Huatai Securities: Mid-year earnings confirm express delivery sector's health, focus on off-peak pricing

Huatai Securities research indicates that June saw a sequential improvement in consumption data, with total retail sales and retail sales of goods increasing by 1.0% and 0.9% year-on-year, respectively. Online retail demonstrated resilience, with online retail sales of goods growing by 3.9% year-on-year, as the high base effect from the earlier timing of last year's 618 shopping festival dissipated. Although the growth rate of express delivery volume slowed compared to May, price increases continued to expand year-on-year amid efforts to curb excessive competition, sustaining the sector's profit recovery trend. Recent mid-year performance forecasts from leading e-commerce express companies confirm the sector's improving conditions with significant year-on-year profit growth. Looking ahead, the industry will enter its traditional off-peak season following the conclusion of the 618 shopping festival. In the short term, attention should be paid to price competition and mid-year financial results. In the medium to long term, the "15th Five-Year Plan for Expanding Consumption" is expected to support sustained growth in express delivery demand. The current valuation of the sector remains at historically low levels, suggesting potential investment value in high-quality leading companies.