This article is from the WeChat public account: Deep Capital (ID: deep_insights) , author: Wang Cai Bao, formerly titled “network paralysis? Violent sorting? Detailed explanation of Best Express’s financial report: Is the strategy of trading the market at a low price really good? 》, Title picture: original picture
When SF’s annual revenue exceeded 100 billion yuan and JD Logistics received the thanks from Zhong Nanshan, Best Express became the focus of public opinion with a negative attitude.
At the end of February this year, a video of a complete paralysis of express delivery outlets appeared on the Internet. According to the video, the outlet has been empty, and tens of thousands of packages have not been delivered or left unattended. Many customers can only find their own packages in the express delivery.
According to public information, the express delivery network in the video is a franchise point of Best Express in Changchun, and this is also the first domestic delivery company’s terminal distribution outlet to have a thunderstorm since the outbreak. After the above major operational accidents, Best Express has not yet given an official response to the outside world.
The “Huang Tanzi” express delivery outlets have always been a major taboo for the express delivery company’s operation based on franchising, which indicates that the express delivery company has poor control over its own network and cannot grasp the actual operation of its terminal outlets.
This is not the first time Best Express has been pushed to the forefront this year. Just on January 7, a video of violent sorting by Best Express’s Shandong franchise site appeared on Weibo. This is only two days away from Best Group Chairman and CEO Zhou Shaoning at the company’s network conference that Best Group will focus more on “operational quality and service experience” in 2020.
Netizens broke the news that a certain outlet of Best Express in Changchun was paralyzed, letting users find pieces by themselves
Under such a bad start, Best Group announced its 2019 fourth quarter and full-year results report on March 12.
The report shows that Best Group achieved operating income of RMB 10.77 billion in the fourth quarter of 2019, a year-on-year increase of 19.2%; under non-general standards, (Non-GAAP) The net profit was 61.019 million yuan, an increase of 203.5% year-on-year, and the net profit margin was 0.6%. For the full year of 2019, the company achieved total operating income of 35.18 billion yuan, an increase of 25.8% year-on-year; a non-GAAP net loss of 124 million yuan, a loss rate of 0.4%.
The “missing position” of the company’s operations does not seem to have much negative impact on performance.
Best Group’s financial report: trade the market at a low price
As the only listed logistics company that is still losing money throughout the year, Best Group has given a good answer with rapid growth in the fourth quarter of 2019, which seems to indicate that the company is Gradually get out of the trouble of long-term losses.
Best Group achieved operating revenue of RMB 35.18 billion in 2019, a year-on-year increase of 25.8%. Among them, Best Express business is still the most important source of revenue, with annual revenue of 21.81 billion yuan, accounting for 62% of total revenue, an increase of 23.2% year-on-year.
The company’s courier business revenue increased significantly year-on-year, mainly due to the substantial increase in the number of tickets for the company in 2019. Best Express completed a total of 7.58 billion express delivery in 2019, an increase of 39% year-on-year; the company’s market share also increased by 1.1 percentage points compared to the previous year, reaching 11.9%.
Although the company’s market share is increasing, it can be seen that the growth rate of the number of tickets for Best Express business is much higher than the year-on-year growth rate of revenue, which is mainly due to the decrease in revenue of Best Express.
周绍宁
In order to enter the express delivery industry faster, Best Logistics acquired Huitong Express in 2010, and then changed its name to “Best Huitong”, which is what we are familiar with today. Entering 2016, “Best Huitong”, as a courier sub-brand of Best Group, was renamed as Best Express.
Since the birth of Best Logistics, it has a strong Ali lineage. After the company was established in 2008, it received an angel round investment of 15 million yuan from Alibaba. In the subsequent rounds of financing, the Alibaba Group can also be seen.
As of now, Alibaba has more than 23% of Best Group’s shares, is the company’s largest shareholder, and exceeds the founder Zhou Shaoning’s 13% equity.
Best Logistics, as an important member of Ali’s rookie network, is the earliest pawn in the logistics field of Ali. However, as the “pro-son” in Ali’s logistics system, (Ali angel round investment in Best, other access systems are all late-stage shares) , Best Logistics always gives peopleOn the wall. “
From the perspective of market capitalization, apart from SF, which does not stand in line, and JD Logistics, which has grown to serve the e-commerce business, among the access companies in the Guangcai Network, Best Logistics is the company with the smallest market value.
The market value of A-share listed Yunda is more than 60 billion yuan, and the market value of Shentong and Yuantong is about 30 billion yuan. The market value of Zhongtong, which is also listed on US stocks, is more than 20 billion dollars. label = “Remarks”> (about 140 billion yuan) , and the current market value of Best Group is only less than 2 billion U.S. dollars 
As a logistics company with express delivery as its core business, the core strategy that Best Group has long adhered to is to focus on technology investment, and to be an asset-light logistics company, to solve the traditional express industry efficiency through continuous technology output. Low issues and ultimately profitability. This is a standard Internet company play, and this is consistent with Zhou Shaoning’s background of Internet companies for many years.
However, this set of methodologies for Internet companies to solve problems does not seem to be effectively applied to the logistics company of Best, and this is also reflected in the company’s financial data.
Currently in the domestic express delivery industry, in addition to SF and JD Logistics’ main focus on high quality and high prices, including Shitong Yida and other small and medium express companies are still in the low-price market. The declining ticket revenue of Best Express also shows that the company has to join the price war in order to compete for market share.
The decline in ticket revenue will largely squeeze the companyCost and expenses, which means that Best Express has to save the overall cost and expenses by choosing a lower cost transportation method, etc.-reflected in the user experience, it will be slower and not delivered Comes to the door, packing is rotten, etc. The decrease in user experience is also contrary to the company’s technical output that increases the efficiency of express delivery.
In addition, Best Express adopts an asset-light franchise model. Even on core assets such as transfer centers, Best still uses the leased site plus simple transformation model, which makes it difficult for Best Express to transfer quickly. Up.
Adopting an asset-light model has a positive effect on the company’s expansion and rapid market seizure (The assets do not need to be built by themselves, saving time and resources) At the same time, it will reduce the pressure on the company on the cost side.
But the asset-light operation model also requires the company to have a strong operation and ability to control assets, and the logistics industry is relatively difficult to achieve “point-to-point, end-to-end” due to the many and complex transfer links. Controlled industries, coupled with fleets, transshipment centers, and end-of-line collections are not self-operated, which has led to Best Express being nailed to the stigma of the “poor service and slow speed” express delivery industry . It is not difficult to understand the situation of the sites “yellow stalls” and “profiteering sorting” as seen in the opening chapter.
Although in recent quarters, Best Group has continued to improve its profitability, the increase in its profitability has come from businesses such as express, supply chain and Best Store Plus, and its core express delivery business is profitable. There is not much improvement in sex.
At the same time, it is worth noting that, including supply chain and Best Store Plus business, there has been basically no growth in 2019 compared with the same period of last year. Although Best Express business has grown rapidly, the overall market size is smaller than that of the express delivery business. Turning around losses and future growth are entirely pinned on non-core businesses, and there are still significant risks.
This article is from the WeChat public account: Deep Insight (ID: deep_insights) , Author: Cai Bao Wang