan and 810 million yuan, respectively.

In the third quarter of this year, Debon's net profit attributable to shareholders of listed companies was 0.12 billion yuan, down 91.38% from the same period last year, and the financial report explained that it was mainly affected by the macro environment and market competition, and the revenue growth rate slowed down; at the same time, the company improved product competitiveness by increasing capital investment, improving employee salaries, increasing personnel investment in the early stage of the peak season, etc., and the cost increased year-on-year.

At the same time, the preferential relief policy arising from the epidemic in the same period last year was cancelled this year, which has also become a major factor affecting performance. For example, YTO mentioned in the financial report that the decline in net profit, in addition to being affected by the changing pattern of industry competition and market development trends, is also due to the "superimposed on the cancellation of various preferential policies issued by the state during the new crown pneumonia epidemic and the recovery of refined oil prices, the decline in the revenue per ticket of the company's express products is higher than the decline in the cost of a single ticket, and the gross profit margin of express products has declined." ”

However, from the data of recent months, the "price war" has entered a slowing stage, and in the second half of the year, the single ticket prices of Shentong, Yunda and Yuantong have all shown positive growth in a single month. The State Post Bureau pointed out in the circular on the economic operation of the postal industry in the first three quarters of 2021 that since the third quarter, due to factors such as the rise in terminal dispatch fees and rising costs, the unit price of express delivery has increased month-on-month, and Zhejiang, Guangdong, Hebei, Fujian and Henan have all risen, of which the price of express delivery in Zhejiang has risen for three consecutive months.

CITIC Securities research report analysis said that the policy-driven e-commerce express price war inflection point is more certain, express delivery leader to abandon the practice of short-term market share growth with profits, and strive for effective express delivery increments, since April, the decline in single ticket revenue has narrowed month by month, the future service experience or will become the most important means of competition for express delivery companies, it is expected that the dispatch of single ticket upgrades will not be the end of this round of regulatory policy upgrades, leading express network infrastructure expansion to improve the service experience, to achieve the best cost to lay the foundation, Competitive advantage continues to expand and build a moat.

Written by: Nandu reporter Fu Xiaoling