With the sound of the Hong Kong Stock Exchange, the “Independent Third Party Instant Delivery First Share” was officially born.
On December 14, SF Express was officially listed on the Hong Kong Stock Exchange under the code 09699, HK. The global public offering of 130 million ordinary shares was priced at HK$16.42 per share, and approximately HK$2.031 billion was raised.
From its low-key launch as an independent business unit of SF Holdings in 2016, to independent operations in 2019, and then hitting the market in 2021, SF Express successfully achieved the “triple jump” among the heroes in just five years, demonstrating a strong performance Explosive force, and its own growth experience proves the huge market space and opportunities behind the instant delivery industry.
At the bell ringing ceremony, Wang Wei, chairman and general manager of SF Express, stated at the scene that minute-level delivery is a major trend in the logistics industry, and customers have new requirements for “fast”. SF Express launched a new delivery model based on the original products. SF Express is also one of the strategic directions of SF Group.
Sun Haijin, CEO of SF Express, said: “I am fortunate to grow into a leading third-party instant delivery service platform in China. We firmly believe that as a service industry, no matter how the overall environment and industry structure changes, no matter how the industry is upgraded, serving others well is Achieve yourself.”
As the capillaries of the city’s logistics system, instant delivery originated from online shopping, emerged from takeaways, and developed in new retail. Now it is also ushering in an industry explosion period of intensive financing and IPOs.
The industry believes that with the increase in order volume and operational efficiency, and the rapid expansion of revenue, the scale effect of SF’s intra-city operations will continue to appear. After the listing, SF’s intra-city will release greater potential and continue to maintain high growth. As the “first third-party independent delivery stock”, SF Express’s listing in the same city will also bring about a new round of reform and upgrading in the instant delivery market. As the first segment of SF Express to land on the capital market, SF Express’s successful listing in the same city also reflects SF Express’s strong incubation capabilities for new businesses.
“C-bit” grassroots employees ring the bell and operate independently for two years and go public “rapidly”
SF tooling plus sports shoes and jeans are almost the standard outfits for Wang Wei to attend important occasions. At the listing ceremony in Shenzhen, Wang Wei made his public debut in the SF City-wide cycling uniform, and gained another listed company. In Wang Wei’s view, SF Express is not only an important strategy of the SF Group, but also a new product that SF Express has launched on the basis of its existing model for “faster” and higher pursuit of new products, which has long-term value.
At the listing ceremony, Sun Haijin reviewed several key nodes of SF Express City, including: In May 2016, the first system order was completed, and SF Express riders began to shuttle through the city streets; in March 2019, SF Express City took the first place. An external financing, and the company’s independent operation began; in October 2019, SF Express officially released its independent brand and established its vision of becoming a third-party platform.
“This listing only means that SF Express has just graduated from the sixth grade of elementary school, and the big track of instant logistics has a long way to go.” Sun Haijin said.
In the bell ringing session, the “key people” of the above key links also appeared on the scene. Among them, the employees who stood on the left and right sides of the gong in the middle and were responsible for knocking the gong were from crowdsourcing to full-time to assistant site directors, and “Pandemic Pioneers” Knight Cheng Nan and SF Express City CLS Smart Brain R&D team outstanding representative Xian Ke, other executives and business team representatives stand on the left and right sides.
“From one city to more than 1,000 cities and counties, from one customer to hundreds of thousands of customers, from one order to more than one billion orders, behind every digital growth, we have witnessed the growth of the same city over the past few years. With the sweat and hard work of all riders, webmasters and BD sales.” Sun Haijin said.
In the field of instant delivery, it started in 2016 and operated independently in 2019. Compared with Meituan, Ele.me, and the first Dada Group in “Instant Delivery”, as well as original players such as UU errands and flash delivery, SF Express is undoubtedly It is a “latecomer”, but it has also occupied a place in the market for a short time: According to the data of the iResearch report, based on the order volume for the year ended March 31, 2021, SF Express is already China’s leading third-party instant delivery service Platform, with a market share of 11%. After two years of independent operation, it achieved listing on the Hong Kong Stock Exchange, and SF Express also set a record for the listing speed of instant delivery companies.
