Reporter | Li Huilin Editor| Xia Chong
After SF Holdings, SF Real Estate Trust and Kerry Logistics, Wang Wei won the fourth listed company.
On December 14, SF Tongcheng was listed on the Hong Kong Stock Exchange at an issue price of HK$16.42 per share, with a market capitalization of approximately HK$13.9 billion (approximately RMB11.342 billion) as of the close of trading on the same day.
SF Tongcheng mainly provides same-city express delivery services, originally a business unit within SF Group, which began to operate independently in 2019, with a total of 126 million registered users so far. In September this year, it invited "Asian Flying Man" Su Bingtian to become the first brand spokesperson.
Wang Wei is the actual controller of SF Tongcheng, holding 64.54% of the shares after the IPO. According to the Forbes Real-Time Rich List, Wang Wei's current wealth value is 28.4 billion US dollars (about 180.7 billion yuan)
As SF tongcheng entered the capital market, Wang Wei's logistics "empire" continued to expand.
01
Send a single loss of 1 piece
When SF was born in the same city, the development of local life O2O platforms such as takeaway was in full swing, driving the instant delivery industry to stand on the outlet, Dada (under Jingdong), flash delivery was established, meituan special delivery, hummingbird special delivery (hungry mo) did a good job.
Latecomer SF tongcheng backed by SF Group, the performance has been climbing all the way.
"The revenue in the first year is more than 50 million yuan, the second year is more than 300 million, and the third year is more than 1 billion." Sun Haijin, CEO of SF Tongcheng, said that the business model of instant delivery meets people's needs for emergency rescue or enjoyment, "Since people need emergency and enjoyment, they are willing to pay, which is the difference between the user habits of instant delivery and express delivery." ”
SF Tongcheng's business scope radiates local catering, same-city retail, near-field e-commerce, personal errands to help buy, etc.
With the emergence of the epidemic in 2020 and the explosive growth of local life O2O demand, SF Tongcheng entered the fast lane, with orders reaching 761 million in that year, and revenue increasing to 4.843 billion yuan, doubling year-on-year. In 2021, the development of SF Tongcheng further accelerated, with revenue of 3.046 billion yuan and order volume of 1.070 billion in the first five months.
High performance growth comes at the expense of profits. In 2018, 2019 and 2020, SF Tongcheng lost 328 million yuan, 470 million yuan and 758 million yuan respectively. In terms of order volume in 2020, the average single delivery will lose 1 yuan, mainly dragged down by high performance costs.
At present, SF Tongcheng has more than 2.8 million registered riders, and the cost of outsourcing and employee welfare for riders and related labor services is the largest cost of SF Tongcheng. In 2020, the related expenditure reached 4.921 billion yuan, accounting for 97.8% of the operating costs.
Based on the improvement of operational efficiency based on network effects and scale effects, the cost of fulfillment per order in SF Tongcheng has decreased, from 15 yuan to 5.9 yuan from 2018 to May 2021. However, the corresponding single ticket revenue is also declining, from 12.44 yuan to 2.85 yuan, still unable to make ends meet.
Express logistics expert Zhao Xiaomin told reporters that in the field of distribution in the same city, the most important thing is the scale effect, to get more orders, improve the scale of income, you need a large number of riders, rider costs remain high is a common disease in the industry.
Subject to high labor costs, losses are the norm in the industry. Referring to Dada, which landed on the US stock market last year and backed by JD.com, it lost nearly 2 billion yuan in the first three quarters of 2021.
The capital market is also pessimistic about SF Tongcheng. It broke at the opening of the first day of listing and ended at HK$14.9 per share, down more than 9%.
02
Challenge the US group, hungry?
Compared with meituan special delivery, Dada and other merchants and users who mainly serve related platforms, SF Tongcheng is positioned as a "third-party instant delivery service platform", undertaking orders with non-related systems, similar to brands such as UU running errands and flash delivery.
In terms of service model, SF and the city owner B2C, including two aspects: one is to provide same-city delivery services for merchants and consumers, and the other is to open up last-mile delivery for logistics service providers.
As of May 2021, SF Tongcheng serves more than 2,000 brand customers and more than 530,000 registered merchants, including catering brands such as Heytea, McDonald's, and Lao Niang's Uncle, as well as merchants such as Tianhong and Heilan Home.
The prospectus quoted iResearch data as saying that as of the end of March 2021, SF Tongcheng accounted for 10.9% of the market share in terms of order volume, ranking first among third-party platforms. The fact is that this achievement depends on the strong support of SF Holdings behind it.
SF Tongcheng is not as "independent" as it claims. From 2018 to May 2021, the contribution of service revenue from SF Holdings to performance gradually increased, from 2.9% to 38.6%, and the proportion of revenue from third parties decreased from 97.1% to 61.3%.
According to iResearch, the scale of industry orders will grow to 79.5 billion in 2025, with a compound growth rate of 30.5%. Zhao Xiaomin told reporters that the maturity of the market is expected to take 3-5 years, and the priority of the head enterprise is to occupy a larger market share and achieve scale effects during this period.
Looking at the entire instant delivery track in the same city, SF Tongcheng may be difficult to challenge the status of meituan and hungry. At present, the core demand of the instant delivery industry is still related to catering takeaway, and Meituan delivery and hummingbird are the duopoly of the ready-to-match industry, occupying half of the country.
According to the prospectus, the order volume of the instant delivery industry is expected to reach 29.2 billion in 2021, and according to a rough estimate of the average daily single, SF Tongcheng accounts for about 4.3% of the market share.
Compared with meituan distribution, Dada and other competitors who can obtain stable commercial traffic of Meituan and JD.com, SF Tongcheng does not have an advantage in order acquisition. At an investor exchange meeting, Wang Wei once said that he would not get involved in retail businesses such as community group buying, and "resolutely do not touch the business flow, because we are an independent third party." ”
Logistics expert Yang Daqing told reporters that unlike express delivery, which is a standardized service, instant delivery in the same city is a point-to-point, no warehousing and no transit service, and the most critical thing is to combine with the business flow. At present, in addition to the industry's high-frequency just-needed services such as takeaways, which can bring steady cash flow, it is difficult for other categories to win the scale effect.
SF Tongcheng plans to invest more resources in the incremental market in the future, namely same-city retail, near-field e-commerce, and near-field services, and in the first five months of 2021, the order volume in the above three areas increased by 272.4%, 143.1% and 223.2% respectively. At the same time, SF Tongcheng also hopes to expand its business territory and achieve service coverage in 1400 cities.
SF Tongcheng is ready for long-term losses, and said in the prospectus that the company's loss status may continue for 3 to 5 years, and the loss in 2021 will be further expanded.
"It is necessary to further expand the geographical coverage of services, and these cities are difficult to achieve scale effects and weak profitability in the short term." This is explained in the prospectus.
Source: China Post Express Weibo