3Q25 results miss our expectations The firm announced its 3Q25 results: Revenue rose 3.29%

YoY and 0.12% QoQ to Rmb12.66bn; net profit attributable to shareholders fell 45.21% YoY and 3.11% QoQ to Rmb201mn; recurring attributable net profit reached Rmb202mn (down 40.59% YoY and up 40.05% QoQ). The firm's 3Q25 results missed our expectations, mainly due to lower-than-expected industry ASP in the first half of 3Q25.

Per-parcel data: In 3Q25, the firm's parcel volume rose 7% YoY to 6.42bn units, with a market share of 13.0% (-0.8ppt YoY), implying per-parcel revenue of Rmb1.97 (-Rmb0.06 YoY and +Rmb0.07 QoQ). Cost per parcel was Rmb1.84 (-Rmb0.02 YoY and +Rmb0.05 QoQ). Per-parcel net profit was Rmb0.03 (- Rmb0.03 YoY and largely flat QoQ), and recurring net profit per parcel was Rmb0.03 (-Rmb0.02 YoY and +Rmb0.01 QoQ).

Trends to watch Express delivery industry: Price competition eased amid anti-involution measures; parcel volume growth slowed; high-quality development remains the key theme. Data from

the State Post Bureau shows that the ASP of the express delivery industry fell 5.3%, 7.2%, and 4.9% YoY in July, August, and September, and was down Rmb0.13, up Rmb0.01, and up Rmb0.18 QoQ in July, August, and September.

We believe the industry's price hikes began to materialize in the second half of 3Q25, given the implementation of anti-involution measures. We expect price competition to continue to ease in 4Q25, and express delivery companies' profitability per parcel to continue improving.

Sector parcel volume grew 13.4% YoY in 3Q25 (vs. +19% YoY in 1H25). We believe rising express delivery prices may dampen the growth in demand for light and small parcels, which are of low ASP. We suggest watching the stabilization of sector growth.

Yunda Holding: Per-parcel earnings to continue improving in 4Q25; watch progress and resilience in earnings

recovery. In 3Q25, per-parcel net profit stayed largely flat QoQ at Rmb0.03, but recurring net profit rose Rmb0.01 QoQ to Rmb0.03. We believe price hikes will boost per-parcel earnings recovery. Given the sustainability of industry price hikes in 4Q25 and the low base for per-parcel earnings, we suggest paying attention to the progress and resilience of earnings recovery.

Financials and valuation

Considering rising pickup and delivery fee due to the implementation of anti-involution measures, we leave our 2025 revenue forecast largely unchanged, and raise our 2026 revenue forecast 6% to 56.16bn. Considering pickup and delivery cost risen simultaneously, lower-than-expected ASP in the first half of 3Q25 and parcel volume growth of the company, we cut our 2025 earnings forecast 30% to Rmb1,372mn, and introduce our 2026 forecast at Rmb1,804mn. We maintain an OUTPERFORM rating. Considering that the average valuation of the express delivery sector has risen, we maintain our target price of Rmb8.79, implying 19x 2025e and 14x 2026e P/E. The stock is trading at 15x 2025e and 12x 2026e P/E, offering 21% upside.

Risks

Parcel volume growth disappoints; fiercer competition; sharp rise in labor costs.