From the perspective of specific business models, SF Express focuses on “full scenarios” in the same city, that is, from mature scenarios such as catering takeaway, to incremental scenarios such as intra-city retail, near-field e-commerce, and near-field services, and implements full coverage of distribution scenarios for various products and services , So that it can respond to the development and upgrade of the local consumer market to meet the ever-changing customer needs. In addition, SF Express has now entered the last mile delivery service market.
The prospectus data shows that as of May 31, 2021, SF Express has strategically cooperated with more than 2,000 merchant brands, has served about 530,000 registered merchants, and provided about 126 million registered consumers with instant delivery of local life services. The achievement rate of timeliness during the track record period exceeded 95%.
Investment lineup luxury capital is optimistic about long-term value
Although the instant delivery market has developed rapidly in the past two years and has produced a large number of top players, losses are still the main theme of the entire industry.
Different from the loss of other platforms, the loss of SF Express City has quickly narrowed to below 1%, and is showing a rapid recovery trend.
According to the prospectus, SF Express’s revenue from 2018 to 2020 will be 993 million yuan, 2.107 billion yuan, and 4.84 billion yuan, respectively, with a compound annual growth rate of 120.8%, and gross profit margins of -23.3%, -16%, and -3.9. %. As of the first five months of May 31 this year, SF Express’s intra-city revenue reached 3.046 billion yuan, its net loss narrowed to 352 million yuan, and its gross profit margin had narrowed to -0.9%.
In terms of order volume, SF Express’s prospectus in the same city shows that from 2018 to 2020, the total number of orders will be 80 million, 211 million and 761 million, with a compound annual growth rate of 208.7%. According to the iResearch Consulting report, the compound annual growth rate of the instant delivery service industry during the same period was 27.0%.
Such growth rate and profitability have also allowed SF Express to gain a luxurious capital lineup.
In December last year, SF Express completed its B round of financing. Investment institutions including Goldman Sachs, CITIC Capital, Bertelsmann, etc. undoubtedly provided a strong brand endorsement for its listing. At the same time, in March this year, SF Express, through its subsidiary Tyson Holdings, further increased the capital of SF Express by about 409 million yuan. After the capital increase, SF Express’s total shareholding ratio in SF Express increased to 66.76%. This is also regarded by the outside world as the final pavement for the listing of intra-city business by SF Express, which fully demonstrates its confidence in the development prospects of intra-city business.
On the eve of the listing, the latest prospectus of SF Express showed that Taobao China (Alibaba subsidiary) and Hello Inc. (Hello Inc.) are cornerstone investors of SF Express, subscribed for a total of 890 million Hong Kong dollars. Among them, Taobao China subscribed for 851 million Hong Kong dollars, and Hello Inc. subscribed for 39 million Hong Kong dollars. Taobao China (a subsidiary of Alibaba) and Hello Inc. (Hello Inc.) are the cornerstone investors of SF Express. They have subscribed for a total of HK$890 million. Among them, Taobao China subscribed for 851 million Hong Kong dollars, and Hello Inc. subscribed for 39 million Hong Kong dollars.
Industry stakeholders believe that SF Express’s diversified, professional, and high-quality distribution services in the same city can not only help Ali’s local life business to create a high-end instant logistics experience, but also further complement the “Ali-based” logistics capacity during the promotion period and peak hours . It is foreseeable that, combined with Ali’s existing real-time logistics system, SF Express is expected to help Ali carry out better resource integration, build a more complete real-time logistics network, and strive for greater market growth. And this time Ali’s capital injection into SF Express will undoubtedly make the outside world more optimistic about the future share price of SF Express, and enhance investor confidence.
