Results Review

4Q25 results missed our expectations but 1Q26 results beat Yunda Holding announced its 4Q25 results: Revenue rose 7% YoY to Rmb13.98bn; attributable net profit fell 13% YoY to Rmb441mn; and recurring net profit rose 4% YoY to Rmb0.49bn, missing our expectations. We attribute this to the slowed growth in parcel volume amid the firm’s structural adjustment.

Per-parcel data: In 4Q25, the firm's parcel volume fell 6% YoY to 6.46bn units, with a market share of 12% (-1ppt YoY), implying per-parcel revenue of Rmb2.17 (+Rmb0.26 YoY and +Rmb0.19 QoQ). Per-parcel cost rose Rmb0.22 YoY and Rmb0.12 QoQ to Rmb1.96. Net profit per parcel fell Rmb0.01 YoY but rose Rmb0.04 QoQ to Rmb0.07.

The firm also announced its 1Q26 results: Revenue rose 3% YoY to Rmb12.51bn, and attributable net profit rose 52% YoY to Rmb487mn, beating our expectations, as the effect of antiinvolution measures in the express delivery industry continued to exceed expectations.

Per-parcel data: In 1Q26, the firm's parcel volume fell 6% YoY YoY to 5.71bn units, with a market share of 12% (-1ppt YoY), implying per-parcel revenue of Rmb2.2 (+Rmb0.20 YoY and +Rmb0.04 QoQ). Net profit per parcel was Rmb0.09, up Rmb0.03 YoY and Rmb0.02 QoQ.

Trends to watch

Industry level: Price competition eased amid ant-iinvolvement measures; parcel volume growth slowed; high-quality development remains the main theme. Data from the State Post Bureau shows that the ASP of the express delivery industry rose 1% YoY or Rmb0.15 YoY in 1Q26. We believe the industry's price hikes since 2H25 have been gradually materialized, given the implementation of anti-involution measures. Express delivery companies' profit per parcel may continue to improve, in our view. Sector parcel volume grew 6% YoY in 1Q26, slowing from a year ago, but the quality of the customer structure may improve.

Company level: Effective cost and expense control in 2025; per-parcel earnings to continue improving in 1H26; watch earnings recovery. In 2025, the firm's core cost per parcel fell 11% YoY to Rmb0.61, and its expenses per parcel dropped 14% YoY to Rmb0.07. We think the firm will continue to optimize its costs and expenses as its capacity utilization rate increases and management efficiency improves. In addition, given the sustainability of the anti-involution measures in the express delivery industry since 2H25 and the low base of the firm's perparcel earnings, we suggest paying attention to potential earnings recovery ahead.

Financials and valuation

Considering the stronger-than-expected effect of anti-involution measures in the industry, we raise our 2026 earnings forecast 22% to Rmb2.201bn and introduce our 2027 earnings forecast of Rmb2.518bn. We maintain an OUTPERFORM and raise our TP 20% to Rmb10.5, implying 14x 2026e and 12x 2027e P/E and offering 29% upside. The stock is trading at 11x 2026e and 9x 2027e P/E.

Risks

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