Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Thematic (Sector/Industry)

<ul>
<li>Combined January-February express industry parcel volume was up just 4.6% Y/Y, and ASPs were down -1.8% Y/Y</li>
<li>Listed express companies' parcel volume and government-reported online tangible goods sales in the first two months of 2023 also both up a modest ~5% Y/Y</li>
<li>In a year when one express player hopes to list its shares, it's unclear who will be willing to concede market share. We expect price competition to intensify in 2023.</li>
</ul>


Combined January-February express industry parcel volume was up just 4.6% Y/Y, and ASPs were down -1.8% Y/Y
Listed express companies' parcel volume and government-reported online tangible goods sales in the first two months of 2023 also both up a modest ~5% Y/Y
In a year when one express player hopes to list its shares, it's unclear who will be willing to concede market share. We expect price competition to intensify in 2023.


TRACKING TRAFFIC: Chinese Express / No Signs of a Sharp Recovery in Jan-Feb Data

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zto-express" target="_blank" data-smartkarma-citation="entities:23628:1" rel="noopener">ZTO Express (ZTO US)</a> met consensus Q422 EPS estimate despite a miss on Revenue</li>
<li>Management expects to exceed industry volume growth (around +10%) in 2023</li>
<li>Likely obstacles to a sharp earnings recovery are: ASP momentum, "new-old" competition, and a lack of demonstrated cost control</li>
</ul>



ZTO Express (ZTO US) met consensus Q422 EPS estimate despite a miss on Revenue
Management expects to exceed industry volume growth (around +10%) in 2023
Likely obstacles to a sharp earnings recovery are: ASP momentum, "new-old" competition, and a lack of demonstrated cost control


ZTO Express Q4/2022 Results & Guidance:  Moderate Growth in '23, but Also Obstacles

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>The pricing trend is expected to experience higher sequential decline 1) parcel pricing is at a high point; 2) alleviated cost pressure; 3) delivery companies try to capture parcel volume. </li>
<li>The collaboration with PDD’s Temu could provide J&amp;T a source of international order volume. For its potential IPO, J&amp;T’s overseas operation gives more room of imagination than its domestic business.</li>
<li>We downgrade SFH to SELL with TP of RMB48 due to Fengwang’s unpromising outlook .Our top pick of the Logistics sector remains ZTO. We are a buyer to JD logistics.</li>
</ul>


The pricing trend is expected to experience higher sequential decline 1) parcel pricing is at a high point; 2) alleviated cost pressure; 3) delivery companies try to capture parcel volume. 
The collaboration with PDD’s Temu could provide J&amp;T a source of international order volume. For its potential IPO, J&amp;T’s overseas operation gives more room of imagination than its domestic business.
We downgrade SFH to SELL with TP of RMB48 due to Fengwang’s unpromising outlook .Our top pick of the Logistics sector remains ZTO. We are a buyer to JD logistics.


China Logistics Sector Update & Downgrade S.F. Holding (2352.CH) To SELL: Pricing Pressure in 1H

Equity Capital Markets

SHEIN Global Holdings / Equity Capital Markets

<ul>
<li>By executive order, President Trump suspended section 321 ("de minimis") imports on Feb 4th</li>
<li>Direct-To-Consumer imports valued at &lt; US$800 may no longer enter the US duty-free</li>
<li>Added cost and new paperwork burden (both borne by US consumers) to hit SHEIN, Temu</li>
</ul>


By executive order, President Trump suspended section 321 ("de minimis") imports on Feb 4th
Direct-To-Consumer imports valued at &lt; US$800 may no longer enter the US duty-free
Added cost and new paperwork burden (both borne by US consumers) to hit SHEIN, Temu


Trump Admin's Tariff Headlines Obscure Suspension Of "De Minimis" Rule | Big Impact on SHEIN, Temu

<ul>
<li>Over the last 25 months, there's been a steady stream of bad news for DTC platform SHEIN</li>
<li>The latest challenges: US tariff chaos &amp; Amazon's launch of its competing platform, Haul 
</li>
<li>Tariff changes &amp; growth of Haul could mean SHEIN IPO gets done at fraction of 2023 valuation</li>
</ul>


Over the last 25 months, there's been a steady stream of bad news for DTC platform SHEIN
The latest challenges: US tariff chaos &amp; Amazon's launch of its competing platform, Haul 

Tariff changes &amp; growth of Haul could mean SHEIN IPO gets done at fraction of 2023 valuation


It's Been a Tough Two+ Years for SHEIN & Its Investors, & Things Don't Get Easier From Here

China

SF Holding Co., Ltd. is a leading Chinese multinational integrated logistics service provider. It offers a comprehensive suite of services including express delivery, freight, cold chain logistics, intra-city on-demand delivery, international express, international freight and forwarding, and supply chain management. The company is headquartered in Shenzhen, China, and was founded in 1993.

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SF Holding (6936 HK)

TRACKING TRAFFIC: Chinese Express / No Signs of a Sharp Recovery in Jan-Feb Data

So far in 2023, parcel volume has recovered only moderately. We believe the industry may again see price deterioration after a brief respite in 2022.

Tracking Traffic

ZTO Express Q4/2022 Results & Guidance: Moderate Growth in '23, but Also Obstacles

ZTO guides strong volume growth and potentially better unit economics in '23, but we expect price pressure to return, and the company needs to rein...

Daniel Hellberg

China Logistics Sector Update & Downgrade S.F. Holding (2352.CH) To SELL: Pricing Pressure in 1H

We downgrade S.F. Holding to SELL due to Fengwang’s unpromising outlook under competitive pricing environment. Our top pick of the Logistics sector...

Blue Lotus Research Institute

Trump Admin's Tariff Headlines Obscure Suspension Of "De Minimis" Rule | Big Impact on SHEIN, Temu

Now that fast-fashion giant SHEIN has finally filed offering documents in Hong Kong, we believe it's a good time to revisit the company's recent...

Tracking Traffic

It's Been a Tough Two+ Years for SHEIN & Its Investors, & Things Don't Get Easier From Here

Now that fast-fashion giant SHEIN has finally filed offering documents in Hong Kong, we believe it's a good time to revisit the company's recent...

Tracking Traffic

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