After SF Express’s dismal performance in the first quarter came out, it caused an uproar in the industry. Today’s stock price also fell into a lower limit, and it is still on the Weibo search list.

The specific situation is that on the evening of April 8, SF Express released its first quarter 2021 financial report. The financial report shows that in the first quarter of this year, the company is expected to lose 900 million to 1.1 billion yuan, while in the same period of 2020, the company will make a profit of 907 million yuan under the epidemic. In the 2020 financial report data released by SF Express last month, the net profit attributable to shareholders of listed companies was 7.326 billion yuan, a year-on-year increase of 26.39%.

So, as soon as the financial report for the first quarter of 2021 came out, many people found that there was a big discrepancy with the performance released last month, with a loss of 900-1.1 billion yuan, which directly caused fierce reactions from market participants and retail investors, and subsequent stock markets appeared. Limit limit, hot search on Weibo.

What’s more dramatic is that just two days before the quarter’s earnings report, SF’s head Wang Wei also topped the fifth place in China’s rich list with a net worth of US$39 billion.

What caused the sudden “thunderstorm”? What is the current situation of SF Express in the express delivery industry? This loss must be sustained in the short term, or will it continue?

Why is there a sudden “thunderstorm”?

At present, the domestic epidemic is in a recurring stage. SF Express is a direct-operated express delivery company, and its direct-operating advantages have been fully utilized during the epidemic. The launch of SF Express and Fengwang.com has made its business volume and revenue growth of SF Express last year much better than before.

This time, the sharp drop in SF’s profit in the first quarter was the result of multiple factors, both external and internal, which were quite in line with expectations.

In the first quarter of last year, SF Express’s performance was indeed exceptionally good. The reason is very special. At that time, the epidemic situation was serious. SF Express was one of the few companies that could still operate, and its peers could not do it. At that time, the demand for isolated online shopping at home was relatively strong, which brought a small peak to SF Express.

But the situation has changed this year. On the one hand, the epidemic is properly prevented and the general environment is not like last year. On the other hand, almost all front-line express delivery services will not be closed during the Spring Festival this year, which has a diversion effect on SF Express.

Secondly, another factor that affects revenue is competition. First of all, the price war of e-commerce parts is too fierce. For example, the current price war in Yiwu is very fierce, and the price has been as low as 80 cents. A courier business person also told Huxi that, in fact, it is lower than 80 cents. Direct free delivery. Yiwu Post Management Bureau issued documents to rectify the price dumping of a certain express delivery. On the other hand, both JD Logistics and Zhongtong have carried out large-scaleThis will also have a certain impact on SF Express.

Furthermore, SF Express’s expenses are too large. On the one hand, it is the Spring Festival. During the Spring Festival, its operating costs are high. SF Express has also made a large number of short-term personnel subsidies; on the other hand, it is the investment in new business of each section, SF’s main business It is profitable, but new businesses such as express and express delivery are still at a loss stage. These new businesses themselves require SF Express to invest in infrastructure to lay the foundation. In addition, competition in these market segments is also fierce. For example, express is also in Fight a price war.

In this quarterly report, SF Express also gave 5 explanations for the huge losses:

  • The company is in a critical period of new business development. In order to expand market share and build long-term core competitiveness, the company continues to increase the pre-investment of new business, increase investment, and cost pressure.

  • Last year, the epidemic slowed the pace of the company’s capital expenditure investment, and the company’s business volume grew rapidly, resulting in capacity bottlenecks in multiple links of express. Since the fourth quarter of last year, the company began to increase its temporary resource input to undertake the increase, which put pressure on costs in the fourth quarter of last year and the first quarter of this year. At the same time, since the fourth quarter of last year, the company has increased capital expenditures, upgraded the automated production capacity of the transit field, and improved resource efficiency. It is expected to further alleviate the pressure on capacity bottlenecks in the second quarter of this year.

  • Based on the large-scale land transportation product business volume, the company re-examined the resource allocation of each business line. In the initial stage of integration, there will be overlapping resources.

  • In order to meet the non-closing arrangements for the Spring Festival and respond to the advocacy of reducing personnel turnover, the company provided a record high in subsidies for first- and second-line employees in the first quarter.

  • The company launched express and new standard express products in April this year. In addition, due to the high volume of preferential distribution business and the strong demand for e-commerce in the sinking market, economic business among existing customers has grown rapidly, and the company’s e-commerce parts gross profit has been under pressure.

Today’s loss result, there are traces to follow

Last year, Huxiong also mentioned when discussing the development of the domestic express delivery industry that SF Express’s development during the domestic epidemic was promising in the short term, but there are some other risks in the long term, one of which involves revenue issues. why?

On the one hand, as far as SF Express is concerned, compared to the low-end express market, the high-end market has a lower ceiling. At present, many franchised express delivery companies and JD Logistics are also working on the high-end market.Market competition has further intensified, resulting in further restrictions on the development of SF Express’s advantageous regions; on the other hand, limited by its direct-operated asset-heavy model, SF Express will find it difficult to grab a larger share of the e-commerce express delivery market.

Furthermore, it will also be reflected in the 2020 annual report. In 2020, SF Express achieved 8.137 billion shipments in express delivery services, a year-on-year increase of 68.46%, far exceeding the industry’s overall growth rate of 31.2%, and its market share increased to 9.76%, an increase of 2.15 percentage points from the previous year; the average revenue of express delivery services 17.77 yuan, a year-on-year decrease of 18.99%.

In other words, in 2020, while the overall express business volume and market rate of SF Express will increase, express delivery revenue will also decline. On the one hand, it may have something to do with the increased deployment of e-commerce parts and special items under SF Express’s “dimension reduction crackdown” and lower express delivery prices; on the other hand, it has a lot to do with the franchise express “Fengwang” that SF Express launched last year.

