Wang Wei's 4th IPO, a bit not "downwind"

Image source @ Visual China

Text | The author is | Shi Huifang, and the editor | Xu Minghui

Not long ago, the 2021 Hurun Rich List was released.

"Nature's porter" Zhong Suishan, with a net worth of 390 billion yuan, raised himself to the throne of "China's richest man"; Wang Zong, who said that "SF is unhappy", fell to 10th this time, compared with last year, lost 6 places.

For Wang Wei, wealth may be just a string of numbers, and ranking is just a trick to sit in a row. Once upon a time, Wang Wei vowed that SF could not go public for money.

But it is such a person who avoids capital, and this year he has sent 2 companies to the capital stage in one go. It also acquired a large international logistics company that has been listed.

On December 14, SF Tongcheng (9699. HK) went public on the Hong Kong Stock Exchange and became the successor to SF Holdings (002352. SZ), SF Fangtor (2191. HK), Kerry Logistics (0636. HK), the fourth listed company that Wang Wei sits on.

Although it was titled "the first share of third-party instant delivery", on the first day of listing, SF Tongcheng was not smooth, and the stock price once fell below the issue price of more than 10%. Up to now, SF Tongcheng has been green for two consecutive trading days.

On the one hand, investors in the secondary market are not optimistic, and on the other hand, there is a small market share left in the field of instant delivery (Meituan Distribution, Ali Ele.me, jd.com account for more than 75%). In the face of heavy pressure, Can Wang Wei, who has obtained capital "blood transfusion", take SF to the same city to catch a "hitchhiker"?

01

SF is not happy, Su Bingtian has the most say.

As the most beautiful boy in this year's sports world, Su Bingtian set a new Asian record with 9.83 seconds in the men's 100m semifinals of the Tokyo Olympic Games, and was nicknamed "Asian Trapeze".

Like other sports stars, Su Bingtian's popular descendants also flocked to China Merchants Bank, Xiaomi, Seven Wolves, Jianlibao... Of course, it also includes SF city.

Brand and spokespersons have always paid attention to the degree of compatibility. Obviously, express delivery and sprinting can rub out sparks, and both pay attention to "only fast and not broken".

Compared with other "seed runners" on the instant delivery track, SF did not start early in the same city, but it was one of the fastest runners.

Around 2014, Flash Anda was established. The following year, Meituan delivery and hummingbird special delivery.

In 2016, with the heating up of the new retail concept, same-city distribution ushered in an explosive period. In the same year, home express delivery jointly launched "instant matching"; the postal service launched the "city-wide" limited-time special delivery; Yuantong launched the "lightning action"; rookie wrapping announced the opening of same-city distribution in Beijing...

Also in this year, SF set up the same city express delivery business department and began to incubate the instant delivery project.

A year later, the "SF Special Delivery" was launched, and Wang Wei broadened the business scope to the outside of the fifth ring road, and some second-tier cities and some sinking markets were also on the list of SF Special Delivery. In June 2018, SF Special Delivery began to launch C-end business to consumers, followed by March 2019, the "SF Same City Express" brand officially operated independently.

As a same-city express delivery brand incubated by SF, SF Tongcheng is also quite cared for by "Daddy".

Because of the support of SF's "last mile" same-city express delivery and delivery business, from 2018 to 2020, SF's order volume in the same city increased from 0.8 billion to 760 million, with an annual compound growth rate of more than 200%.

Coupled with the overall industry boom of new retail, SF Tongcheng's revenue has grown rapidly in recent years. From 2018 to 2020, SF's revenue in the same city was 990 million yuan, 2.1 billion yuan and 4.8 billion yuan, respectively. In the first five months of this year, its revenue exceeded 3 billion yuan, an increase of 113% year-on-year.

From the current point of view, SF's same-city business has covered four major scenarios: local catering, same-city retail, near-field e-commerce and near-field services.

Specifically, local catering mainly includes meals and drinks; same-city retail mainly involves daily consumer goods such as fresh food, medicine, and desserts; near-field e-commerce is mainly based on categories with high e-commerce penetration rates such as shoes and bags, beauty, and digital 3C; near-field services provide services such as item pickup, purchase, assistant, and queue-up.

According to the prospectus, as of the end of May this year, SF's same-city business has covered 1,000 cities, with 530,000 registered merchants and 126 million registered users, which is 25 times more than Su Bingtian's Weibo fans.

02

Although SF ran out of the "general feeling of flying" in the same city, compared with its own spokesperson, the "gold content" is far behind.

