Citic Securities: Express industry explores the growth potential of niche markets, focus on reducing costs and improving efficiency at the end of the supply chain.

The report from CITIC Securities pointed out that by 2025, the top express delivery companies will pay more attention to increasing their market share. Taking into consideration multiple factors, the price competition in the industry from January to May strengthened compared to the previous year, but there is a bottoming out trend in the future. The report suggests focusing on leading companies in the segmented express delivery market, and paying attention to companies in the domestic and Southeast Asian markets with clear competitive barriers and strong profit growth certainty. In mid-June, the SF Express shareholders' meeting emphasized core directions such as "activating operational mechanisms" and "deepening solution transformation", with the expectation that organizational changes and the turning point of the operating cycle will drive the company's high volume growth, and maintain a certain level of profit margin improvement. Jitu has leveraged its cost advantage in the Southeast Asian market, and continues to realize "increased market share + optimized structure". Winning in the "last mile" delivery, and the application of intelligence and automation are driving a cost reduction revolution in the express delivery industry. Compared to traditional models, the self-purchase/lease unmanned vehicle model is expected to reduce costs by 0.1 to 0.2/0.04 yuan/ticket. If the intensity of price competition is maintained in the key competitive stages, the profitability, capital expenditure, and scale of differentiated products will accelerate the differentiation of network competitiveness. If the "anti-overwork" policy continues to take effect, the pressure on profits from franchisees to headquarters will be significantly relieved, and attention should be paid to the timing of the bottom layout of the leading company Tongda Express.