Visual China
Reporter | Tao Zhixian Edit | Chen Feiya Reporter | Tao Zhixian Edit | Chen Feiya On the evening of April 22, SF Holdings (002352.SZ) announced the highly anticipated quarterly report for 2021. Data show that the company’s operating income was 42.62 billion yuan, a year-on-year increase of 27.07%; the net loss attributable to shareholders of listed companies was 989 million yuan, compared with a profit of 907 million yuan in the same period last year. In addition, the company’s business volume increased by 44% year-on-year. Since SF Holdings announced its pre-losing performance forecast on April 9, the stock price has fallen by 21.49%. Since the Spring Festival, the stock price has fallen by 40.46%, and the market value has evaporated by nearly 200 billion. Now that the quarterly report of “worth” 200 billion yuan has been finalized, why did SF Holdings lose money? Behind the sharp drop in stock prices, who is the “beneficiary”? Time-sensitive parts business falls short of expectations The most fundamental reason for the loss of SF Holdings is that its high-margin aging parts business is not as good as expected. 
Time-sensitive parts mainly refer to businesses such as SF Express and SF Express, and are the company’s most important source of profit. In the first quarter of 2020, due to the impact of the epidemic, many physical stores closed, and consumption was mainly online, which drove the growth of express delivery business. In addition, the rapid growth of medical equipment, masks and other businesses has also promoted the company’s business development. As the epidemic in my country has been effectively alleviated, many offline consumption have resumed, which has caused the company’s business to fall short of expectations during the same period.
Competition during the Spring Festival has also become more intense. In 2020, Santong Yida was affected by the epidemic, and its franchisees were slow to resume work and basically did not participate in the previous logistics competition. At that time, SF Express logistics showed a huge advantage and occupied the majority of the market. This year, the Tongda Department participated in the Spring Festival logistics war, and to a certain extent diverted SF Express, which caused its business volume to fall.
The fierce competition during the Spring Festival is also reflected in subsidies to front-line logistics employees. SF Holdings responded to the advocacy of the Spring Festival in situ to meet the service needs of e-commerce platforms and customers not closing during the Spring Festival. It increased the number of staff on duty, such as collection staff, warehouse managers, and transfer operators, so it gave higher subsidies to first- and second-line staff , Increased the related costs to a certain extent. The company’s cash paid to employees in the first quarter of 2021 was 8.872 billion yuan, an increase of 28.86% from the 6.885 billion yuan in 2020. Both the increase and the value are the highest in the company’s history.
After the electronic invoices and commercial insurance policies, SF Holdings also lost some of its customers. In recent years, the electronicization of invoices and commercial insurance policies has affected part of the original business. High-end commercial items represented by luxury goods have not been filled in time, so the overall growth rate has been affected to a certain extent. For the express delivery industry, fixed-end costs such as the fixed part of employee compensation, self-owned vehicles, space leasing, and depreciation and amortization account for about 60%. Once a large amount of production capacity is invested, there will be a sharp decline in gross profit if the income is less than expected. .
In order to supplement the source of customers, SF Holdings sinks the e-commerce market to participate in price wars, which affects gross profit. Prior to this, SF Holdings has always been the absolute leader in the field of commercial express delivery, and the company’s comprehensive gross profit margin has been maintained at 16% to 18%. In contrast, Yunda (002120.SZ), which is mainly engaged in e-commerce, has a gross profit margin of only 9.99% in the third quarter of 2020. Since last year, SF Holdings has begun to sink into the e-commerce market, and its gross profit margin has fallen from 17.42% in 2019 to 16.35% in 2020, while only 7.16% in the first quarter of 2021. Take the company’s single ticket price in March this year as an example. The single ticket price of its express logistics business was 15.74 yuan, a 12.12% drop from 17.91 yuan in the same period last year. Operating income increased from 12.163 billion yuan to 13.792 billion yuan, an increase of 13.39%. Obviously, SF Holdings has adopted a business strategy of trading price for volume. In this regard, the company also said that its sinking e-commerce market demand is strong, and the business volume of economic express delivery products special distribution is growing rapidly. Therefore, the proportion of parts of this part of the low-priced products has increased rapidly, which puts a certain pressure on the overall gross profit.
Data source: WIND, Interface News Research Department “Benefit” fixed increase party
Business disruption can only affect the company’s gross profit, and the lack of real-time returns on a large amount of investment has led to SF Holdings’ losses. In recent years, the company has actively implemented a large logistics strategy. In order to expand new business and expand market share, it has increased its pre-investment in new business, including network construction of express, Fengwang, intra-city express delivery, warehouse network, and integration of various stations and lines. , In order to improve the timeliness of land transportation services. Taking the construction in progress as an example, SF Holdings increased by 1.079 billion yuan in the first quarter of 2021 compared with the third quarter of 2020, an increase of 23.76%.
SF Holdings’ large-scale production capacity is for the future. In the future, many logistics businesses, including e-commerce parts, will follow SF’s own logistics lines. Therefore, since the fourth quarter of last year, the company has increased the automation construction of the transit yard, and increased the production capacity processing scale, and the investment in fixed assets such as venues and equipment. This leads to an increase in amortization and depreciation costs, and in the initial stage of the integration of various businesses, there is a phenomenon of overlapping resources, which leads to an increase in costs.
Wang Wei, the actual controller of SF Holdings, has previously stated that he will certainly not lose again in the second quarter of this year, but the annual profit will not return to the same period last year. It is expected that through the integration of various network resources and with the growth of business scale, the performance is expected to gradually release the scale effect in the second half of this year. As for next year, SF Express may continue to implement the policy of expanding production and increasing capacity. In other words, the performance of SF Holdings in the past two years will have been under pressure.
The sharp drop in the stock price of SF Holdings has attracted much attention to the company’s ongoing fixed growth. On February 10 this year, SF Holdings issued a plan for non-public issuance of stocks. It plans to raise 22 billion yuan, mainly for capacity construction and supplementary liquidity. The relevant issuance price is not lower than the average stock transaction average of the 20 trading days before the pricing benchmark. 80% of the price, the pricing base date is the first day of the issuance period and the day after the sponsor sends the subscription invitation. SF Holdings still needs to respond to the CSRC’s project review, so the pricing benchmark will be based on SF’s stock price after the sharp drop. The recent sharp drop in stock prices will “benefit” the future fixed-increasing party in disguise.
It is worth mentioning that Wu Weiting, the chief financial officer of SF Holdings, was transferred. Since April 24, he has resigned from the posts of member of the audit committee, chief financial officer and deputy general manager of the company’s board of directors. He will continue to serve as a director of the company, and at the same time, the company will hire Wu Weiting as a capital operation consultant for the company’s logistics industrial park.
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