EB SECURITIES: Demand in the express delivery industry is gradually strengthening, and prices continue to improve.

EB SECURITIES published a research report stating that the efforts and sustainability of "de-involution" in the express delivery industry in 2026 are expected to exceed expectations, effectively easing competitive pressures within the industry and promoting a gradual rebound in price levels, with profitability expected to continue recovering. In a context of high operational costs in e-commerce and a warm winter contributing to a decline in industry growth rates, the report remains optimistic about the sustained optimization of business structures, the establishment of differentiated competitive barriers, and the rapid growth of overseas operations among leading express delivery companies. Key points from EB SECURITIES are as follows: In July, the industry saw a stable year-on-year increase in package volume, with significant growth in e-commerce express delivery. 1) Overall industry: In July 2026, national express delivery companies handled 17.08 billion packages, a year-on-year increase of 4.1%; from January to July 2026, the total package volume reached 117.47 billion, a year-on-year growth of 4.8%. The firm believes that online e-commerce consumption remains active, bolstering the growth base, coupled with factors such as the "national subsidy" policy driving steady consumption in the market and the continued expansion of lower-tier markets, which has resulted in stable upward growth in express delivery package volumes. 2) E-commerce express delivery: There were no significant changes in package volume growth rates for various companies compared to June, with YTO increasing from +8.60% in June to +12.08%, Yunda from -0.05% to +0.46%, and Shentong from +18.59% to +19.35%. 3) Direct-operated express delivery: SF Express saw its year-on-year growth rate recover from -4.86% to -3.78%. Industry unit prices have been steadily increasing, and the "de-involution" efforts and sustainability are exceeding expectations. 1) Overall industry: In July 2026, the express delivery industry experienced a year-on-year revenue increase of 8.1%, with a year-on-year rise in average revenue per package of 3.76%. The firm believes there are two driving factors for the continued positive growth in prices: first, the de-involution effect in the industry has strong sustainability; second, last years intense price competition had already compressed prices to a relatively low level, laying the foundation for ongoing positive growth in industry unit prices this year. 2) E-commerce express delivery: In July 2026, YTO, Yunda, and Shentong saw respective year-on-year average revenue per package changes of -0.96%, +12.04%, and +4.57%, while from January to July, the changes were -1.12%, +4.27%, and +3.29%. 3) Direct-operated express delivery: SF Express reported a year-on-year increase in average revenue per package of 6.64% in July and 3.24% from January to July. The structure of SF's package volume continues to improve, with unit prices turning positive year-on-year, and the effects of the "gain plan" gradually becoming evident. The concentration level of the industry is slightly easing, with the market share of leading companies remaining relatively stable in Q2 2026. From early 2022 to the end of 2024, due to relatively moderate price competition under policy regulations, the concentration of market share among leading companies has been slow. 1) Overall industry: From January to July 2026, the CR8 for the express delivery industry was 87.0, a year-on-year increase of 0.1. Since January 2025, the CR8 for the express delivery industry has maintained a positive growth trend year-on-year, reflecting the continuous increase in market share for leading companies. 2) E-commerce express delivery: The market shares of YTO, Yunda, and Shentong in July 2026 (calculated by package volume, the same below) were 17.0%, 12.7%, and 15.2% respectively, with changes of +0.66 percentage points, +0.31 percentage points, and +0.45 percentage points compared to June 2026. The market shares of leading express delivery companies in July 2026 remained relatively stable. Shentong merged with Dan Niao Logistics from November to December 2025, with Dan Niao being a leading provider of quality express delivery and reverse logistics services in China, which has directly expanded Shentong's business footprint. 3) Direct-operated express delivery: SF Express achieved a market share of 7.76% in July 2026, with a change of -0.17 percentage points. Risk analysis: Economic fluctuations, changes in industry policies, irrational competition, fluctuations in oil prices, etc.