In August 2023, the Full Gang handed over a brilliant performance, causing a carnival. As everyone knows, the cash-out plan prepared by the senior management team of the Full Gang soon surfaced, and the leader was Zhang Hui, the founder of the Full Truck.
Zhang Hui and three other executives will cash out more than 630 million yuan in the second half of 2023, and Zhang Hui's cash amount alone is as high as 510 million. The action of the four people in two batches seems to be a good way to avoid the reaction of the majority of small and medium-sized shareholders from being too violent, but in fact, it is not.
The $500 million share repurchase program implemented since March 2023 has not yet achieved half of the target, and the cash amount has reached nearly half of the repurchase amount, and some small and medium-sized shareholders are dissatisfied with the investor relations team and the CFO to ask for explanations.
This can't help but make people wonder why the founders of the Full Gang cashed out and did not buy back the shares.
On the other hand, after the IPO plan of Cargo Lala to the United States failed, it sprinted to the Hong Kong stock IPO three times, and is still waiting for an answer.
There is not much difference between the operation mode of cargo lala and full gang, the focus is that the core business scenarios are different, one is intra-city freight, and the other is intercity logistics. The two sides have always occupied one side of the business map, and although the two have competition, more often than not, the well water does not interfere with the river water.
It was not until 2020 that the Full Gang acquired the "provincial and provincial return car" of the city's freight products and directly entered the hinterland of Lala, and the two sides met head-on. In the following years, the two sides also penetrated each other in LTL, cold chain and other businesses.
What are the principles behind these two completely different decisions?
The same is to seek new market increments, whether these businesses have met expectations, and will the capital market continue to pay for them?
Can Lala support a $13 billion valuation?
"The valuation is $13 billion, which is on the expensive side. ”
A number of investors in the primary and secondary markets said that the valuation of the listing of Lala is worth up to 10 billion US dollars, about 15~18 times the price-earnings ratio, and the post-investment valuation of 13 billion US dollars in 2022 is too expensive. There are no more than two choices, either to suspend the listing or to bleed the listing.
It is an indisputable fact that in the past two to three years, the valuation of investment targets in the primary market has generally been overvalued, and now the bustle of the entire freight track no longer exists.
The first share of freight in the same city, Kuaigou Taxi (formerly 58 Express), fell into a "penny stock". In the first four years of the IPO, Kuaigou Dache had a cumulative loss of 2.786 billion yuan, and the listing valuation was at a high premium, reaching nearly 3 billion US dollars, but it could not avoid falling from the issue price of 21.5 Hong Kong dollars to less than 1 Hong Kong dollars.
Before 2017, Kuaigou Taxi had always been the target of cargo lala. Kuaigou Dache's initial competitor was Blue Rhinoceros, and at that time, Lala only got the first $10 million in financing, followed by subsidies, but it only lasted for about a month before stopping. Soon, after getting the new financing, Lala was heavily subsidized and marketed. At that time, the internal factional struggle of Kuaigou Dache was serious, and the market situation was misjudged. During the peak period of subsidies, the subsidy for cargo owners and drivers was not less than 100 million yuan per month, and this kind of large-scale investment also made it catch up with Kuaigou Taxi with an absolute advantage at the end of 2019.
The listing of Kuaigou Dache was too hasty, and after the listing, it lacked growth and new profit points. Major shareholders reduced their holdings, founders resigned, and stock prices plunged, and Kuaigou Taxi seemed to have entered the darkest moment.
Nowadays, when it comes to Kuaigou Taxi, the attitude of investors in the secondary market is generally cold. A secondary market investor bluntly said that Kuaigou Taxi has not grown over the years, and the plate is so small that it is impossible to read, and almost no one will pay attention to Kuaigou Taxi now.
Back in 2021, the company originally planned to list in the United States, but due to the impact of cybersecurity review, this plan was forced to abort and instead sought to list in Hong Kong.
In February 2022, Huolala completed its last round of financing of US$230 million before the IPO, with a post-investment valuation of about US$13 billion.
