3 billion less, SF’s accident and inevitable

Just out of the quagmire

Wang Wei, who apologized three months ago, ran into trouble again.

In the case of a loss of 998 million yuan in the first quarter, on the evening of July 13, SF Holdings (002352.SZ) issued a 2021 half-year performance forecast. Although it turned losses into profits, the net profit attributable to the parent reached between 640 million yuan and 830 million yuan. Time, but it was 78% to 83% lower than last year.

You must know that this year’s half of the year has earned 3 billion yuan less than last year, and SF Holdings’ profits will reach 3.8 billion yuan under the epidemic in 2020.

From the perspective of stock prices, SF Holdings has entered a downward channel, and its stock price has evaporated by nearly 300 billion in market value.

It has to be said that there are problems in the operation of SF Holdings. At the first quarter shareholders meeting, Wang Wei once frankly stated how to better match the industrial operation model with resources and form economies of scale to get rid of losses. I hope that these problems will just become hot spots in the first quarter. Repeat the same mistakes.

Frankly speaking, SF Express has just stepped out of the quagmire, but in the era of making money when accustomed to high prices, Wang Wei is now facing a price war, but Wang Wei is facing a difficult and dangerous road.

Differentiated strategy, SF Express wins at high prices

In 1993, SF Express started in Shunde, Guangdong. At the beginning of its establishment, SF Express, like other private express companies, adopted the franchise model to rapidly expand its scale.

This method worked well when SF’s human and financial resources were limited. It also caught up with the booming development stage of the express delivery market, and SF has achieved rapid expansion.

However, with the further development of the company, the drawbacks of this loose joining method are gradually exposed. Each contracting area is independent of the headquarters, and the relationship between franchisees and the headquarters is becoming increasingly tense.

In 1999, SF Express started a nationwide “recovery of power” operation. After more than 3 years of hard work, the transformation from franchise model to direct management model has been completed.


From top to bottom across the country, there is only one voice. This lays the foundation for SF Express to adopt a differentiated development strategy in the future to focus on the mid-to-high-end express delivery business with faster timeliness, better service, and higher safety standards. After completing the direct sales model, SF Express spared no expense, increased investment, and started a nationwide large-scale express delivery network layout.

In terms of the logistics model, SF Express adopts an “end-to-end sorting and transit” logistics model, relying on increasing the speed of freight to improve logistics efficiency.

At the same time, SF Express adheres to the differentiated competition strategy and takes the route of high-end boutique services, resulting in higher operating costs and higher freight rates.

In terms of intra-city and inter-provincial business, the price difference between SF Express and other private express companies is not too big, but in terms of inter-provincial express prices, it is about twice as high as other express companies. The price disadvantage is obvious, and the price gap is blocking. Quite a lot of ordinary customers.

Taking Beijing-Shanghai 20kg heavy cargo as an example, the first weight of SF Holdings starts at 77 yuan, while JD Logistics’s starts at 70 yuan, and the overall timeliness of SF Holdings is also very high. Taking Beijing-Shanghai personal items as an example, SF Holdings’ most It will be delivered soon before 12 noon the next day.

In terms of time-sensitive express delivery, SF Express’s time-sensitive express (including SF Express Same Day, SF Next Morning, and SF Standard Express) will have a revenue of 66.36 billion yuan in 2020, an increase of 17.4% year-on-year.


On December 12, 2016, SF Express was approved to enter the A-share market and officially changed its name to SF Holdings on February 24, 2017. The average ticket revenue of the express logistics business in 2020 reached 17.77 yuan, far higher than the industry level of 10.55 yuan in the same period.

At the level of service content, the company’s business matrix is ​​divided into three divisions: express, express, and other products, mainly express, express, and other products.

Since 2020, the company will disclose segment financial data. Express, Express, and other segments have achieved foreign transaction revenues of 1233.97, 19.337, and 11.253 billion yuan in the whole year, of which Express segment achieved a net profit of 8.987 billion yuan, while Express and other segments have achieved a net profit of 8.987 billion yuan. During the strategic investment period, the Department of Youshang had a net loss of RMB 908 million and RMB 1.125 billion respectively.

