Recently, Ping An Securities published an 2019 industry report on the domestic cold chain logistics industry: from the three dimensions of food cold chain, pharmaceutical cold chain, and cold chain logistics, it analyzed the performance of the market dimension and gave investment recommendations.

Food Cold Chain: The development of cold chain logistics resonates with the transformation of the entire food industry chain. Food is the most important downstream application of cold chain logistics. The food industry and cold chain logistics will resonate at three levels: 1) The consumption upgrade on the demand side is the underlying logic. Spontaneous and moisturizing changes in consumer preferences and purchasing behaviors are silent. Demand for low-temperature meat milk is accelerating under consumption upgrade freed. At the same time, the convenience of life and the rise of catering have boosted the consumption of frozen products. 2) The transformation of the terminal catering retail format: the rise of new retail formats such as fresh e-commerce, catering and retail integration, and chain catering central kitchens has rapidly promoted the development of cold chain logistics. 3) The upstream structure of the industry chain is changing dramatically: under the normalization of African swine fever, policies guide centralized slaughter and cold chain circulation, and the concentration of slaughter is rapidly rising to promote the layout of the cold chain.

Pharmaceutical cold chain: strong growth momentum, high thresholds favor industry leaders: pharmaceutical cold chain logistics is the next star category after the food cold chain. The products of cold chain transportation of medicine mainly include vaccines, biological products, biological drugs, diagnostic reagents, etc. With the continuous expansion of these types of drugs and stricter supervision, my country's pharmaceutical cold chain has a long-term space and strong growth momentum. According to our estimates, the scale of my country's pharmaceutical cold chain logistics market in 2018 was approximately 13 billion yuan (data of third-party pharmaceutical cold chains have not been measured), and the industry growth rate is expected to be about 15% and it will continue to grow. The pharmaceutical cold chain industry has a high threshold, large initial investment, and requires a certain customer base to support the acquisition of new business. The leading companies in the pharmaceutical circulation industry have obvious first-mover advantages, and the future concentration will favor the industry leaders.

Cold chain logistics: the rapid development of the industry and the accelerated layout of giants: In 2018, the scale of China's cold chain logistics market reached 303.5 billion yuan, an increase of 19% year-on-year. It is expected to grow by 24.5% and 24.3% in 2019 and 2020 respectively. Cold chain logistics is in rapid development period. At present, my country's cold chain logistics is dominated by food cold chain, and the industry concentration is low. In 2018, the market share of top 100 enterprises is only 13.8%. With the continuous release of national policies supporting cold chain logistics, more and more capital is paying attention to the cold chain logistics industry, and e-commerce giants such as JD.com, Suning, and SF Express and express delivery giants are accelerating the deployment of cold chain logistics.

Cold chain logistics equipment: the competitive landscape tends to be concentrated, and commercial display cabinets are expected to give birth to large market value companies: in 2018, the market size of China's quick-freezing equipment, cold storage equipment, refrigerated trucks, refrigerated containers, and commercial display cabinets were 2.5 billion yuan, 7 billion yuan, 45 100 million yuan, 7.4 billion yuan and 13 billion yuan. Quick freezing equipment, cold storage equipment and commercial display cabinets have good growth. In terms of the competitive landscape, Sifang Technology has become a domestic leader in quick-freezing equipment. DaLeng and Yantai Ice Wheel are dual leaders in domestic cold storage equipment. CIMC Group is the global leader in refrigerated trucks and refrigerated containers. Hairong Cold Chain is the leader in domestic commercial display cabinets. The competition pattern of cold chain logistics equipment tends to be concentrated. The commercial display cabinet industry has a large space and good growth. The market share of domestic leading companies still has a lot of room for improvement, and it is expected that large-cap companies will be born.

Investment advice: Cold chain logistics is changing our lives. Food cold chain and pharmaceutical cold chain jointly promote the development of the industry. 1) With the expansion of pharmaceuticals and stricter regulation of pharmaceuticals, the concentration of pharmaceutical cold chains tends towards large and medium-sized enterprises. It is recommended to focus on Kyushutong, China Resources Pharmaceutical, Sinopharm Holdings and Shanghai Pharmaceuticals. 2) The cold chain industry has a low concentration of industries. It is recommended to pay attention to the layout for many years and has become the largest cold chain transportation company in the country. 3) The potential of commercial display cabinets in cold chain logistics equipment is large, and there is still room for improvement in the concentration of leading enterprises. It is recommended to pay attention to the Hairong cold chain of domestic commercial display cabinets.