CITIC Securities Construction: The structural opportunity of express delivery is still "reducing costs throughout the entire chain".

CITIC Securities Research Report pointed out that the market's expectation of anti-involution is gradually being realized, and the structural opportunities for express delivery still lie in "full-chain cost reduction". Regulatory authorities strongly promote price anti-involution, which may seem to delay the market consolidation in the short term. However, it actually highlights the investment theme of the value of end-of-chain company transformation that has not yet reached a consensus. In conclusion, cash flow not only determines the continuous survival of the headquarters of express delivery companies, but also determines the resilience when the entire franchise network encounters problems. As leading companies in the field of e-commerce express delivery, ZTO Express and YTO Express are currently in a period of profit release after passing the peak of production capacity. With good foresight in production capacity investment, when entering the second half of the fourth round of production capacity cycle, they have single ticket profitability and potential financing capabilities exceeding the market average level. They have sufficient self-generation and risk resistance capabilities, and the transformation of end-of-chain and the underlying digitalization will further enable them to lead in the future.