Since the spin-off, SF City has received investment from many well-known institutions such as SAIF Investment Fund, New Hope, CITIC Capital, Legend Capital, Trust Capital, Goldman Sachs, BAI Capital, etc.
Strengthen the network effect and scale effect SF Express’s imagination space in the same city
Although it has a promising business model and the blessing of a luxury capital team, it is still difficult for SF Express to avoid the risk of stock price fluctuations after its listing. Looking back at the capital market of the logistics industry this year, JD Logistics suffered a decline in market value two months after its listing, and the stock price of the entire express industry also showed a downward trend. Many logistics companies also experienced breakouts immediately after listing.
The industry believes that this is also related to the ongoing downturn in the Hong Kong stock market. There is a fierce game between market sentiment and corporate fundamentals. Changes in stock prices in the short term are often the dominant factor in market sentiment, which will cause some companies to appear in the short term. Break hair.
Regarding the question of “why choose to let SF Express go public in the current capital environment”, Wang Wei said at the listing ceremony that SF Express has all the conditions, is a good business model, and has a good team. “It’s okay to go public at any time, and we are more concerned about the company’s long-term value.” Wang Wei said.
It can be seen that the instant delivery market behind SF Express City is still growing rapidly, and under the existing instant delivery competition, third-party independent delivery platforms will also release greater competitiveness. According to data from iResearch, the annual order volume of the instant delivery service industry has risen from 4.6 billion orders in 2016 to 21 billion orders in 2020, with a compound annual growth rate of 46%. It is estimated that the annual order volume of China’s instant delivery service industry will increase to 64.3 billion orders in 2024, with a compound annual growth rate of 32.3% from 2020 to 2024.
Industry insiders believe that from the perspective of long-term strategic value, SF Express has three outstanding values compared to other similar companies that have been listed.
The first is the scarcity of independent third-party platforms. As the leading third-party ready-to-match, SF Express has no traffic competition with other platforms, so it is of course the first choice for other platforms. Whether it’s traffic giants such as WeChat and Douyin who want to direct traffic to e-commerce, or supermarkets, fresh food e-commerce, and community group buying platforms, they can work with SF Express at ease, even Meituan and Ele. For food delivery platforms, during peak hours, they also hope to have a third-party delivery platform to supplement their capacity. From this point of view, the strategic value of third-party distribution platforms is self-evident;
The second is the important significance for businesses. Third-party platforms can enhance the voice of merchants and better compete with the platform; at the same time, relying on SF’s reputation, standards and customized product system, SF City can help merchants achieve better service differentiation and build brand reputation Closed loop with flow;
The third is the flow advantage of SF Group. SF Express has accumulated a large number of express users and customer groups in the logistics field who pay more attention to timeliness and are more willing to pay for quality. The conversion of these users to SF Express will bring huge ToC market advantages to SF Express.
CITIC Securities analysts believe that merchants are strongly dependent on a single platform, and there will be problems such as increased platform commissions and service fees, and reduced service definition rights. Therefore, the existence of third-party instant delivery is reasonable and necessary. It can be seen that today’s platforms with immediate delivery capabilities in the same city are either large enough to dilute the cost, or they are commissioned by a third party. It is from this that SF Express has seen market opportunities, and has insisted on independent third parties since its establishment, and has gradually developed it into a unique advantage of the company.
The industry believes that the future prospects of third-party instant delivery include at least four scenarios, namely, local catering, intra-city retail, near-field e-commerce, and near-field services. With the help of SF Group’s huge resource integration capabilities and SF City’s own professionalism and efficiency, SF City is expected to achieve an average annual growth target of doubling the value of SF City. At the same time, the scale effect of SF’s intra-city operations will continue to appear, and SF’s intra-city will release greater potential after listing and continue to maintain high growth.Text/Zhao Wenqi
Daily economic newsReturn to Sohu to see more
Editor:
Disclaimer: The opinions of this article only represent the author himself. Sohu is an information publishing platform. Sohu only provides information storage space services.
.