Shenwan Hongyuan Group: Strengthened enforcement of overloaded vehicles driving regulations to promote optimization of transportation structure, compliant transport capacity expected to benefit.

Shenwan Hongyuan Group released a research report stating that under the strict regulation policy and the "anti-inward rotation" trend of major OEMs, the compliance capacity of road transportation for automobile finished vehicles is expected to benefit, further promoting the transformation of the automobile finished vehicle logistics transportation structure towards "road-to-rail," "road-to-water," and multimodal transport. It recommended Beijing Changjiu Logistics Corp., which has sufficient compliance capacity for road transportation, with the potential for gradually releasing profits. It also suggested to pay attention to China Railway Special Cargo Logistics (001213.SZ), San Yang Ma (001317.SZ), and Bondex Supply Chain Management (603836.SH). The main points of Shenwan Hongyuan Group are as follows: Event: On July 24, 2025, the Ministry of Transport, Ministry of Public Security, and Ministry of Industry and Information Technology jointly formulated the "Special Governance Action Plan for Vehicle Transport Vehicles," with key tasks including: 1) Strictly improve the market access management for new vehicles; 2) Strengthen loading supervision from the source; 3) Enhance road enforcement inspections; 4) Strengthen penalties at the source. This action will last for 6 months and will be implemented in four stages, with a focus on regulating overloading transportation of vehicle transport vehicles from September to November. Amid the backdrop of the "anti-inward rotation" trend in the road transportation industry, the industry is transitioning from price competition to high-quality development. The strict regulation policy is accelerating industry consolidation, and compliant enterprises will gain a larger market share and pricing power. The report believes that compared to the regulation from 2016-2018, the enforcement strength of the current regulation is significantly enhanced, with stricter penalties for violators. It includes measures such as revoking road transport permits for vehicle transport vehicles that violate weight limits three times within a year, ordering the cessation of business for drivers who violate limits three times within a year, and ordering operational reforms for logistics companies with over 10% of vehicles in violation. It also sets clear requirements for compliant transport vehicles, such as restrictions on loading lengths, widths, and heights. The contraction of supply will impact the industry landscape, accelerating the elimination of small and medium-sized logistics companies. The clearance of non-compliant vehicles is expected to boost the compliance capacity and transport prices. During the traditional peak season of automobile production and sales from September to December, ensuring supply becomes the top priority for major OEMs, with relatively high acceptance of price increases for transportation. The enforcement of strict regulation policies in this period leads to a shortage of capacity, higher efficiency requirements, and reduced cost sensitivity. Previous regulation policies have significantly increased the transportation rates for Beijing Changjiu Logistics Corp., with a 27% increase in average transportation rates in 2018 compared to 2015. Despite the potential impact of transportation cost increases on end prices being limited, the transmission of these costs to consumers is expected to be smoother with the addition of anti-corruption policies. The regulation policy is expected to optimize the structure of automobile logistics transportation, improve logistics efficiency, and reduce social logistics costs. Currently, road transportation dominates the structure of finished vehicle transportation in China, with water and rail as supplementary modes. Under strict regulation, traditional road transportation costs are rising, pushing the industry towards a transition to "road-to-water" and "road-to-rail." The volumes of railway and waterway transportation are expected to increase, with multimodal transportation becoming a key solution to reduce costs and increase efficiency, accelerating the optimization and upgrade of the finished vehicle logistics model. Risk warnings include fluctuation risks in transportation rates, risks of lower-than-expected automobile production and sales volumes, and risks of increased industry competition.