As an independent corporate entity, SF Express has gone through a start-up period, a growth period, and a development period, and is now entering a period of strategic transformation. However, during this critical period of strategic transformation, SF Express encountered trouble.

 Times have changed, SF Express’s embarrassment

In the performance forecast of the semi-annual report, SF Express explained the reasons for the change in the loss in the first quarter and the profit in the second quarter.

In the case of a loss in the first quarter, SF Express focused on enhancing its comprehensive logistics service capabilities and creating digital supply chain solutions to accelerate market development and network resource investment in diversified business segments (including transfer sites and automation equipment, trunk and branch line capacity, etc.) , In order to alleviate the early-stage production bottleneck and support the rapid development of various businesses in the future. Such investment has caused the company’s cost to be under pressure in stages.

After that, SF Express, through cost savings, reviewed the resource allocation of each business line, strengthened the integration and optimization of resources such as the express network, express network, warehousing network, and franchise network, and continued to upgrade the automation equipment of the transfer site to promote some capacity bottlenecks get relief, resource utilization, operational efficiency and other chain steadily.


At the same time, we strengthened fine cost control, and with the increase in business volume, the cost of fixed assets was diluted, and the scale effect was reflected. In addition, boosted by the fresh seasonal peak season in the second quarter, the profitable time-sensitive express delivery business volume rebounded from the previous quarter.

However, the overall net profit of SF Express in the first half of the year turned from loss to profit, mainly due to a non-recurring gain or loss of nearly 850 million yuan brought about by the transfer of properties. Specifically, SF Express will be located in three properties in Foshan, Wuhu, and Hong Kong. The transfer of the equity to SF Real Estate Investment Trust Fund’s disposal proceeds.

There is a significant gap between the 1.836 billion in the third quarter of last year and the 1.728 billion in the fourth quarter. Comparing the previous single-quarter earnings data, it can be seen that the interim report is the best time for the annual performance. It can be seen that the performance of SF Express in 2021 is not optimistic.

As competition in the express market becomes more intense, the express industry is facing a new round of reshuffle.

Forced by the situation, in addition to its main express delivery business, SF Express has also begun to engage in e-commerce, cold chain transportation, financial services, warehousing services and other fields. The proportion of express delivery business revenue in total operating income has gradually decreased.

At present, the express market is in a fully competitive stage. Many companies are fighting price wars to increase market share. As industry competition intensifies, the industry structure will inevitably change in the future, and some small companies will be shuffled, reorganized, and eliminated , The market share of the remaining companies will be higher.

SF Express’s existing situation is a company that relies on high profits, but the logistics industry must first control costs, occupy market share, and then improve service quality.

SF Express currently has a market share of approximately 8% in the express delivery industry, which is not commensurate with its brand recognition and customer reputation in the industry . If it does not increase its market share, its industry leading position will be threatened.

Taking the May business briefing as an example, SF Holdings’ single-ticket revenue for the month was 15.59 yuan per ticket, while in January this year, SF’s single-ticket revenue was still 17.26 yuan, which means a sharp drop of 13.44% year-on-year.

In the recently released June operating report, SF Express’ single ticket revenue was 15.91 yuan, which continued to decline by 11.07% year-on-year.

At present, SF Express’s main business area is high-end business express. Although this segment has a higher profit margin, compared with e-commerce express, the total business volume is too small and there are incremental bottlenecks. It is impossible to grow rapidly without restrictions. It will be very difficult for SF Express to seize the opportunity to seize this wave of rapid development of e-commerce. After the mergers and reorganizations of other companies are completed and the market structure is relatively stable, it will be quite difficult for SF Express to seize the site.


After all, the era of high-priced services has passed. Behind SF Express, YTO Group puts cost control in the first place and service improvement in the second place, which is in line with the laws of the industry.

