The express cabinet downstairs in the community is also going to be listed on the Hong Kong stock market! But for Hive Hive, the current business is not as good as expected.
On August 30, Hive Hive Holdings Limited (hereinafter referred to as "Hive Hive") officially submitted a prospectus to the Hong Kong Stock Exchange to be listed on the main board.
According to the "2024 Global Unicorn List" released by the Hurun Research Institute in April this year, Hive Hive has a valuation of 25 billion, ranking 270th in the world, which has been on the list for 6 consecutive times since 2019.
After the listing, this will be the fifth listed company of SF Express, after the SF Department under the leadership of Wang Wei, the "first brother of express delivery", has four listed companies: SF Holdings, Kerry Logistics, SF City, and SF REIT.
If Hive Nest successfully lands on the Hong Kong Stock Exchange this time, Wang Wei, who is born in the 70s, will receive the fifth IPO in his life.
But for Wang Wei, it is not yet time to open champagne, the data shows that from 2021 to 2023, Hive Hive will achieve revenue of 2.526 billion yuan, 2.891 billion yuan and 3.811 billion yuan respectively, but at the same time, the company's cumulative loss in three years has reached 3.768 billion yuan.
According to the prospectus, in the first half of this year, Hive Hive achieved revenue of 1.904 billion yuan, a year-on-year increase of 33.7%, and a net profit of 71.602 million yuan, which was the first turnaround since its establishment. However, after multiple rounds of financing, the valuation of Hive Hive has reached 25 billion yuan, and if the net profit in the first half of the year is calculated, the valuation of Hive Hive is more than 100 times PE. Is this reasonable?
01 times the disputed late fees
Since its inception, Hive Hive has received the blessing of many giants, and when it was established in 2015, Hive Hive has received 500 million yuan of investment support from five logistics giants, including SF Express, Zhongtong Express, Shanghai Yunyun under Yunda, and Suzhou GLP.
Over time, Hive Hive has continued to grow and successfully complete multiple rounds of financing: it was valued at $5.5 billion in 2017 and jumped to $3.3 billion in 2021. According to the "2024 Global Unicorn List" released by the Hurun Research Institute, Hive Hive's valuation has reached 25 billion yuan, ranking 270th on the list.
Thanks to the strong support of SF, Hive Hive has been able to develop steadily, but for Hive Hive, the road must always go its own, and even SF Express cannot guarantee the rapid growth of Hive Hive forever.
According to the prospectus filed by Hive Hive, its revenue mainly comes from three parts: express terminal delivery services, consumer intelligent delivery and value-added services.
Among them, express terminal delivery service is the main source of income for Hive Hive. From 2021 to 2023, the revenue of this business will be 1.46 billion yuan, 1.69 billion yuan, and 1.84 billion yuan respectively, with a compound annual growth rate of 8%. During the same period, the number of parcels delivered was 6.204 billion, 5.823 billion and 6.463 billion respectively, with a compound annual growth rate of only 1.4%, far lower than the market average of 32.0%.
However, consumer intelligent delivery services have increased from 150 million yuan in 2021 to 1.02 billion yuan in 2023, and nearly 700 million yuan in revenue in the first half of this year.
However, it is worth noting that in order to solve the problem of the "last mile" of express delivery, since May 2020, Hive Hive has started to charge users express overtime fees, which has caused dissatisfaction among users.
Previously, the courier paid the "venue fee", and the courier could stop at the "temporary storage point" of the nest. However, if the user fails to pick up the parcel in time due to a business trip or forgetfulness, the parcel may be held for a long time.
Hive Hive believes that this has affected its revenue, so it has decided to charge an overtime fee of 0.5 yuan for every 12 hours, capped at 3 yuan, for express deliveries stranded for more than 12 hours. Naturally, the move caused widespread public controversy...... Subsequently, under the pressure of public opinion, Hive Hive adjusted its charging strategy, extending the free storage time to 18 hours, and then charging 0.5 yuan for every 12 hours, capped at 3 yuan.
According to the data disclosed in the prospectus, from 2021 to 2023 and in the first five months of 2024, Hive Hive will collect 215 million yuan, 230 million yuan, 259 million yuan and 104 million yuan respectively for the storage fee (also known as late fee) for stranded packages.