There is a huge reason for this, at that time, the full gang went public to get a market value of 23.4 billion US dollars, about 80 times the price-to-sales ratio PS, the capital market is very optimistic about the trillion-level freight track, and has high expectations for cargo lala.
However, after the submission of the prospectus in March 2023, there has been no new progress, and the reasons behind it involve the market environment, the company's performance, regulatory policies, etc. For example, Lala has been named many times by local transportation departments and regulatory authorities, all of which are related to the issue of commissions and membership fees.
As the No. 1 digital freight stock, the situation of the Full Gang does not seem to be good, and the market value has fallen by nearly two-thirds.
In other words, although Lala enjoys a head premium, there is still a question mark over whether it can support a valuation of $13 billion.
The fact that Lala has submitted the form three times shows that its determination to IPO is very firm and there is no sign of suspending the listing. The question is, if Lala wants to go public with bloodshed, how can he explain to the shareholders of the last round of financing before the IPO? Can they accept it?
Or because of this, the cargo lala moved to the rescue, so that the old shareholders stood on the platform.
In 2023, a senior executive of Hillhouse Capital will join Huolala and be responsible for the sales of an innovative business of Huolala, with the rank of vice president, after GM level in investment institutions. Looking at Hillhouse Capital's 9.67% stake, it is the largest institutional investor before the IPO of Cargo Lala, which can be said to be both a contribution and a contribution.
In the case of a bad capital market environment, Hillhouse Capital's endorsement of the goods is equivalent to a strong reassurance to the primary market.
Zuo Lin Youli Channel investigated and found that Zhou Shengfu, the founder of Cargo Lala, has a good reputation in the primary market. Hong Kong college entrance examination champion, gambler, Stanford top student, Texas Hold'em professional player...... The labels are legendary, often talked about in the primary market.
Zhou Shengfu, 45 years old this year, was born in Jieyang, Chaoshan, and moved to Hong Kong at the age of 3. He is a top student at Stanford University and Hong Kong Chinese University, and after graduation, he joined Bain & Company, and after working as a consultant for 3 years with an annual salary of one million, he started a 7-year career as a professional poker player, which also accumulated 30 million Hong Kong dollars in entrepreneurial capital for his future business. In 2013, he founded Lala, which he called "the biggest bet of my life".
And how big is the return of this bet, it is not enough to have a shareholder platform, and Lala still needs to let capital see more new value and imagination space of the platform. For more insider information, readers are welcome to add Zuo Lin Right Fox Community Administrator WeChat (aqingcjx) to communicate with us to break the news, and note that the company/position is passed faster.
The Full Gang chose to go to sea in the face of a crisis, but it ended before it started?
In 2017, the Full Gang was merged by Yunman and the Truck Gang, and naturally had the market size of the monopoly industry, but it seems that it was from this moment that the problems of the management plagued the Full Gang for many years.
At the beginning of the merger of the two companies, there were more than 30 investors behind them, and it is not an exaggeration to say that there are many shareholders and a complex management structure.
The most obvious thing is that Wang Gang (the first CEO of the Full Gang), Luo Peng (CEO of the Truck Gang), and Zhang Hui (CEO of the Full Gang) were the "troika" of the Full Gang, and their management concepts are very different. For this reason, Ma Huateng personally inquired about the merger of the two companies.
It is rumored that it took Zhang Hui a few months to find all the investors and advocated that the management structure at that time must be changed, and Sequoia Capital and SoftBank were the first to stand up and support. A year after the merger, Zhang Hui became the new CEO of Manbang, which is enough to see that he had a high degree of trust among investors in the primary market at that time.
Zhang Hui has extensive experience at Alibaba, where he was a member of the "China Supply Iron Army", responsible for B2B project sales, and was also the youngest general manager of Alibaba in Guangdong. In Alibaba's growth history, the B2B sales team is well-known and is known as the "Iron Army of China".
All this has changed a lot after the listing of the Full Gang, and Zhang Hui has to face more pressure from the capital market.