Furthermore, in order to increase market share and expand e-commerce business, SF Express, which has never participated in the express delivery price war, will also join the express delivery price war in 2020.

In addition, according to the 2020 financial report, it can be seen that the intra-city express delivery, international and supply chain businesses in SF Express’s new business are all in a rapid growth trend, but this business has a small contribution to the overall revenue of SF Express, accounting for only the overall revenue. At present, it is difficult to reverse the sluggish growth of the main business. In addition, Sitong Yida and JD Logistics are also grabbing SF’s 2B business at low prices, and the advantages of SF’s 2B business are slowly being weakened.

Therefore, although SF Express’s overall express delivery business volume and market rate are increasing in 2020, express delivery revenue is declining. This also laid the groundwork for this huge loss.

Currently, SF Express is constrained by its own funds, its network expansion speed is relatively slow, and its outlets cannot reach more low-end markets, which to a large extent makes it difficult for SF Express to fully penetrate the low-end markets.

In addition, the franchise express delivery industry is highly homogenized and is switching from the incremental era to the inventory era. The price war is intensifying. SF Express has a higher cost, and its single ticket cost remains above 14 yuan. Compared with franchise systems, such as Stone Generation and Extreme Rabbit, the single ticket cost is 0.7-1 yuan, and SF Express lacks a price advantage.

This loss is said to be a turning point for the better, some reluctantly

The change in SF Express’s performance this time is actually reasonable. It’s a long-term outlook. Although SF Express’s performance is under pressure in the short term, its fundamentals are good. Not only does its various segments have obvious leading advantages among the peers, but also its comprehensive logistics service capabilities are gradually improving. .

In addition, apart from the special node of the Spring Festival, the first quarter is not actually a peak season for business. Later, with the arrival of various expenditures, the increase in capacity construction, and the business peak season, the performance can also stabilize and rebound.

As for the stock price, it depends on the confidence of capital, but two points remain unchanged: SF Express’s leading position in the current logistics market has not changed, and the fundamentals have not changed in the long-term; as for the stock price, it is not high. Whether there is a bubble before, you can compare UPS, FedEx, and DHL.

Furthermore, Wang Wei also has expectations for this loss.

At the 2020 annual performance briefing meeting, Wang Wei once said that SF Express is committed to becoming an independent third-party industry solutions data technology service company. Focusing on this core goal, it has continued to consolidate its comprehensive logistics service capabilities and continue to invest in technology research and development for many years. A colleague told Tiger Sniff: Wang Wei’s remarks mean that SF Express will continue to invest in scientific research and will also increase SF Express’s capital expenditure needs.

Express expert Zhao Xiaomin analyzed to Hushou that SF Express’s loss in the first quarter was in line with market expectations. Because of the epidemic last year, SF Express had delayed many of its capital expenditures that should be completed in 2020.

Nowadays, SF Express is also releasing a signal to the outside world to increase its investment in expanding the entire industry chain through further capital investment, and then to greatly increase the intensity and space of capital expenditure, which will definitely generate its own profits to a certain extent. Impact, but this is what SF Express has to face and must do now.

According to the Daily Business News report, some securities institutions also expected SF Express’s loss in the first quarter.

Essence Securities Research reported that it is expected that the growth rate of SF Holdings’ time-sensitive parts in the first quarter of 2021 will drop significantly. At the same time, the company will increase resource input from the fourth quarter of 2020. The impact on costs may continue to the first quarter of this year, taking into account the same period last year. The company enjoys toll reduction and exemption, value-added tax concessions, etc., and short-term profitability will be under pressure. The specific reasons include the high base in the same period last year (epidemic dividend + peers’ failure to resume work in time), this year’s Lunar New Year’s mis-scheduled impact on demand, and the Tongda system did not close to divert the scattered order business of some companies.

The Pacific Securities Research Report also pointed out that SF Holdings is under pressure on short-term costs due to incubating new businesses and innovating supply chain models.

Zhao Xiaomin also told Tiger Sniff that while we see that capital expenditure has a certain impact on SF’s profit, we must also see whether the current policies and market competition are beneficial to SF, and undoubtedly it is more beneficial to SF. of. SF Express has a great opportunity to increase capital expenditures. It has sufficient resources and capital. So from a relatively long-term perspectiveFrom a perspective, we can take this opportunity to further enhance SF’s leading advantage in the industry.

SF, it’s not the same thing as the Tongda department. SF Express is completely independent. As far as the three links and one da, they don’t pay enough attention to the corporate strategy after listing. Some companies have made mistakes in their continuous strategies. One point is unique to SF Express.

But from the other side, this loss cannot be said to be good, it can only be said that it is necessary to invest in the next stage of development.

Because of the time-sensitive parts business, although JD Logistics and Zhongtong are both challenging, SF Express is still the dominant player, and time-sensitive parts are the most important source of its revenue. This has not changed at present.

Next, for SF Express, it is e-commerce parts that have a greater impact. On the one hand, the price competition of e-commerce parts is the most intense; on the other hand, SF’s e-commerce parts business is not as advantageous as the time-effective parts business. The above is a new recruit, Fengwang is also slowly spreading, income restrictions increase, this area will have a greater impact on its subsequent performance.

As for express, intra-city and other new businesses, although they are growing very fast, they do not have very large ups and downs like the time-sensitive parts business. These new businesses are still in the investment stage.

In short, the performance of SF Express last year was so good that it caused the capital and retail investors to be too high. Now that the adjustments are made, everyone is too sensitive. So, when the agencies start to flee, it shows that there is a problem.