In September 2025, China's express delivery sector handled 16.88 billion parcels, marking a 12.7% year-on-year increase, while total volume for the first nine months reached 145.08 billion parcels, up 17.2% YoY. Industry revenue rose 7.2% YoY in September, though average revenue per parcel fell 4.9% YoY. For January-September, revenue grew 8.9% YoY, with per-parcel revenue down 7.1% YoY. Notably, the decline in per-parcel revenue narrowed both YoY and month-on-month in September, signaling easing price competition amid industry-wide "anti-internal competition" measures.

Guotai Haitong highlights that these measures are mitigating competitive pressures, with e-commerce express delivery profits expected to recover in H2. Future profit flexibility hinges on sustained price hikes, warranting close monitoring of postal regulatory oversight. Key takeaways:

**Volume Growth**: - **Industry-wide**: September parcel volume surged 12.7% YoY; January-September volume jumped 17.2% YoY, exceeding the postal regulator’s full-year growth forecast of 8%, driven by lightweighting trends and e-commerce promotions. - **E-commerce players**: YTO Express (600233.SH), Yunda (002120.SZ), and STO Express reported September volume growth of 13.6%, 3.6%, and 9.5% YoY, respectively. - **Direct-operated leader**: SF Holding (002352.SZ) saw a 31.8% YoY spike in September volume, outpacing peers for seven consecutive months due to enhanced frontline incentives.

**Market Concentration**: The CR8 index rose to 86.9 in January-September 2025, up 1.7 points YoY, reflecting accelerated consolidation. - **E-commerce segment**: YTO, Yunda, STO, and J&T Express-W (01519) held Q3 market shares of 15.6%, 13.0%, 13.2%, and 11.3%, respectively. - **SF Holding**: Q3 share climbed to 8.7%, up 0.2 percentage points QoQ.

**Pricing Trends**: - **E-commerce players**: September per-parcel revenue for YTO, Yunda, and STO rose 1.38%, 0.50%, and 4.95% YoY, respectively. - **SF Holding**: Per-parcel revenue dropped 13.3% YoY in September.

**Regulatory Impact**: Following the State Post Bureau’s July directive against "internal competition," base prices in Yiwu and Guangdong were raised by ¥0.2 and ¥0.4, respectively. Guotai Haitong expects these measures to foster long-term healthy competition and natural industry consolidation.

**Investment Outlook**: Favor SF Holding for its resilient growth and e-commerce express players like YTO, ZTO Express-W (02057), J&T Express-W, and Yunda for profit recovery. Risks include economic volatility, price wars, policy shifts, and fuel cost fluctuations.