Yunda Co., Ltd. (002120): New leader in express delivery achieves cost and quality advantages through refined control

Yunda Co., Ltd. (002120): New leader in express delivery achieves cost and quality advantages through refined control
Key points of investment The express industry has a good track, and the franchise system has evolved.Express delivery products are the most standardized service products in the field of logistics. They are easy to grow, and have large scale effects and network effects. They are easy to form a monopoly. Once a monopoly is formed, it is difficult to be subverted.  Among the top ten logistics companies in the world, express delivery companies have come out on top.At present, the affiliate system of the express delivery industry has been sublimated. Leading companies adopting the affiliate system not only need cost advantages, but also the restructuring rate is decreasing year by year.  How Yunda became the dark horse of the express delivery industry.1) The turning point starts in 2013: the business volume is only the fourth, and the net profit is only 1.400 million, net assets are only 500 million, and the rate of return is high.2) Reform: Do not diversify strategically and concentrate on e-commerce express delivery; major adjustments in the transfer center and transportation network have almost overturned reconstruction; reengineering of operating procedures (including layoffs), and informatization into each; reduction in size and joiningBusiness system; capital expansion centralized transfer center equipment and IT systems.3) Significant results: The second largest volume of business and continued to widen the gap; abundant cash flow and second largest net profit; the highest return rate, adjusted ROE reached 50%; leading service quality.  Three core judgements of industry competition.Judgment 1: The absolute value of the business volume is more important than the growth rate of the business volume, because the scale effect of the express delivery industry is strong, and the increase in volume and the decrease in cost form a resonance.Judgment 2: Heavy assets are not barriers. Among the total assets of Chinese courier companies, fixed assets and intangible assets account for a small proportion, and the network layout is gradually improving. Heavy assets are important but not necessary for network construction.Judgment 3: Management level is more important than technology level, because the business model of the express delivery industry is simple, traditional, and technology updates are slow. It is difficult to appear black technology that subverts the traditional model.  Leadership barriers are difficult to break.Barrier one: scale advantage, low unit profit and capital strength, scale determines cost, and price competition has upgraded from competition between franchisees in the past few years to headquarters competition. Therefore, capital strength is an important barrier. Current scale, cost and net assetsRankings basically match.Barrier two: the complexity of pipeline management.  The complexity of express interconnection management is very high. This cannot be established overnight. Due to the rapid growth of express delivery, the current routing network settings are still based on manual experience. According to our calculations, Yunda’s hub layout has the lowest redundancy.  Barrier three: Organizational management capabilities, founder spirit, internal governance structure and management efficiency of huge enterprises are the result of long-term accumulation. Yunda’s informatization, automation and intelligence have enhanced 杭州夜网论坛 the advantages of organizational management.  Deduction of industry space and competitive landscape.The potential of Chinese e-commerce in third- and fourth-tier cities and rural areas is still very large, and the per capita express delivery volume in the central and western regions is far behind that in the east.We assume that the compound growth rate of the volume of zero-commodity products in the seven years from 2018 to 2025 is 7%, and that of 30% of the zero-commodity products in 2025 are online purchases.年 年506亿件,平均每年增加约120亿件),折合未来7年网购的复合增速为14。7%.It is expected that the growth rate of leading companies is higher than the continuous increase of the industry’s share.  Investment Strategy.We believe that Yunda, which has jumped to the second largest scale in the industry in the past few years, has proved the effectiveness of its 深圳桑拿网 refined management and control, and currently has reached its leading advantages in terms of scale, cost and capital strength.Leading companies have not produced a service quality advantage beyond the positive cycle of “cost reduction-share increase-further stalls”, so that they have higher unit prices, profit margins, and speed of capital formation, and their advantages are difficult to catch up.In the cost structure of Tongda, the fixed cost ratio is low, so the downward price is limited by the downward unit cost and the profit margin of some enterprises. Since there is no downward space for the unit cost of express delivery, we predict that price competition will continue, but asThe competition structure has improved and slowed.The EPS is expected to be 1 in 2019-2021.31, 1.68, 2.18 yuan, corresponding to the closing price of PE on August 20 were 27.03, 21.16, 16.25 times, upgrade to “Buy” rating.  Risk reminder: e-commerce growth declines, capital expenditures, labor costs exceed expected growth, industry price war persistence exceeds expectations