Speaking of the full gang, Yang Ming, an investor in the secondary market, revealed helplessness in his eyes, complained about Zhang Hui, and whispered "It was a sad past".
He recalls that expectations have been high since he confidently bought the shares of Full Gang in 2022, yet the returns have been almost negligible after holding the position for more than a year.
Among Yang Ming's peers, many investors also bought the shares of the Full Bang, but also failed to achieve the expected returns, and the shares of the Full Bang fell from the issue price of $19 to the range of $6~8.
Full Bang, a company that was once favored by capital, has performance in line with expectations, so why is the stock price retrograde?
In 2022, Full Truck achieved a turnaround for the first time, and its net profit tripled compared to 2021. In contrast, in 2020 and 2021, the net profit loss of the Manbang exceeded 3 billion yuan.
This increase caused huge controversy, and once plunged the Full Gang into the whirlpool of public opinion that "profits rely on government tax rebates, and the authenticity of financial data is questioned by short-selling institutions", and the outside world has doubts about whether the company has sustainable profitability.
However, the performance of the Full Gang in the first half of 2023 dispelled the market's suspicions, and many investment institutions and secondary market investors were more convinced that the business model of the Full Gang was healthy and increased their holdings in the Full Truck.
Unexpectedly, a week after the release of the financial report, Zhang Hui, the founder of the Full Truck, cashed out 510 million yuan at one time, which directly caused the stock of the Full Truck to fall by nearly 11% in August of the same year.
This unfavorable situation soon made Zhang Hui unable to sit still, and he had to personally come forward to appease the emotions of shareholders, emphasizing that he would give back to shareholders through repurchases.
History played out again at the end of November 2023, shortly after the release of the third quarter earnings report of the Full Bang, and the two executives cashed out one after another. After the Q4 results of 2023 came out, the full gang share repurchase plan was not completed as scheduled, and there was no notice in advance whether it would be postponed, which aggravated the seriousness of the situation.
Investors were extremely indignant and puzzled by Mr. Zhang's decision. Some investors in the secondary market could not accept this operation of the senior management of the Full Gang and chose to liquidate their positions.
After a fiscal year, Zhang Hui seems to have fallen into a "crisis of confidence" in the secondary market. In the eyes of many investors in the secondary market, the Full Gang is a company that is reluctant to buy back shares and dividends, and is extremely unfriendly to shareholders.
In 2023, most Chinese concept stock Internet companies are strengthening share buybacks, such as Alibaba and Tencent, which have repurchase plans of 100 billion yuan, and Full Gang is a relative exception.
Behind the unsatisfactory stock price, there may also be doubts about the future growth space of the capital market.
In recent years, on the basis of doing deep network freight platform business, Full Truck has expanded its tentacles to multiple subdivisions, some of which have failed to explore, and some are moving forward slowly.
After Zhang Hui took office as the new CEO of Manbang, he once explored overseas business. In 2017, the Full Gang had no plans to go to sea until the beginning of 2019, when the International Department was established and the road to sea was officially opened.
In March 2019, the Full Gang sent a five-member team to Brazil for a two-month in-depth investigation. They not only visited local freight and logistics-related enterprises, but also hired professional guides to actively contact individual truck drivers, intermediaries, scalpers and small private owners to fully understand the local market situation.
Headhunter Lin Hai revealed to Zuo Lin Youli Channel that in order to better develop the Brazilian market, Full Bang planned to recruit an overseas HRBP person from China to help set up an overseas team. But then because of the pandemic, the plan was shelved.
"At that time, there were only three target markets for the full gang, namely Indonesia, Japan, and Brazil. The experience of being robbed at gunpoint during the quarantine period in Brazil brought a huge psychological impact to the team. Lin Hai said.
After some market research, the Full Truck finally identified Indonesia and Brazil as the key target markets for its overseas strategy. Soon after, the full gang finalized a strategic investment with the Brazilian version of the Full Bang TruckPad. Founded in 2013, Truckpad is the fastest-growing truck-to-cargo matching platform in Brazil and Latin America, allowing truck drivers to match goods to the nearest source, and its app downloads have surpassed the million mark at the time.
