Logistics industry: VAT reform pilot expansion of logistics impact on the review.
In terms of short-term profit impact, the railway is positive, the road is negative but there is a large government subsidy, which can have a small negative impact on logistics. Involve the addition of 10 provinces and cities we covered by listed companies respectively ninghu high-speed, shanghai-hangzhou-ningbo high-speed (H), zhejiang, anhui anhui high-speed, high-speed chutian, c&d co, guangshen railway, yuexiu (H) and the highway transportation, we expect profit in negative influence to highway industry is about 1% ~ 1%, mainly due to tax rates rise from 3% of the sales tax to 6% of the value-added tax, but the cost of deductible items caused by less. Among them, the negative impact of zhejiang huhangyong profit was the least, about 1%; The most negative effects of chutian expressway and wan-tong high speed were 7.0% and 6.5% respectively. For the guang-shenzhen railway, we expect to have a positive impact of about 4%, mainly due to the large number of deductible items in the railway industry. Please refer to figure 1 for details. However, in reference to the situation of the Shanghai airport and the Shanghai airport, the government has a larger opportunity to subsidize the tax increase in the pilot process, so the actual impact will be less than the theoretical value we calculated. At the same time, we calculated the profit impact of the pilot project on the listed logistics company. On average, there will be a small profit margin of about 2%. Please see the figure 2 in the text of our report.
In the medium term, it will reduce the cost of social logistics and improve the profitability of the logistics industry. However, it will be a bittersweet process for logistics enterprises to profit from the situation in Shanghai. The expansion of the pilot scope will increase the scope of deductible input tax, which will help reduce the burden of logistics enterprises and the overall logistics cost of the society. However, in the current economic weakness, overcapacity, disorganized industry and unregulated tax management, we believe that the profitability of the logistics industry will be a process of first suffering and sweet.
Initial profit negative impact, tax is difficult to transfer effectively. If the logistics is simply divided into three parts: warehousing, freight forwarding and transportation, the tax rate of the former two is only converted from 5% business tax to 6% value-added tax. The impact on the transport sector, from a 3 per cent sales tax to 11 per cent, is clear. We take the standard container road transportation as an example, the fee is about 650 yuan / 100 km, and the downstream customer tax is reduced by 26 yuan after tax reform. And transportation company is due to lack of input tax deductible tax increase 12 yuan, combine the chain on the overall tax fell 14 yuan, so is good for logistics cost reduction (table 4). However, as the transportation industry is similar to a fully competitive market, in the absence of current demand, we believe that the cost of tax increase before the economic recovery will be difficult to pass on effectively.
In the medium term, the positive effect is beginning to emerge, and the improvement of competitiveness leads to the improvement of market concentration. The gradual increase of deductible items leads to the decrease of tax cost and the enhancement of profitability.
In the aspect of logistics enterprises, although the profitability of short-term enterprises may be adversely affected, the competitiveness of logistics services is enhanced by the issuance of VAT tickets. Downstream enterprises, due to the benefits of outsourcing, will likely further expand the outsourcing scale and drive the expansion of the market share of the regular transport enterprises. At the same time, the tax pilot scope and the expansion of the region will enable the logistics enterprises to deduct the input tax increase, thereby reducing the cost of taxes and fees and improving the profit margin level. Therefore, in the medium term, the profitability of formal logistics enterprises will have a bottom - up development process.
It is beneficial to the optimization of industry pattern in the long run, but it will take a long time to complete. For small and micro businesses, it is obvious that the intention to promote the development and regularization of small enterprises is to be changed from 5% business tax to 3% VAT. In the future, the downstream customer business overall outsourcing to logistics and supply chain company, to segment has the advantage of professional small business, improve the overall chain operation efficiency, reduce operating costs of pattern will appear. However, considering the: 1) the government has the determination to tax reform, but drive slightly insufficient, such as tax rates set is still the basis of the total revenue is not obvious decline, rather than how to encourage business operations more efficient; 2) pattern of logistics industry is still very messy, low-end market revenue management is not standard still is given priority to with a vicious price competition, we believe that the gradual process still need longer time to complete. If the tax rate can be reduced and unified, it will lead to the development opportunity of the industry exceeding expectations.