On December 14, Wang Wei successfully won the fourth IPO.
Red Star Capital Board noted that the four listed companies are SF Holdings (002352.SZ), SF RealTory (02191.HK), Kerry Logistics (00636.HK), and SF Tongcheng (09699.HK), which has just been listed on the Hong Kong Stock Exchange.
SF is not far from consumers, especially in first- and second-tier cities. In daily life, it is not difficult to see SF same-city delivery staff shuttling through the city to deliver fresh vegetables and fruits, flowers, cakes, documents and other instant items to consumers.
Source: SF Tongcheng official website
However, after the listing, SF Tongcheng did not seem to be "calling" in the capital market, and it was broken on the first day of listing, with a total market value of HK$14.338 billion as of the morning of December 22, with a total market value of HK$14.338 billion.
Red Star Capital Bureau will start from the financial report data of SF Tongcheng and the real-time logistics industry behind it, talk about what story Wang Wei told in this fourth IPO, and what is the imagination space for the future of SF Tongcheng?
(i)
Instant delivery: the two head players grasp the market initiative
Definition and characteristics of instant delivery
At present, China's logistics form can be divided into 3 categories, namely the whole network express, warehouse distribution mode and real-time distribution logistics.
Whole network express: the distance from the consumer is farther, due to the longer transportation distance leads to a longer transportation time, but the whole network express is relatively lower in the comprehensive cost of warehousing and transportation.
Warehouse distribution mode: merchants can prepare goods in the limited warehouse that has been built, so the logistics time is faster than the whole network delivery, and the goods can generally reach the user within 24 hours, but the comprehensive cost is higher than that of the whole network delivery.
Instant delivery: closest to the consumer, belongs to the point-to-point delivery mode, no transit delivery service makes the logistics time the highest, generally in about 1 hour to deliver the goods to the user, but the delivery cost is relatively higher.
From the perspective of the delivery section of instant delivery, in addition to the commercial platform's own transportation capacity resources, there are a large number of third-party platforms in the market to provide distribution capacity, and SF Tongcheng belongs to the third-party platform in real-time logistics.
In 2016, SF Tongcheng began to focus on the field of instant delivery, initially as a business unit of SF Holding Group, and since 2019, SF Tongcheng has begun to achieve independent operation and corporatized operation.
From the demand side, the main consumption scenarios of the current instant delivery are takeaway, b2c (business-to-customer e-commerce model) retail, express delivery and landing terminal delivery, c2c (e-commerce model between individuals) delivery demand, etc.
Among them, catering takeaway is still the most important consumption scene in the current instant delivery market, according to the Meituan Research Institute and the China Federation of Logistics and Purchasing, in 2019, catering takeaway delivery services accounted for the entire instant delivery market share of up to 70%.
Source: Meituan Research Institute, China Federation of Logistics and Purchasing
The two heads hold market dominance
From the perspective of the development of the instant delivery industry, according to iResearch data, as of 2020, the user scale of China's instant delivery has reached 506 million people, an increase of 20.19% year-on-year, and the annual order volume is 21 billion, with a five-year compound growth rate of 46.0%.
In the future, the instant delivery market has a large space for development in depth and breadth.
First of all, in terms of user scale, the current demand for instant delivery is still mainly from first- and second-tier cities, so there is still a large room for development in the sinking market, and the user scale of instant logistics will continue to expand in the future.
Secondly, in terms of use scenarios, the current use scenarios of instant delivery mainly focus on catering delivery, and with the cultivation of user habits, the future instant delivery service consumption scenarios will be more diverse and more comprehensive.
According to iResearch data, the annual order volume of China's instant delivery service industry is expected to further increase to 64.3 billion in 2024, with a five-year compound growth rate of 32.3%.
Source: iResearch
Although with the continuous penetration of instant delivery users and usage scenarios, its market cake is expected to further expand, but as far as the current market competition pattern is concerned, because food takeaway is still the most important consumption scenario, while Meituan (3690. HK) and Ele.me platforms have more wide penetration of local life services, so Meituan Delivery under Meituan Takeaway and Hummingbird under Ele.me dominate.
According to data from the Meituan Research Institute and the China Federation of Logistics and Purchasing, in 2019, according to the order volume, Meituan's distribution and hummingbird matching accounted for about 67% of the instant delivery market share.
And like SF Tongcheng, DADA Group (DADA. US), flash delivery and other second-tier platforms serve more scenarios outside of takeaway, including supermarket delivery, personal errands, last-mile delivery, etc.
(ii)
SF's operation status in the same city: revenue expanded, but losses continued
Revenue side: High customer concentration
According to the SF Tongcheng prospectus, from the perspective of corporate revenue, the revenue from 2018 to 2020 was 993 million yuan, 2.107 billion yuan and 4.843 billion yuan, respectively.
In terms of revenue sources, SF's customer concentration in the same city is relatively high, and from 2018 to 2020 and the first five months of 2021, the revenue of the top five customers accounted for 67.8%, 67.1%, 61.2% and 61.1% respectively. Among them, the proportion of revenue from SF Holdings gradually increased in the same period, 2.9%, 13.1%, 33.6% and 38.6% respectively.