The situation of the whole industry in the price war is an accident, but it is not surprising that low prices appear, because the low prices of express delivery can stimulate more demand, and the express delivery industry is still a sunrise industry.

Just as at the Shenzhen Stock Exchange SF Holdings’ listing ceremony, Wang Wei confessed that he didn’t believe in chance. When all the causes and effects are brought together, you can compare them and you will know that it is inevitable.

At that time, his wish was to use SF Express’s good platform to turn many uncertain and seemingly accidental things into inevitable in the future. Now it seems that SF Express’s losses also exist accidental and inevitable.

 SF Express: The next SF Express?

Wang Wei once said that SF Express has no interest in wealth. SF Express is a faithful company, but capital and investors do not necessarily have faith.

From the perspective of corporate strategic layout and business framework, or from the successful experience of international express giants, diversified development is the only way for express companies to become bigger and stronger.

Of course, when implementing a diversified development strategy, it is also necessary to make choices and focus based on the development of new entrants and the company’s own conditions.

Judging from the growth trajectory of industry benchmarking companies, the two fields of cold chain transportation and heavy cargo transportation have now become an important part of the income sources of international express delivery giants. Therefore, SF Express should take advantage of its existing advantages in the traditional express delivery field and focus on this. Two areas are intensively cultivated.

After so many years, SF Express has not given up on its exploration of new business, just like urban distribution, cold chain, medicine, supply chain and unmanned sales and other fields, trying to get out of the second curve of growth.

Judging from the current results alone, from 2018 to 2020, SF Express’s gross losses in the same city will be 231 million yuan, 336 million yuan, and 189 million yuan; net profit attributable to the parent will be -328 million yuan, -470 million yuan, and -758 million yuan. The expansion of the loss scale is related to the increase in the order volume. The gross profit of a single ticket from 2018 to 2020 is -2.90, -1.59 and -0.25 yuan/order, and the net profit of a single ticket to the parent is -4.12, -2.23 and -1.00 yuan/order, respectively. one.

Affected by economies of scale and business structure, the company’s single-vote revenue has shown a downward trend. From 2018 to 2020, it will be 12.45, 9.98 and 6.37 yuan/order, respectively, with a compound annual growth rate of -28.47%.

Among them, SF Express’s intra-city operating cost expenditures are mainly labor costs. The proportions from 2018 to 2020 are 97.80%, 97.30%, and 97.81%, respectively. The labor cost per ticket is 15.01, 11.26 and 6.47 yuan per ticket. The temporary single ticket revenue has not yet covered the labor cost of the single ticket.


Compared with Dada Group, Dada Group, which was established earlier and undergoes mergers and acquisitions, has a larger order volume compared with Dada Group. In 2020, the order volume of SF Express and Dada Group will be 7.61 billion and 1.057 billion, a difference of about 40%. , Among which the last kilometer orders were 5.40 and 738 million orders respectively.

In terms of single ticket revenue, SF Express City has decreased year by year, and Dada Group has increased year by year. SF Express City’s single ticket revenue for 2018-2020 is 12.45, 9.98 and 6.37 yuan per ticket, and Dada Group’s single ticket revenue for 2018-2020 is 3.73, 4.11 and 5.43 yuan/order.

In terms of single ticket cost, SF Express’s single ticket cost in the same city is higher than that of Dada Group. SF Express’s single ticket cost in 2018-2020 is 15.35, 11.57, and 6.61 yuan/order, a drop of more than 50%. Dada Group’s single ticket cost in 2018-2020 is 3.97, 3.77, and 4.47 yuan/order, and the difference in business structure places a single ticket The cost is lower than that of SF Express.

In SF’s intra-city business, SF has followed the same old path as express delivery, with unfavorable cost control and still relying on high prices to maintain its source of profit.

Looking back on the development history of SF Express, looking for the second curve naturally Wang Weisheng has been deliberating about the problem. In the future, where SF’s huge capacity flow will flow, whether it can break out of a new continent , it is still a mystery.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/3-billion-less-sfs-accident-and-inevitable/
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