Regrettably, this seemingly hopeful battle to the sea has quietly come to an end before it really began.
A number of internal employees confirmed that at present, Full Truck no longer has an international business department, and the overseas business no longer exists. Regarding the reason for the full gang to give up the overseas business, the company did not give a clear answer to the outside world.
However, there is widespread speculation that factors such as international legal risks and the cost of international talents may be the main reasons for the full gang to make this decision.
One point of view is that the full gang uses cross-city freight as ecological soil, which may not be suitable for going to sea. Freight companies face very strict laws and regulations when going to sea, and there are strong trade unions abroad, with great emphasis on labor protection. Compared with short-distance transportation, long-distance transportation is more difficult to manage and riskier.
In the future, how the Full Gang will crack the growth point is the focus of attention from the outside world.
In order to go public with a higher valuation, the breakthrough point chosen by Lala
In order to go public with a higher valuation, the breakthrough point chosen by Lala
In a fourth-tier city like Jiangxi, a cargo pulling outlet can recruit 30 truck drivers a day during peak hours.
Many of them are attracted by the "price reduction". After the Spring Festival, Lala distributed driver recruitment orders across the country, with a scale of up to one million.
There is a big change that Lala has lowered the deposit of 1,000 yuan to 200 yuan in 244 cities across the country, and even gave truck drivers high incentives for attracting new customers. In the past, the margin of cargo lala has been at a high level, and there is no competitive advantage in the industry.
Many drivers are full of enthusiasm to return to work after the Spring Festival, and they want to join the ranks of cargo pullers to support their families when they see the recruitment advertisements of Lala.
There is a joke circulating on the Internet that now truck drivers don't make money by pulling goods, but they make money by pulling "heads". In some areas, each truck driver who successfully recommends a new driver to join the cargo lala can enjoy a referral reward of 2,000 yuan/person.
Yu Xuan, a freight practitioner, said that this form is no less than a pyramid scheme, and the trucking drivers rely on the network of acquaintances, one by one, and it is particularly easy to form viral transmission at the bottom.
However, if a new driver can't make money, the retention rate on the platform is generally 1~2 months. How to improve the retention rate is a problem that needs to be considered.
In the intra-city freight business, cargo lala has always paid more attention to the replenishment of capacity. The business logic of Cargo Lala is to start with massive capacity to ensure the experience of new users. The more drivers, the better the dispatch capacity, and the more flexible the control of the price.
However, the volume of intra-city freight is limited, and Lala must find new growth points. It is an inevitable trend for Lala to do online car-hailing, errands, car maintenance and other businesses.
Since its launch in March 2023, the errand business has covered 83 cities across the country including Shenzhen, Shanghai, and Nanjing within one year. In the early days, Cargo Lala relied on the freight business in the same city, and accumulated a lot of C-end users, and the business was quickly rolled out.
The errand business and the refrigeration business are both integrated into the innovative business of cargo pulling, and each has an operation team of 6 people. This manpower investment has changed the radical style of holding high and fighting high in the past.
Yu Hao, an online freight analyst, conducted a survey of more than 100 errand boys. He found that the errand business of cargo lala is based on Dada and SF Express in the same city, and mainly delivers documents, flowers, daily necessities and other categories, and is limited to goods within 20 kilograms.
In the eyes of the errand boys, the errand orders of Lala are equivalent to blind boxes. So much so that many catering errand boys know that Lala has an errand business, but they are unwilling to take orders. For example, alcohol products are fragile, and the distribution of two-wheeled electric vehicles is risky, and it is a big loss to break it.
In fact, the errand track is still dominated by catering and distribution, and Meituan has mastered the core source of goods. Taking the average daily order of 500 orders for the errand business of Lala Nanjing as an example, we can also see the limitations of the non-catering distribution market.
