The revenue was 3.702 billion yuan, the gross profit was 167 million yuan, and the adjusted net profit was 5.513 million yuan. US) has achieved positive results in 2023 with a number of data such as annual net profit, but it still has not escaped the curse of "high revenue and low profit", which is also an important factor that has been criticized.
After the release of the financial report on April 17, the market affirmed the performance of Quhuo in achieving a number of key financial indicators, and the company's stock price closed up 8.29% on the same day, but it still could not stop its stock price downward trend. In fact, Quhuo's share price has fallen 58.5% year-to-date and has fallen below $1.
But from a business perspective, Quhuo's performance is not without its bright spots. Especially in 2023, after the company set foot in the domestic second-hand car parallel export business, within 7 months, through 30 million yuan of working capital, to achieve 154 million yuan of business revenue. However, with the increasing global popularity of domestic new energy vehicles, the competition in the domestic parallel export market is also becoming increasingly fierce, and it is still unknown whether the business can support the valuation of Quhuo in the future.
Profit by cutting costs?
According to Zhitong Financial APP, Quhuo's current main business includes localized life services such as takeaway delivery, travel services, cleaning and accommodation.
From the perspective of revenue structure, Quhuo's revenue mainly comes from three major business segments, namely platform fulfillment solutions, travel solutions and cleaning and accommodation solutions. Among them, platform fulfillment solutions and mobility solutions still account for most of its revenue.
Compared with 2021, Quhuo's total revenue in 2023 has fallen by 8% to 3.702 billion yuan, but the company still achieves a positive annual net profit in 2023, and the key lies in Quhuo's "cost control".
In fact, in order to obtain greater profits as a middleman, Quhuo can only focus on downstream workers and upstream platforms in addition to improving operational efficiency. However, in this game, compared with downstream workers, the platform undoubtedly has a greater right to speak and bargain.
In Quhuo's core business of takeaway delivery, the company's role is to be the "contractor" of the takeaway platform, undertaking the salary and personnel management expenses of the asset-light takeaway platform. As a result of this business model, Quhuo's cost of revenue has become the biggest bottleneck restricting the improvement of its gross profit margin.
Judging from the financial report, from 2021 to 2023, the proportion of the cost of Quhuo's remuneration to workers has decreased from 85.8% to 81.8%, and the cost amount has also decreased from 3.453 billion yuan to 3.029 billion yuan, a decrease of 424 million yuan, while the company's total revenue cost decreased by 314 million yuan in the same period. In other words, the main reason why Quhuo has been able to achieve cost control is to optimize the costs related to labor wages and personnel management.
Although the control of the cost side is the main reason for Quhuo's profitability, it is not the whole factor. On the expense side, in 2023, Quhuo marketing expenses will decrease by 13.7% year-on-year to RMB184 million, achieving two consecutive years of decline.
It can be seen that the main way for Quhuo to achieve positive profitability is to control the cost of itself and downstream workers, but for upstream platforms, Quhuo's voice is obviously weak. Generally speaking, the ability to collect accounts determines the right to speak. According to the financial report, in 2023, the company's accounts receivable will reach 482 million yuan, accounting for 13% of the total revenue in the current period. Under the chain reaction, the company's current net cash outflow from operating activities is 97.282 million yuan, much higher than the company's current net profit.
Parallel exits hold up a piece of sky?
In the 2023 financial report, Quhuo focused on the company's international business, that is, the second-hand car export business. According to the financial report, in just 7 months, the business contributed 154 million yuan in annual revenue through 30 million working capital investment, accounting for 66.1% of the revenue of travel service solutions, and promoted the annual revenue of travel services to increase by 116.4% year-on-year.
On the one hand, it reflects the rapid progress of Quhuo's second-hand car export business, and on the other hand, it also reflects the current popularity of domestic new energy vehicles in the global market.
From the perspective of the market, data from the China Automobile Dealers Association shows that in recent years, the export growth rate of China's used cars has been significantly higher than that of new cars. In 2021, China exported only about 15,000 used cars, and in 2022, it soared to nearly 70,000 units, a year-on-year increase of 356%. The industry expects that China's second-hand car exports are expected to reach 400,000 units by 2025.
In addition, according to the China Automobile Dealers Association, the export of new energy passenger vehicles accounts for more than 80% of the second-hand car exports. This is the so-called "parallel export car", that is, to export new domestic new energy vehicles to foreign countries in the form of second-hand cars. Due to the high configuration and low price of domestic new energy vehicles, it has certain advantages in the international market, so many second-hand car export enterprises regard "parallel export" new energy vehicles as the main direction, and Quhuo is one of them.
But this type of business has its inherent pain points. According to Zhitong Financial APP, the current mainland second-hand car export traders are facing unstable overseas orders; Customers don't know about Chinese brands and are worried about product quality and after-sales service; information asymmetry between overseas procurement and domestic supply; The cost of international logistics for small-scale exports is too high; The need for self-built overseas warehouses requires large investment, and how to expand overseas markets are restricting the development of parallel export business.
In order to solve the above pain points, Quhuo will launch Carnuxt, a second-hand car export trading platform with a "full custody model" this year. Its service model is similar to Carvana, a well-known listed second-hand car trading platform in the United States, which can solve the problems of second-hand car product quality, sales channels and after-sales service in one stop by integrating functions such as quality certification, protection services and insurance claims.
The launch of Carnuxt was interpreted by the market as Quhuo's intention to cultivate it into a platform business that supports the company's valuation. Because in the U.S. stock market, this kind of second-hand car service model has been recognized by the secondary market. Taking the above-mentioned Carvana as an example, since its listing in 2017, Carvana's market capitalization has reached a maximum of $76.12 billion, and although its stock price has declined sharply in 2022, it still has a market capitalization of $14.426 billion, with a PE (TTM) of 32.06 times.
However, from the perspective of market competition and substitution on the same track, the reason why Carvana can be recognized by the secondary market is that it has subverted the traditional used car trading model in the US market with its convenient online car purchase experience, contactless service, transparent pricing strategy, vehicle quality assurance and technical support, which is why Carvana's market value has surpassed that of Carmax, a veteran used car supplier in the United States, only 4 years after its listing.
But in fact, the market situation faced by Quhuo in the used car market is not the same as that faced by Carvana. At present, the majority of the industry believes that models that arrive overseas through parallel exports cannot achieve the same high degree of localization as official export vehicles, and even it is difficult to meet local regulations. In addition, for car companies, parallel imports will also interfere with their normal overseas plans, especially affecting their overseas pricing and brand value.
In addition, as the domestic second-hand car export business gradually turned red from the blue ocean, the export traders engaged in this business also ushered in involution, and profits declined. In this context, whether the used car business can become the pillar of Quhuo's future depends on whether it can successfully gain a foothold in this volatile market. In addition, from the perspective of the market size of parallel exports, Quhuo still has a long way to go if it wants the second-hand car business to reach the scale of its platform fulfillment service business.