Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

How Chinese Authorities Measure the Development of the Express Sector, & Why It Matters to Investors

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TRACKING TRAFFIC/Chinese Express: Volume Growth Moderates | Pricing Stays Depressed

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Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Equity Bottom-Up

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Although slightly weaker than the exceptional growth reported in September and October, Chinese express parcel volume growth remained strong in December, up 37% YoY. 
Unfortunately, pricing remained weak in December, with some companies reporting YoY unit  declines of more than 25%. Such sharp declines can quickly erode profit margins and cash flow. 
Our investment thesis for the sector remains intact: growing financial pressures within China's express sector will lead to necessary industry consolidation, probably in 2021.




Although slightly weaker than the exceptional growth reported in September and October, Chinese express parcel volume growth remained strong in December, up 37% YoY. 
Unfortunately, pricing remained weak in December, with some companies reporting YoY unit  declines of more than 25%. Such sharp declines can quickly erode profit margins and cash flow. 
Our investment thesis for the sector remains intact: growing financial pressures within China's express sector will lead to necessary industry consolidation, probably in 2021. 

TRACKING TRAFFIC/Chinese Express: Volumes UP | Pricing DOWN | Time for Consolidation

ZTO Express Cayman

TRACKING TRAFFIC/Chinese Express: Volumes UP | Pricing DOWN | Time for Consolidation