Although the cross-city freight business accounts for a small proportion, the cargo lala is still being promoted, and all of them are membership. Yunman has educated this market, and the goods are charged when they enter the bureau, and the expansion rate is very fast. Since 2018, Lala has expanded its inter-city freight services to more than 210 cities, with more than 70% of first-order merchants using intra-city freight services.
In order to obtain a higher valuation for the listing of Lalala, Zhou Shengfu planned and did every step of Lalala.
Every month, Zhou Shengfu, the founder of Huolala, will write a CEO letter internally, which is mainly based on the monthly summary and his own insights. Internally, it will be published in a book called "In Stock".
A CEO letter wrote that Zhou Shengfu set the highest record for the company's business trip in a month, and personally went to the front line to understand the different feedback of his products on both sides of the user and the market situation of the competition.
The biggest difference with the Full Gang is that Cargo Lala has a sea business. Zhou Shengfu has also put a lot of energy into overseas business.
For example, the recruitment of drivers has not been very good at the outlets of a certain city in Indonesia, and Zhou Shengfu will keep an eye on the data every month to urge the team, but there is still no improvement. Later, Zhou Shengfu personally went to Indonesia for a field investigation and found the root of the problem, that is, the location was very wrong. Under normal circumstances, the location of the outlet will allow large trucks to flow unimpeded, but the place where the car paint is pasted at the entrance of the outlet is marked with a street sign prohibiting large trucks from entering.
Zhou Shengfu
It is rumored that in the first month after the birth of EasyVan in October 2013, its founder Zhou Shengfu felt that he was a year behind his peers, and decided to rush out of Hong Kong in a hurry and try to open the first overseas market in Japan. And due to factors such as the App not being prepared, it lost one or two million at the beginning.
When EasyVan was founded, there was already a GogoVan in Hong Kong that did intra-city freight. Gogovan was also the first to start intra-city freight business from Southeast Asia, and was renamed Kuaigou Dache after being acquired by 58 Express. The following year, EasyVan set its sights on Southeast Asia, which was called "Lalamove".
At the beginning of 2019, Lala officially stepped out of Southeast Asia and landed in Mumbai, India, forming a head-to-head competition with Gogox in the Indian market. On August 1 of the same year, Lala announced its official entry into the South American market, and landed in Mexico City four months later. At that time, Full Truck laid out the Brazilian market through strategic mergers and acquisitions.
In the past ten years, overseas revenue accounts for less than 10%, and there is still a long way to go to build a global company.
Full Bang is dedicated to the cold chain logistics market
At the beginning, the Full Gang relied on ETC and oil cards to make money.
Intercity logistics naturally involves many business scenarios, such as getting on the highway, taking out loans to buy trucks, and then deriving financial services such as ETC, fuel cards, and credit. The financial business is deeply bound to the driver, and it is also the most profitable business in the past.
After the saturation of the intercity logistics market, the full gang is looking for a new battlefield to meet the growth requirements of the capital market.
Zhang Hui, CEO of Full Bang, has devoted a lot of effort to the cold transportation business.
Investor Li Li revealed that even though the cold chain department operates independently, Zhang Hui now participates in the monthly meeting of the Full Gang, and only has comments on the cold chain, and other businesses will pass after listening. Welcome to add the author's WeChat ydinitialheart to learn more insider.
As early as 2019, Full Truck began to set foot in the cold chain logistics market, and cut in internally through the incubation brand "Yunman Cold Transport". Two years later, Full Gang spun it off and operated it separately, and the cold chain business received Series A and B financing in 2021 and 2023.
Yunman Cold Transport is headquartered in Nanjing, and the core team members come from Alibaba, JD.com, Ctrip and other companies. Wang Yuchen, general manager of Yunman Cold Transport, is one of Ctrip's intrapreneurs, who has served as vice president of Ctrip Group, CEO of the bus and ferry ticket division, CEO of the car rental division, etc., and has rich experience in O2O entrepreneurship.
