Recently, SF Express, a spin-off subsidiary SF Express, submitted a prospectus to the Hong Kong Stock Exchange. It is expected to be listed in Hong Kong around the Mid-Autumn Festival, which is expected to impact the “first share of immediate delivery.” Although the transcript in the prospectus is not ideal and has caused many speculations and doubts in the market, there are not a few people who are optimistic about SF Express, a relatively successful logistics company backed by SF Express.
For a long time, SF Express’s influence in private logistics companies has been prominent, and it has ranked first in the “Overall Satisfaction of Express Delivery Companies” list for 12 years. With the advantage of shipping, SF Express’s market share has increased to 9.76% in 2020. , Is the out-and-out logistics leader. However, this year’s days have not gone smoothly for this leader.
(The picture comes from Canva drawable)
Turn losses into profits?
Since entering 2021, SF Express’s performance has been poor, and even experienced a loss of nearly 1 billion in the first quarter. Although the performance in the second quarter has improved, it is still difficult to make up for the huge loss in the first quarter. The overall data for the first half of the year is still not very good.
According to the performance forecast recently disclosed by SF Express, the net profit attributable to shareholders of listed companies in the first half of 2021 is expected to be between 640 million and 830 million, a decrease of 78% to 83% from the same period last year. Among them, the estimated net profit for the second quarter is between 1.6 billion and 1.8 billion. For SF Express, under the pressure of fierce competition in the industry, it is not easy to turn losses into profits in the second quarter.
In addition to the improvement and optimization of its own facilities and operations, the “618” e-commerce activity has also brought a lot of help to the entire logistics market. According to statistics from the State Post Bureau, in June, the business volume of express service companies across the country completed 9.74 billion pieces, a year-on-year increase of 30.4%. SF Express naturally also enjoyed this wave of dividends.
In the short term, SF Express had a small victory in the second quarter, but it was not a complete victory. Because looking at the entire e-commerce market, although SF’s business touches various fields, its proportion in e-commerce is only a small part. This is also inseparable from the layout of the e-commerce industry and SF’s own reasons. .
E-commerce accounted for a small proportion
E-commerce has been closely related to the logistics industry since ancient times. The improvement of logistics has promoted the development of the e-commerce industry. Naturally, the continuous growth of e-commerce has also promoted the prosperity of the logistics industry. However, the relationship between this prosperity and SF Express is not great, because SF Express does not completely rely on e-commerce platforms.
As a result, the price of SF Express is too high, which does not match the small profits but quick turnover of the e-commerce platform. Due to SF Express’s high-cost operation and its positioning of focusing on business parts, SF Express once missed the dividend period of e-commerce development. Although SF Express later launched a series of special special products for major e-commerce customers, SF Express does not have an advantage compared to other companies’ single-ticket prices of one yuan and two yuan.
Second, the e-commerce platform and logistics companies are seriously tied up, and SF Express is not among the candidates. Looking at the current e-commerce giant Ali, they have already been “deeply” bundled with Tongda Express through investment; JD.com has built JD.com logistics, which is the best in warehousing; Pinduoduo has a new dark horse and rabbit. Among them, SF Express has not been seen.
The reasons for price and business positioning are on the one hand, it is understandable that SF Express wants to be “beautiful alone”. However, the fact that we missed the big cake of e-commerce will indeed have some impact on the future development of SF Express. With the explosion of live streaming and short video e-commerce, SF Express will also be squeezed by its peers in terms of business volume.
How to balance business
In response to the frustration in the e-commerce business, SF Express did not give up the option of e-commerce, choosing to empower e-commerce and build its own e-commerce platform through investment. However, this behavior did not cause much splash, nor did it support SF Express’s ideal e-commerce business.
In the future, as the e-commerce platform and other logistics companies become more and more tied up, the consequences of SF’s missing dividend period will gradually increase. However, if a company can lead the industry for many years, the other end of its business scale will naturally be repeated. SF Express chose to seek new additions at the level of diversified layout.
Up to now, SF Express has successfully transformed from a single express delivery business to the largest integrated logistics service provider in China, which has differentiated the logistics service industry. Its new businesses include express, intra-city, and cold transport. Under SF Express’s high-speed operations, new businesses account for nearly 30% of the company’s overall revenue.
In addition, SF Express has also packaged its Shenzhen headquarters and logistics real estate in Hong Kong into SF REIT to be listed on the Hong Kong stock market; and in the intra-city express delivery business segment, it also split the intra-city business into the capital market. In this way, SF Express’s new business can also rely on listing and financing to operate and expand the basic market.
Compared with the local life of other logistics companies, SF Express has undoubtedly made great strides in this regard. With its diversified layout, relying on its efficient transportation speed and service, SF Express can also take a break from the restraint of its e-commerce business.
Warring States Disputes in the Express Industry
The current SF Express still sits firmly at the top of the market, but it is also true that the company’s performance is sluggish and the stock price is weak.
From the perspective of the entire logistics industry, two documents related to the express delivery industry have been issued successively to address the pain points and difficulties in the current development of the express delivery industry, in order to promote the express delivery industry to a healthy and orderly development under the pressure of supervision. . The previous chaos in the market has also brought some benefits to SF Express’s future competition and development.
In terms of market share and corporate strength, Zhongtong is the only domestic express company with a market share of more than 20%, twice that of SF Express. In addition, Zhongtong is a leader in the Tongda system in terms of business volume and profitability, and is also a strong opponent that is bound to fight SF Express in the future.
From the perspective of service quality, with the listing of JD Logistics, it is on the same level as SF Express; China Post has also carried out a series of speed-up actions to return to the logistics market. Both are on par with SF Express in terms of service quality, and they are also SF Express’s long-standing rivals. In addition, the Tongda department has gradually paid attention to the service after the service has been criticized everywhere, which also discounted the advantage of SF Express.
On the whole, good industry and elimination of chaos is a good thing for every company in it. Healthy competition can promote the innovation and development of the company, and it can also promote the transformation of the industry. On the contrary, vicious competition will also bring about the entire industry. Brings unspeakable hidden dangers.
For giants including SF Express, the market needs reasonable guidance and regulation, and certain thresholds and rules are established to avoid “price wars” and low-price dumping. Only when logistics companies get better and better can they provide better services to many consumers.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/sf-express-missed-e-commerce-express/ Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.