In other words, in the past three and a half years, the total amount of storage fees collected by Hive Hive through stranded packages has reached 808 million yuan. In other words, users forgot or delayed pickups, bringing more than $800 million in revenue to Hive Hive.
However, the late fee has unexpectedly increased the turnover rate of Hive Nest.
From 2021 to 2022, Hive Hive's lattice turnover rate fell from 67.2% to 65.7%, but from 2023 to the first five months of 2024, the turnover rate continued to grow, reaching 72.6% and 74.6% respectively.
According to the prospectus, consumers can subscribe to a membership plan to enjoy free and additional discounts for overtime pickup, which provides monthly, quarterly and annual subscriptions at a cost of $5.0, $15.0 and $55.0 respectively.
Despite this, there is still a lot of controversy about the practice of Hive Nest charging overtime fees. Many consumers said that even if they are not at home for a few days, they can leave the delivery at their doorstep, and considering that cameras are commonly installed in modern residential areas, they are not worried about the loss of the delivery, so they are not willing to pay extra to store the package in the delivery locker.
Up to now, there are more than 16,000 complaints involving Hive Nest smart cabinets, and a large number of them are complaints about late fees.
02 The second growth curve is hard to find
Among the two major revenue streams of Hive Hive, the terminal delivery service is constrained by the increasingly fierce competition in the express delivery market, and its space for further development is relatively limited.
Because with the intensification of competition in the e-commerce industry, the competition and cooperative relationship between express cabinet companies, express delivery companies and e-commerce platforms are also changing. Major express companies and e-commerce platforms have strengthened their attention to their own express cabinet business to enhance their control over logistics links, such as JD Express Locker is set up by JD in order to improve logistics services.
On March 1 this year, the official implementation of the "Express Market Management Measures" poses an additional challenge to the future development of Hive Hive. The "Measures" stipulate that without the consent of the user, express delivery companies shall not use smart express boxes, express service stations, etc. for express delivery. This shows that it is difficult for Hive Hive to foresee significant growth in the future by simply charging couriers and users for courier staging fees.
It is precisely these reasons that force Hive Hive to open up a second growth curve and expand its business scope.
In 2022, Hive Hive will officially lay out the "Convenient Life Circle in a Quarter of an Hour", expanding its advertising service business, cleaning and care services and home life services to meet the needs of consumers and expand profit channels.
As one of the new areas expanded by Hive Nest, this single cleaning service has brought a new experience to users. According to the data, the number of orders for Hive Hive Care Services increased from about 6,900 in 2022 to about 54,800 in 2023. This year, the list reached about 96,200 shares. As of May 31, 2024, Hive Hive Care's network includes a self-operated cleaning facility in Zhongshan, Guangdong Province, and 135 third-party cleaning factories in 25 provinces in China.
The number of orders for Hive Hive's other convenience services, including home cleaning services, home appliance cleaning services and home repair services, also increased from about 1,730 in 2022 to about 9,830 in 2023 and reached about 7,140 in the five months ended May 31, 2024. Although the increase is significant, it is from a small base and has a limited contribution to Hive Hive's financial statements.
All of the above businesses are ultimately reflected in the "value-added services and others" section of Hive Hive, which has grown but only slightly, and revenue has never exceeded $1 billion, with revenue accounting for 25% in 2023 and further declining to 22.9% in the first five months of 2024.
Normally, Hive Hive has a large number of delivery lockers in various communities, office buildings and other places, which provides a natural advantage for it to expand its cleaning and care services. But why hasn't its second growth curve been as successful as it could have been? One of the main reasons is competition from peers.
For example, the current home service market has been occupied by many competitors, such as Meituan, Swan Daojia, Ziru, I Love My Home and other platforms all provide home service.
Compared with professional life service platforms such as Meituan and Swan Daojia, Hive Hive has relatively little business accumulation in the field of cleaning and care services and home life services. Expanding the market in these areas will require new investment, which will not have a positive impact on the financial statements in the short term, but may put new pressure on the profit and loss line. This is clearly not what the nest is currently looking for.
Therefore, in the face of competition from other leaders, it is not so easy for Hive Hive to open up the second growth curve, and in the current PE valuation of hundreds of times, how to go in the future will test the wisdom of the company's top management.