According to public data, the refrigerated transportation business has covered more than 300 cities and more than 100,000 routes across the country, with more than 600,000 refrigerated cargo owners and more than 270,000 registered refrigerated trucks, accounting for 70% of the current number of refrigerated trucks in the country. The annual profit of this business is about 500 million yuan, which is a relatively optimistic business for investors in the past.
However, despite the potential for development in the cold chain logistics market, industry insiders generally believe that the business is relatively vertical and has limited room for growth.
Investor Li Li revealed that Yunman Cold Transport is also seeking a new round of financing recently, but GLP and other investment institutions did not participate, and only old shareholders gave money.
Zhang Hui
In the early days, the Manbang mainly engaged in cross-city business, and the goods were well water and not river water. If the cross-city business is a defensive action of the goods lala, the strategic position of the intra-city business in the full gang is also the same.
In November 2020, after completing the US$1.7 billion financing of SoftBank, Sequoia and other institutions, Full Truck acquired the Guangdong intra-city freight company "Provincial Turnback Train" and quickly entered the intra-city freight market.
Three years have passed, and in 2023, Full Bang will merge Yunman Express with Provincial Turnaround Train, trying to develop the same city business with "provincial and provincial".
In 2023, the full-city business will be frequently moved in Guangzhou, with 0 commissions, 0 registration and activation fees, and 100 million yuan subsidies...... The recruitment information of the job search platform also reveals that the Full Gang is promoting the strategic goal of "province and province" to open the city in an all-round way.
But whether it is the volume or the volume, the business of the full gang in the same city is so small that it is negligible.
At present, the freight business of the Full Gang in the same city has only opened 15 cities. The business of the Full Gang is mainly concentrated in East China, while the business expansion in North China and Central China is relatively small, and it is only opened in two cities, Linyi and Quzhou.
The business of Lala in the same city has covered 363 cities across the country, and even sunk to the county seat. In the Guangzhou area, where the market demand is the largest, Lala is the first to enter, and although the "province" acquired by the Full Bang originated in Guangzhou, its market share is not as good as Lala.
Wei Ming, a senior freight practitioner, revealed that around November 2023, the average daily orders of the freight business in the same city of the Full Bang exceeded 100,000. Even according to the current positive growth rate of 20% of the Full Bang, the average daily performance of 120,000 orders is still only equivalent to the order volume of Lala in Guangzhou.
The competitive situation of the full gang and the goods pulling is actually a strategic game.
As soon as Lala makes efforts to cross-city business, the Full Gang will increase investment to subsidize intra-city business, and vice versa. This situation of holding each other back and challenging each other has become a norm between the two giants.
At present, the full truck is considering further optimizing services and improving efficiency in the stock market, in short, refined operations.
Write at the end
The competitive barriers of Lala and Manbang are very different.
The unit price of intercity logistics is higher, and the income model of this business is theoretically richer, while intra-city freight is basically a membership fee plus commission. The barrier of intra-city freight lies in scale, and after the large-scale effect of cargo lala is formed in this field, it is difficult for Didi freight and other players on the same track to break through.
There is an intersection between the business of Lala and the Full Gang, but there is no situation where two parties fall and one side falls. For example, the full gang can only grab a part of the share of freight in the same city, and the cargo lala can only grab a small part of the cake of intercity logistics.
Li Ming, a secondary market analyst, believes that the full gang business is very light, and the benefit is to increase the profit margin to a very high level. The Full Gang is in a monopoly position in the industry in the cross-city freight ecology, and if it is made a little heavier, there will be more room for improvement.
Liming said that if the listing is delayed, whether its future valuation will rise will depend on the trend of the entire capital market and logistics industry. Another possibility is that if Lala's overseas business or other new business achieves 100% growth and becomes profitable, this can also send a positive signal to the capital market.
In the highly competitive market environment, as the industry leader, Full Gang and Lala still need to continue to explore strategies for sustainable growth. This will also be a key issue that they will need to think about for the long term.
Note: At the request of the interviewee, Liming, Li Li, Yang Ming, Lin Hai, Yu Hao, etc. are pseudonyms. Leifeng Net, Leifeng Net