Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

TRACKING TRAFFIC/Three Suggested Pair Trades in Travel, Express & Shipping

TRACKING TRAFFIC/Containers & Air Cargo: Volumes, Rates & Bunker All Firmer | Valuations Get Weird

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

Best Inc's Weak Q3 Results Spur 'Strategic Refocusing Plan', Retain BUY

TRACKING TRAFFIC/Chinese Express: Pricing Still Weak | STO Q3 Profit Warning | ZTO HK IPO Update

ZTO Q3 Results: As Margins Implode, It's Coming 'Back To the Pack', Retain SELL

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Equity Bottom-Up

<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/172/980/original/BANNER-LOGISTICS.png?1605971640" class="editor-image img-responsive" data-smartkarma-image-id="172980"></figure></section><p>In October, Chinese express parcel volume growth remained strong. However, pricing was weak, and we see no signs of price improvement in the near-term. Margins remain under pressure. </p><p>A slew of Q3 earnings results show some companies losing money, with margins at almost all of the companies under intense pressure. <a href="https://www.smartkarma.com/entities/best-inc" target="_blank" data-smartkarma-citation="entities:25494:1" rel="noopener">BEST Inc (BEST US)</a>'s recent decision to exit non-core businesses supports our thesis that pressure to consolidate is increasing. </p><p>We retain our view that SF Holding is the sector's leading company, but in the medium-term, we believe Best is an attractive way to play expected sector M&amp;A in 2021. </p>

In October, Chinese express parcel volume growth remained strong. However, pricing was weak, and we see no signs of price improvement in the near-term. Margins remain under pressure. A slew of Q3 earnings results show some companies losing money, with margins at almost all of the companies under intense pressure. BEST Inc (BEST US)'s recent decision to exit non-core businesses supports our thesis that pressure to consolidate is increasing. We retain our view that SF Holding is the sector's leading company, but in the medium-term, we believe Best is an attractive way to play expected sector M&amp;A in 2021. 

TRACKING TRAFFIC/Chinese Express: Weak Q3 Results from ZTO & Best | Consolidation Pressures Gaining

S.F. Holding

TRACKING TRAFFIC/Chinese Express: Weak Q3 Results from ZTO & Best | Consolidation Pressures Gaining