In addition to SF Holding Group, most of SF's major customers in the same city are independent third parties, including McDonald's, Pizza Hut, Luckin Coffee, Heytea, etc.
From the perspective of business data, the number of orders in SF Tongcheng increased from 79.8 million in 2018 to 760.9 million in 2020, with a compound annual growth rate of 208.7%. In addition, the number of active businesses, active consumers, active riders, and cities covered have all risen.
Source: Prospectus
Expenditure side: labor costs remain high
Instant delivery is a typical labor-intensive industry, according to the prospectus, the main expenditure of SF Tongcheng comes from labor costs, from 2018 to 2020, SF Tongcheng labor outsourcing costs and SF Tongcheng employee welfare expenses were 1.198 billion yuan, 2.377 billion yuan and 4.921 billion yuan, accounting for 97.80%, 97.30% and 97.81% respectively.
From the perspective of single tickets, from 2018 to 2020, the single ticket income is 12.45 yuan / single, 9.98 yuan / single and 6.37 yuan / single, and the single ticket labor cost is 15.01 yuan / single, 11.26 yuan / single and 6.47 yuan / single, that is to say, the current single ticket income has not covered the labor cost of a single ticket, and SF Tongcheng is currently "a delivery, a loss".
In addition, according to the prospectus, the number of active riders in SF City increased from about 71,700 in 2018 to 459,400 in 2020, with a compound annual growth rate of 153%. But at the same time, the proportion of crowdsourced riders in the total number of riders is also increasing, as of May 31, 2021, the number of active riders in SF city is 340,700, of which 95.8% are crowdsourced riders.
That is to say, at present, even if it is a crowdsourcing rider-led distribution model, the huge labor cost has made SF Tongcheng unable to make ends meet, if in the future with the strengthening of policies such as social security for riders, SF Tongcheng may face more uncertainty in labor costs.
From the current loss situation, from 2018 to 2020, SF Tongcheng recorded gross losses of 231 million yuan, 336 million yuan and 189 million yuan respectively, corresponding to gross profit margins of -23.3%, -16.0% and -3.9% respectively, and narrowed to -0.9% as of May 31, 2021.
(iii)
SF city, where are the difficulties in the future development?
At present, the competition for distribution in the same city is fierce, and SF Tongcheng belongs to the late entrants in the industry. At the same time, the industry still belongs to the track with low technical content and high labor costs, there are many competitors, and the price war may also be "started at any time", which makes the future of SF City may be more passive.
Compared with the two major head players, Meituan and Hummingbird have a large and stable catering instant delivery back, while also providing users with more same-city services in addition to catering, mastering the entrance of traffic, and the market share is difficult to shake. For example, in June 2019, after Hummingbird Delivery became independent from Ele.me, it can not only take orders at Ele.me, but also serve Multiple Entities such as Yonghui Supermarket and CR Vanguard.
In addition to the two major leaders of the industry occupying a large market share, the competition between the second echelon players is also extremely fierce.
Among them, Dada, which was established in 2014, is a strong competitor of SF Tongcheng, Dada initially relied on the crowdsourcing model to grow rapidly, and in 2016 merged with JD.com, which mainly engages in supermarket fresh O2O distribution, Dada Group currently integrates JD.com's large-scale business flow to achieve effective coordination of retail and logistics.
From the perspective of splitting the business, at present, Dada is mainly divided into two parts: Dada Express delivery and Jingdong Home. According to the company's financial report, in 2020, Dada Express delivery and Jingdong Home revenue accounted for 59.84% and 40.16% respectively.
At present, the cost of Dada mainly comes from the cost of the rider and the sales expense. In 2020, the rider's remuneration and incentive costs were 4.148 billion yuan, accounting for 72.27% of the revenue, and the proportion in 2018 and 2019 was 99.82% and 86.43% respectively, which can be seen that the rider's share of total revenue has decreased significantly, indicating that the company's control of labor costs has been significantly improved.
In terms of sales expenses, Dada invested a lot of costs in user subsidies and advertising and marketing for JD.com, and the sales expenses in 2020 were 1.849 billion yuan, accounting for 32.21% of the revenue. In 2018 and 2019, the proportion was 63.66% and 45.63%, respectively. Continuous huge marketing investment, it can be seen that Dada has a Jingdong business flow at the same time is constantly "burning money" to promote user new and retention.
In addition, SF's old rivals have also set their sights on the market cake of instant delivery, and are eyeing this incremental market. For example, Shentong launched "Spita" in 2015, Yuantong launched "Timing" in 2017, Yunda launched "Cloud Delivery" in 2018, and Zhongtong launched "City Express" in 2018.
Back to the current situation of SF City, it is still mainly to serve B-end businesses, although the future imagination space of the instant delivery market is huge, but there is no traffic advantage of SF City, in the fierce market competition, the odds are unpredictable. This may also be the main reason why the capital market response has been flat after SF's listing in the same city.
brief summary:
Once SF relied on superior services and efficient distribution to dominate the jianghu, but these competitive advantages are gradually being equalized by competitors; in the later stage, the layout of instant delivery business, but the track has long been seriously internally rolled, SF city by what curve overtaking? It remains to be verified by time.
Red Star News reporter Yu Yao Liu Mi
Edited by Yang Cheng
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