Results Review

3Q26 results miss our expectations

Yunda Holding announced its 1–3Q26 results: Revenue rose 8% YoY to Rmb40.313bn. Net profit attributable to shareholders rose 72% YoY to Rmb1,257mn. Recurring net profit rose 75% YoY to Rmb1.148bn. In 3Q26, revenue rose 10% YoY to Rmb13.875bn. Attributable net profit grew 28% YoY to Rmb258mn. Recurring net profit rose 8% YoY to Rmb217mn, missing our expectation, mainly due to rising subsidy costs caused by the growth of the return parcels business.

Per-parcel data: In 3Q26, the firm's parcel volume fell 0.1% YoY to 6.412bn, with market share falling 0.4ppt YoY to 12.6%. Per-parcel revenue rose Rmb0.19 YoY and Rmb0.05 QoQ to Rmb2.16, and per-parcel cost rose Rmb0.20 YoY and Rmb0.09 QoQ to Rmb2.04. Net profit per parcel was Rmb0.04, up Rmb0.01 YoY and down Rmb0.04 QoQ.

Trends to watch

Sector wide: Parcel volume growth slowed in 3Q26, but ASP continued to rebound amid anti-involution campaign. Data from the State Post Bureau shows that industry parcel volume and ASP rose 3.0% and 3.7% YoY in 3Q26. Parcel volume and ASP rose 2.1% and 3.4% YoY in September, implying continued price recovery. On the demand side, we believe the industry may grow faster than in 1H26, as the impact of a high base gradually eases. Prices: Since 2H25, we believe the industry has attached great importance to anti-involution, and we expect price improvement to continue.

Company: Expenses further reined in; parcel volume recovered; profit came under pressure due to increased volume of return parcels. In 3Q26, the firm's total expenses fell 5.5% YoY, and per-parcel expense fell Rmb0.004 YoY to Rmb0.068. We expect the firm to improve its operational 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 1.4% YoY in September. In 3Q26, the firm's per-parcel profit came under pressure due to rising delivery costs. However, we expect per-parcel profit to recover QoQ in 4Q26, given falling delivery subsidies, anti-involution campaign in the express delivery industry, and price hikes in the peak season.

Financials and valuation

As rising costs of the firm's return parcel business weighed on profit per parcel, we lower our 2026 and 2027 earnings forecasts 22% and 21% to Rmb1,722mn and Rmb1,987mn. We maintain OUTPERFORM and cut our target price 22% to Rmb8.2, implying 14x 2026e and 12x 2027e P/E, offering 33% upside. The stock is now trading at 10x 2026e and 9x 2027e P/E.

Risks

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