Increased competition in the courier industry is growing rapidly, triggering a new round of investment financing tide. Over  the past decade of China's e-commerce has experienced explosive growth,  from 2005 to 2014, China's online shopping transaction volume CAGR of  78% in 2014 to reach 2.8 trillion yuan, an increase of 47%, it is still  in rapid growth track, an increase far higher than the overall growth rate of retail sales. Driven  rise in electricity supplier courier downstream industry to maintain  rapid growth, China's express delivery business volume year on year  growth for four consecutive years of more than 50% in 2014 for the first  time surpassed the US as the world's major powers Zi courier. But  in recent years, China's express delivery industry concentration is  declining, we believe industry concentration, especially in the share of  the top four express delivery giants fell demonstrates the large-scale  intervention in the capital, a strong downstream electricity supplier  giant bargaining power in the background, the courier industry competition has gradually intensified, and increased competition trend  will continue to exist for the foreseeable future few years.

In  recent years, with the rapid development of the domestic express  delivery, electricity providers, so that investment and financing growth  trend year by year, large amounts of capital have been into this  emerging market. In  particular, by the end of 2015 STO bulletin intends to backdoor landing  A-share capital market, we believe that will soon break the balance  between the courier giant, in 2016 began the first round of the capital  market is expected to usher in a wave of asset securitization express  delivery giant. Immediately after the listing from the financing plan, we believe that  for the express delivery industry into a new round of capital  expenditure, "blood", before "Stone one of" extremely low permeability  of automation and information technology capacity is expected to be  large-scale expansion.

Express delivery giants - logistics automation under a blue ocean market. We believe that the logistics automation industry, the last round of market expansion
Zhang is the main driver of the electricity supplier and brand apparel  business volume financing or listing (Jingdong, Ali Baba, the only  product will, HAILAN
Home, the United States together superior products, etc.), mainly  located in the high-end market, some foreign logistics automation  systems integrators to achieve even annual orders
Growth miracle doubled, while the focus of the next round of market  expansion will come from the express logistics of this production value  of up to 300 billion yuan, and
Still maintained a high growth emerging downstream industries. Looking forward, we believe, express delivery areas will have three advantages for automation transformation:

Downstream market large (~ 300 billion yuan output value of +120 million employees),

Low  degree of automation (except SF and EMS transformation to a certain  extent, the "Stone one of" the automation infrastructure is very low)  and capital abundant (16-17 years of public financing tide). And,  as a typical labor-intensive industries, labor costs accounted for the  courier industry is high (about 40-50%), in the distribution RTS sorting  (sorting machine), sub-warehouse storage (automatic storage system) and  logistics and transport (unmanned transport) and other sectors have a greater automation of room for improvement. We expect only a sorter a system in the courier industry is expected to reach ten billion market size.

International express delivery giant Automation: hard and soft minor professional service providers. Foreign express delivery industry a high degree of automation, has formed a German primary
Man wins Feier, Siemens and other long-term program provides several giant sorting system for the express delivery industry. Berman and other company's project experience, system maturity, and  software (butt courier company information systems) and hardware (belt  sorter, robot) the perfect combination.

Investment strategies and recommendations:

Related  investment targets to focus on: Connaught shares (603611, unrated)),  Tianqi shares (002009, BUY)), Wynn shares (300230, unrated)), Shandong  Weida (002026, unrated)), East Jie intelligent (300486, unrated)), soft control shares (002073, unrated)).