360 Billion Express Giant'S Share Price And Performance Reach A New High: Caused By Epidemic Situation Or By Strategy?

After the epidemic, the domestic express giant Shunfeng Holding Co., Ltd. (hereinafter referred to as SF holding, 002352. SZ) started the mode of "rapid development".

Under the stimulation of the best performance in the first half of the year, on August 26, the share price of SF holdings rose and reached a record high, with a total market value of 365.5 billion yuan.

"SF's performance in the first half of this year exceeded market expectations, and the business performance of various sectors was more prominent." A courier industry analyst told the 21st century economic report that among the business segments of SF holdings, the first half income of the economic items business was close to the level of the whole year of 2018, indicating that the company's "sinking" strategy has taken effect.

However, SF holdings, which has a comprehensive business outbreak, will face a new stage of competition in the express industry stirred by e-commerce giants. In particular, the short-term fierce competition in the e-mail express market is still promoting the continuous evolution of the industry competition pattern.

For SF holdings, it needs to optimize the express network continuously, so as to give consideration to the timeliness and give full play to the scale efficiency under the rapid growth of business volume, so as to maintain the rapid growth of performance.

Double growth of e-commerce products

In the first half of this year, affected by the epidemic situation, the operation of domestic express industry suffered a certain degree of impact. According to the statistics of the State Post Office, the revenue of China's express delivery industry from January to June this year was 382.38 billion yuan, a year-on-year increase of 12.6%; the scale of express business reached 33.88 billion pieces, with a year-on-year growth of 22.1%. Compared with the same period last year, the growth rate has both declined.

However, SF holdings grew rapidly against the trend.

According to the financial report, in the first half of this year, SF holdings realized 71.129 billion yuan of operating revenue, a year-on-year increase of 42.05%, and realized a net profit of 3.762 billion yuan belonging to shareholders of listed companies, with a year-on-year growth of 21.35%. Compared with the first half of 2016, the operating income of SF Holdings has exceeded that of 2016.

In terms of business volume, the company completed 3.655 billion tickets in the first half of the year, with a year-on-year increase of 81.27%. This growth rate was significantly higher than the average level of the industry. Affected by this, the market share of SF holdings in the first half of the year reached 10.79%, an increase of 3.18 percentage points over the end of last year.

At present, Shunfeng holding's main business consists of seven parts: time service business, economic service business, express transportation business, cold transportation and medicine business, intra city express delivery business, international business and supply chain business.

In terms of business proportion, the two traditional businesses, time effect and economic package, are still the "top priority" -- in the first half of the year, the operating revenue was 31.962 billion yuan and 20.183 billion yuan respectively, with a year-on-year growth of 19.42% and 76.12% respectively, which directly promoted the overall business income.

In fact, this year's outbreak of the epidemic has brought negative impact on the domestic express industry, but also left opportunities for "preparers".

This can be explained by the performance of SF holdings time limited business.

As the company's "housekeeping skills", Shunfeng holdings, which started from positioning medium and high-end business pieces, has encountered bottlenecks in the timeliness business in recent years. In 2019, the growth rate of SF holding's timeliness parts business will drop to single digit.

However, the epidemic led to the reshaping of high-end consumer online channels, and promoted SF holding's medium and high-end time sensitive parts to re open the growth space. According to the analysis of Founder Securities, SF holding's time effective parts continued the growth trend in the second half of 2019, mainly due to the consumption upgrading and the epidemic situation accelerating the penetration of e-commerce, and the online trend of high-end consumption began to appear, and the company vigorously explored the e-commerce market.

At the same time, under the implementation of the "sinking" strategy, e-commerce parts have also become the main driving force for the increase of SF holding's market share.

"The stagnation of market share once became the" trouble "of SF holdings in recent years. For this reason, the company adjusted its product strategy last year and launched a new product with special preferential distribution for the e-commerce parts market and customers." In an interview with the 21st century economic reporter, the aforementioned analysts said that from the current financial report data, the effect is good.

The year of 2019 is a year of rapid recovery of SF holding's business volume and market share.

The 21st century economic reporter combed the monthly business volume of SF holdings last year and found that with the launch of special products in May last year, the performance of SF holdings increased significantly in the second half of the year. In the whole year of last year, SF holdings relied on preferential products to avoid its market share shrinking.

E-commerce business continued to expand in the first half of this year. As SF holding does not stop work during the Spring Festival and returns to work quickly, the company has seized the opportunity of epidemic prevention materials and online shopping demand during the epidemic period, driving the economy to release economies of scale. According to the financial report, the business volume of SF holdings in the first half of this year increased by 240.86% year on year.

The battle after "sinking" has begun

"Sinking" strategy makes SF holdings change its sluggish state of increasing market share in the past few years. But now, with the deepening of the "binding" between the domestic express industry and the upstream e-commerce field, the competition that SF holdings is facing is not the pure market competition between express companies.

Recently, the suspension of cooperation between Jingdong and Shentong express makes the industry realize that it is "inevitable by accident" under the background of industry competition. Guoxin Securities Analysis believes that with the development of e-commerce market gradually mature, the competition of e-commerce giants has gradually extended to the logistics industry closely related to e-commerce, especially the Express board.

However, it seems inevitable that express companies will become more dependent on e-commerce platforms. On the one hand, e-commerce has penetrated into the third and fourth tier cities and rural areas, and the incremental space of express enterprises still needs to be opened by e-commerce platform; on the other hand, under the homogenization of business model of some express enterprises, the scale or cost gap has not yet been opened, especially the "Tongda" express enterprises. In the fierce middle and low-end e-commerce express market, the real optimization of the competition pattern still needs time.

In this context, SF holdings, which has joined the competition in the field of low-end e-commerce components, is bound to face more fierce competition in the short term.

"The cruelty of this competition may be reflected in the fact that once the 'price' fluctuates violently, SF holdings will face the cost pressure brought about by the direct operation mode." In addition to worrying about price factors, the fast-growing business volume will also test the carrying capacity of infrastructure such as trunk lines and networks. In this regard, Anxin securities also predicted that "SF holdings may continue to increase its investment in e-commerce resources in the future, and capital expenditure will bring depreciation and increase operating costs."

In fact, the single ticket income of SF holdings in the first half of this year also shows that the influx of e-commerce products accelerates the decline of single ticket income. According to the financial report, the single ticket income range of SF holding's special products ranges from 5 yuan to 7 yuan, far lower than that of time effective products. However, with the rapid growth of the business volume of special products, the company's single ticket income in the first half of the year was 18.39 yuan, a year-on-year decrease of 22.14%, with a significant decrease.

In addition, SF holdings, whose products are "sinking", also faces the risk of "loss" in profitability. Gross profit rate data show that the company's gross profit margin was 18.65% in the first half of this year, 1.17 percentage points lower than the same period last year.

Fortunately, SF holdings is now increasing technology investment, improving management efficiency, and reducing the cost rate to ease the cost pressure.

?