Results Review

2Q26 results in line with our expectations

Yunda Holding announced its 1H26 results: Revenue rose 6% YoY to Rmb26.44bn, net profit attributable to shareholders grew 89% YoY to Rmb998mn, and recurring net profit increased 106% to Rmb931mn. In 2Q26, revenue rose 10% YoY to Rmb13.86bn, net profit attributable to shareholders grew 146% YoY to Rmb511mn, and recurring net profit grew 230% YoY to around Rmb475mn, in line with our expectations, as per-parcel earnings recovered thanks to continued efforts to tackle involution-style competition in express delivery.

Per-parcel data: In 2Q26, the firm's parcel volume fell 2% YoY to 6.55bn units, with a market share of 12% (-0.7ppt YoY), implying per-parcel revenue of Rmb2.12 (+Rmb0.22 YoY and -0.09 QoQ). Per-parcel cost was Rmb1.95 (+0.16 YoY and -Rmb0.05 QoQ), and per-parcel net profit was Rmb0.08 (+0.05 YoY and - Rmb0.01 QoQ).

Trends to watch

Sector-wise: Parcel volume growth slowed in 2Q26, but ASP continued to rebound thanks to China’s efforts to tackle involution-style competition. According to the State Post Bureau, parcel volume and ASP rose 4.2% and 3.4% YoY in 2Q26. Parcel volume and ASP rose 4.1% and 4.0% YoY in July, implying continued price recovery. On the demand side, we believe the industry may grow faster in 2H26 than in 1H26, as the high base effect will gradually fade. In addition, we expect prices to continue to improve as the industry has attached great importance to tackling involution-style competition since 2H25.

Company level: Expense control continued in 1H26; parcel volume gradually recovered and profit improved. In 1H26, the firm's combined G&A, selling, financial, and R&D expenses fell 10.87% YoY, and its per-parcel expenses fell Rmb0.01 YoY to Rmb0.07. We expect the firm to continue to improve efficiency thanks to rising capacity utilization rate and refined management.

In addition, the firm's parcel volume fell 6.0% YoY in 1Q26, fell 1.5% YoY in 2Q26, and rose 0.5% YoY in July, with YoY growth gradually turning positive and recovering. We expect the firm's earnings recovery to continue, given ongoing efforts to tackle involution-style competition in the express delivery industry since 2H25 and the low base of the firm's earnings per parcel.

Financials and valuation

We keep our earnings forecasts unchanged at Rmb2.2bn for 2026 and Rmb2.52bn for 2027. Maintain OUTPERFORM. We maintain our TP at Rmb10.50, implying 14x 2026e and 12x 2027e P/E. The stock is trading at 9x 2026e and 8x 2027e P/E, offering 59% upside.

Risks

Lower-than-expected parcel volume growth; fiercer competition; sharp rise in labor and fuel costs.