CITIC Lyon: It is expected that competition in the mainland express delivery industry will continue to be fierce, and the target price of Jitu Express - W (01519) is HK$13.6

The Zhitong Finance App learned that CITIC Lyon released a research report saying that overall, investors are aware of the slowdown in the industry, but they are still concerned about the average unit price outlook and the impact on oil prices. Express delivery companies agree that the average unit price will remain stable until at least the first quarter of next year. Zhongtong Express (02057) expects the unit price to rise by 0.01 yuan next year, driven by an improved customer portfolio. However, competition is likely to continue to be intense until regulators relax horizontal mergers and acquisitions requirements.

The report mentioned that the net profit of SF Express Holdings (06936) (002352.SZ) will be pressured by rising fuel costs, while overseas business is increasingly becoming an important driving force, and the moat of its logistics network capabilities continues to deepen. As for the steady increase in sales volume of Goku Express-W (01519) in Southeast Asia and Latin America, the company aims to achieve 0.07 US dollars per unit EBIT in both regions in the long term. As overseas growth and visibility improve, and domestic business is expected to strengthen, Jitu is still the first choice for this sector.

The bank currently offers Jitu a target price of HK$13.6, Zhongtong's target price of HK$216, and SF Express's A shares of RMB 41.3, all of which are rated “superior to the market”.