On April 24, Shentong Express Co., Ltd. released its 2023 annual report and 2024 first quarter report. According to the annual report, the annual business volume of Shentong Express in 2023 will be 17.507 billion pieces, a year-on-year increase of 35.23%, 15.8 percentage points higher than the industry growth rate, the annual operating income will be 40.924 billion yuan, a year-on-year increase of 21.54%, the market share will reach 13.26%, an increase of 1.55 percentage points year-on-year, and the net profit attributable to the parent company will be 341 million yuan, an increase of 18.41% over the same period last year.
It can be seen that Shentong Express will be running wild in 2023, and its business volume growth rate will rank first among leading express companies such as Tongda Department and SF Express. Although the annual express volume ranking is still fourth, the gap between Shentong and Yunda has been greatly narrowed. In 2022, the gap between the business volume of Shentong Express and Yunda Express will be 4.662 billion votes, and in 2023, the gap between the two will only be 1.347 billion votes.
However, for Shentong, it is still facing challenges whether it can continue to maintain the first position in business volume growth in 2024, and even surpass Yunda to become the "third oldest" of franchised express delivery companies.
(The picture comes from the Internet)
The effect of "exchanging price for volume" is obvious
For the rapid growth in the past year, Shentong Express explained in the financial report that on the basis of maintaining a reasonable growth rate of profits, Shentong led the growth of business volume, and the growth rate far exceeded the industry level. On the one hand, the company continues to promote digital and intelligent transformation, helps improve refined management capabilities, and empowers grassroots outlets to improve their service levels, and on the other hand, the company continues to focus on building China's leading economic express delivery, continuously improving service capabilities and customer experience, and has won more recognition.
However, the reporter noticed that according to the monthly operating data disclosed by A-share express companies last year, the average single ticket price of the four A-share companies of SF, Shentong, Yuantong and Yunda all fell year-on-year, among which the single ticket price of Shentong, which has the fastest growth rate, fell by 10% year-on-year, the largest decline. This also means that in the past year, Shentong's "price for volume" effect has been obvious.
According to the financial report, as of December 31, 2023, Shentong Express had 5,000 independent outlets on the whole network, a year-on-year increase of 3%, with more than 55,000 service sites and stores on the whole network, 99.5% of the network coverage rate in districts and counties across the country, 5,992 self-owned trunk transport vehicles, and about 3,200 lines carried by its own vehicles, with a logistics pass-through rate of 83.24%. At the same time, the company's R&D investment is also increasing significantly, and the financial report shows that Shentong's R&D investment in 2023 will be 274 million yuan, an increase of 47.63% compared with 2022.
The resumption of cooperation with JD.com has brought new increments
It is worth mentioning that Shentong mentioned in its financial report that in the first half of 2023, the company reached a cooperation agreement with JD.com, and the business volume from the JD platform has achieved rapid growth. In addition, the company has reached cooperation with Douyin in on-demand distribution, warehousing and distribution services, reverse logistics, etc., and the depth and breadth of cooperation between the two sides have been further expanded, and the company's full-platform and full-category service capabilities have been recognized.
In March last year, Liu Qiangdong, chairman of the board of directors of Jingdong Group, emphasized at the management meeting of Jingdong Logistics Group that merchants are no longer required to use Jingdong Logistics, and at that time, in response to the news that "Jingdong Mall has fully resumed cooperation with Shentong, Jingdong merchants can choose Shentong for delivery". Shentong Express responded that the project is still in the testing stage, and the specific progress is subject to the information released by the company or relevant officials.
As early as August 2020, JD.com announced that it unilaterally terminated its cooperation with Shentong, and now it can be seen from the financial report that Shentong and JD.com have officially resumed cooperation, which brings more business increments to Shentong.
In addition, the annual report disclosed that in the shareholding structure of Shentong, Zhejiang Cainiao Supply Chain Management Co., Ltd. holds 25% of the shares, Chen Dejun, chairman of Shentong Express, holds 3.38% of the shares, and Chen Xiaoying holds 2.6% of the shares.
The production capacity is expected to reach an average of 75 million orders per day
As for the future development focus, Shentong mentioned in the annual report that in 2024, the company will continue to promote the 10 billion production capacity improvement project, and continue to invest in infrastructure construction on the basis of last year's new construction and reconstruction and expansion projects, and it is expected that the company's normal throughput capacity is expected to increase to more than 75 million orders per day in 2024. According to the financial report, Shentong's average daily production capacity in 2023 will be about 60 million orders.
In the past three years, Shentong Express has been continuously expanding its production capacity, but the expansion of production capacity has also led to a record high debt ratio of Shentong. According to the first quarterly report disclosed by Shentong, its debt ratio was 62.18%, a record high. The increasing debt ratio has also brought about the company's operating risks to a certain extent.
According to the first-quarter financial report disclosed by Shentong, its operating income in the first quarter was 10.132 billion yuan, a year-on-year increase of 15.87%. net profit attributable to shareholders of listed companies was 190 million yuan, a year-on-year increase of 43.20%. net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 186 million yuan, a year-on-year increase of 48.70%. Basic earnings per share was 0.13 yuan.
According to the company's disclosed statistics, in the first quarter of 2024, the business volume of express delivery companies will be Yuantong> Yunda> Shentong> J&T > SF, and in terms of business volume growth, J&T Express led the growth rate in the first quarter, with a year-on-year increase of 44.5%, and the growth rate of Shentong Express's business volume continued to be ahead of the Tongda Department, and the competition among leading enterprises was still fierce. However, in the just-disclosed March performance report, the growth rate of Yunda Express's business volume exceeded that of Shentong, and the "three wars" of franchised express companies were also full of suspense.
According to the research report previously released by Guosen Securities, the competition strategy of the leading express delivery companies will be adjusted, the competition situation in the industry will be significantly intensified in 2023, the year-on-year decline in the single ticket income of the Tongda Department will be significantly expanded, and the range and magnitude of price increases in the peak season of express delivery will not be as good as in the past two years. In the context of consumption downgrade, the continuous decline in the unit price of e-commerce customers has driven the sustained and rapid growth of express delivery business. 2024 is a critical year for the transformation of the competitive landscape, and the performance of leading express delivery will accelerate differentiation.
2024 is the "Year of Focus on Experience", focusing on product and service differentiation
Shentong Express said that 2024 will be the "Year of Focus on Experience", and on the basis of deeply cultivating "economic express delivery", it will focus on product and service differentiation to meet the personalized needs of consumers and provide customers with a "good and fast and economical" express logistics service experience. Shentong will continue to focus on the main business of economic express delivery, adhere to the business idea of "stabilizing stock and expanding increment", continue to deepen cooperation with traditional mainstream e-commerce platforms, and continue to expand cooperation with emerging platforms such as live broadcast e-commerce and social e-commerce, so as to promote the company to achieve the goal of exceeding the growth rate of business volume in the express delivery industry.
The reporter noted that in order to improve the service experience, Shentong disclosed in its annual report that the allocation of customer service personnel in 2024 will increase by more than 100 people on the basis of 2023.
While the business volume growth rate is in full swing with Yunda and J&T, Shentong will focus more on improving service experience and product stratification in 2024. (Source: National Business Daily, China Securities Journal, China-Singapore Jingwei, Express Ecosystem)