In 2012, Wang Wei vowed: "Listing is nothing more than encircling money and obtaining funds for enterprise development." SF is also short of money, but SF cannot go public for money, nor will it go public for the sake of listing. ”

Who wouldn't, punching the face would be ugly.

Seeing that competitors have gone to the capital market to make money, SF can't sit still. In 2017, SF listed A-shares through the backdoor Dingtai New Materials, with a market value of 43.3 billion yuan.

"How can a person, an enterprise, confront capital and industry?" Good lai let Boss Wang say it.

Since the beginning of this year, Boss Wang has been operating like a tiger, first promoting the listing of SF RealTory on the Hong Kong Stock Exchange in May, and then completing the acquisition of Kerry Logistics, a Hong Kong-listed company, through a wholly-owned subsidiary in October; in December, SF Tongcheng went to the Hong Kong Stock Exchange to knock the gong.

Think of the original "listing is nothing more than a circle of money" rhetoric, so... Boss Wang is going to circle the money?

A fact is that even if the back of SF, the order volume and revenue have doubled, SF city has still failed to achieve profitability.

From 2018 to 2020, SF Tongcheng lost 328 million yuan, 470 million yuan and 758 million yuan respectively, and the loss continued to expand. In the first five months of this year, SF Tongcheng's net loss reached 353 million yuan, an increase of 64% year-on-year.

One of the reasons for the continued losses is related to high labor costs, including labor outsourcing costs and employee benefit expenses related to hiring riders.

It is understood that as of the end of May this year, SF has registered 2.8 million riders in the same city. From 2018 to 2020, its manpower outsourcing costs and employee welfare expenses were 1.198 billion yuan, 2.377 billion yuan and 4.921 billion yuan respectively.

Labor costs accounted for more than 97% of operating costs for three consecutive years.

This is also a common phenomenon in the express delivery industry. Take Dada, which has been deeply involved in the field of distribution in the same city for many years, it has also failed to solve the problem of profitability. In the first three quarters of this year, Dada Group had a net loss of 1.893 billion yuan, and rider remuneration and incentive costs remained high.

"In the field of same-city distribution, the most important thing is the scale effect, including market size, order volume, revenue scale, and solution capabilities." One professional pointed out that to deliver more orders, you need a large number of riders.

Same-city distribution is essentially a labor-intensive industry, and the high cost of riders has also become a common problem in this industry.

03

"Be the first in the industry!" At the 2019 SF Tongcheng Independent Operation Brand Conference, CEO Sun Haijin made a flag.

However, two years have passed, and SF Tongcheng has not become the preferred service provider for local life instant logistics. Its competitors Meituan Distribution and Hummingbird account for more than 60% of the market.

According to the rough calculation of the daily average single of SF Tongcheng in the first five months of 2021, its market share is only 4.3%.

Compared with meituan special delivery and hummingbird special delivery to start with catering takeaway, Dada has a good strength in retail FMCG, and the biggest advantage of SF City may be its positioning as a third-party logistics service provider.

As a third-party platform, offline supermarkets, community e-commerce and other business flow service platforms that lack transportation capacity are more willing to hand over orders to SF Tongcheng for distribution, thereby reducing dependence on centralized platforms.

However, there is no stable source of orders, which also leads to a relatively large fluctuation in the order volume of SF in the same city.

Moreover, with the development of new retail and new consumption, the field of instant delivery in the same city is like a red sea.

In July 2018, Meituan launched the "Meituan Flash Sale", with the help of the Delivery Network of Meituan Takeaway, developed offline new retail business, focusing on instant delivery outside of non-catering; in May 2019, the "Meituan Delivery" brand was launched, opening the distribution platform to the outside world and sharing distribution capacity.

In June 2019, Hummingbird, the instant logistics platform of Ele.me, became independent, and the distribution service expanded to more industries and fields. In March 2020, Alibaba wholly acquired "Point I Da" and also began to provide same-city delivery services.

The flash delivery of the C-end and the UU running errands are currently in the limelight. Flash Delivery completed a financing of $125 million in March this year, UU Running Errands mainly focuses on new first-tier and second- and third-tier cities, and has completed 5 rounds of financing...

This is a monk more meat less track, in order to compete for market share, it is inevitable to continue to burn money.

From the perspective of hair volume, Boss Wang, who is still losing money, does not seem to be anxious, but judging from the speech on the day of SF Tongcheng's listing, Boss Wang may not be as Buddhist as before: "I will not only hope for the team, I will also participate in it and work together with the team." ”

Investors are temporarily unwilling to pay for Boss Wang's career, it doesn't matter, eat well, forget about today, maybe tomorrow open, someone will pay?