GTHT issued a research report stating that the intensity of "anti-involution" efforts in the express delivery industry in 2025 has exceeded expectations, with short-term competitive pressure easing and continued assurance of healthy competition in the medium to long term. The firm maintains its "overweight" rating on the express delivery sector. "Anti-involution" will effectively alleviate industry competitive pressure, and e-commerce express profitability is expected to begin recovery in the second half of the year. Future profit elasticity will depend on the sustainability of price increases, with particular attention recommended on regulatory intensity from postal authorities. The firm continues to be optimistic about time-sensitive express delivery leaders with confirmed performance growth and e-commerce express profit and valuation recovery opportunities.
GTHT's main viewpoints are as follows:
The express delivery "anti-involution" efforts in 2021-2022 drove dual performance and valuation recovery. Since late 2019, leading companies initiated price competition aimed at widening market share gaps among top players. In 2020, new entrants adopted aggressive pricing strategies to capture market share, dragging the industry into sustained irrational price wars that put dual pressure on performance and valuations in the express delivery sector. More seriously, network stability risks became prominent in early 2021. Given the express delivery industry's nature as social public infrastructure, postal authorities decisively intervened in April 2021 to initiate "anti-involution" efforts. Leading companies' market share began initial recovery in Q2, single-ticket revenue centers rebounded in Q3, and profit and valuation recovery was achieved in Q4.
1) Postal authorities curbed irrational price wars to ensure network stability. In April 2021, Yiwu postal authorities ordered Best Express to suspend some sorting centers and make corrections within a specified timeframe due to low-price dumping. Yiwu express delivery floor prices rose from 0.8 yuan to 1.4 yuan. In September, the Zhejiang Province Express Industry Promotion Regulations required that services not be provided below cost without justifiable reasons. In December, the National Postal Administration explicitly opposed "involution."
2) Leading companies maintained firm profit recovery goals. Considering that irrational price wars significantly affected franchise network profitability and long-term confidence, leading companies maintained firm profit recovery goals in 2022, with industry competition easing and networks receiving respite.
3) Express delivery worker rights protection policies drove single-ticket revenue recovery. In June 2021, seven ministries issued "Opinions on Protecting the Legitimate Rights and Interests of Express Delivery Workers." By late August, e-commerce express companies collectively announced network-wide delivery fee increases of 0.1 yuan per package starting in September, aimed at implementing policies to improve express worker income and collectively transmitting cost pressures through coordinated price increases.
The intensity of express delivery "anti-involution" efforts in 2025 has exceeded expectations, with short-term competitive pressure easing and continued assurance of healthy competition in the medium to long term. Since the second half of 2024, attention to leading companies' market share has increased significantly again, with price competition intensity continuing to strengthen after the 2025 Spring Festival. Industry profit margins came under year-over-year pressure in Q1 2025, with declines expected to continue expanding in Q2, and express network stability risks becoming prominent again.
In early July, the National Postal Administration emphasized explicit opposition to "involution-style" competition. At the end of July, a symposium with express companies was held requiring stable network operations and franchise network stability. According to LogiLink, Yiwu floor prices were first required to increase by approximately 0.2 yuan in July. In August, multiple regions in Guangdong followed suit by raising floor prices by approximately 0.4 yuan, exceeding Yiwu levels.
The firm believes this round of "anti-involution" efforts will continue to deepen from top to bottom, with multiple regions potentially following with governance measures. "Anti-involution" will alleviate competitive pressure in the short term, and more importantly, continue to ensure healthy competition in the medium to long term, benefiting natural industry consolidation.
Regulatory intensity from postal authorities may determine price increase sustainability and future profit elasticity. In 2024, ZTO/YTO/Yunda/STO single-ticket net profits were 0.26/0.15/0.08/0.05 yuan respectively, declining under pressure in the second half of 2024 to 0.23/0.13/0.05/0.04 yuan in Q1 2025. E-commerce express delivery is expected to begin profit recovery in the second half of 2025, with potential for profit elasticity and valuation recovery if price increases are sustained.
Market concerns about potential impacts of price increases on small package volumes and subsequent concerns about price increase sustainability exist. The firm believes that if postal authority regulatory intensity continues and policies further guide protection of express worker legitimate rights and interests, the scope and sustainability of future price increases may exceed current concerns.
Risk warnings: Macroeconomic fluctuations, worsening price competition, policy risks, oil price volatility, etc.