turning point has reached. After completing Kerry Logistics Holdings, the revenue of SF is enough to approach the Fortune 300 in the world, and is also leading China's logistics to get better and better.
This Wednesday, Hurun Research Institute released the "2021 Hurun Rich List". A total of 16 people in the express logistics industry were shortlisted, but the rankings all declined. SF Holdings Chairman Wang Wei also dropped by six places, but it still remained at tenth.
And Wang Wei's listed companies will also reach four this year. They are SF Holdings, SF Real Estate Holdings, which was listed in May this year, Kerry Logistics, which was acquired, and SF Express, which has submitted its prospectus.
1 On the evening of October 28, SF Holdings released its third quarter report this year, showing that its revenue in the first three quarters reached 135.86 billion yuan. However, for this financial data, only the assets have been consolidated with Kerry Logistics, but this has also increased SF Express's total assets by 71.44%, reaching 190.569 billion yuan.
However, based on factors such as the epidemic, international logistics freight costs have soared this year, which has also caused Kerry Logistics to make profits soaring by 2.15 times in the first half of this year. GF Securities analysts predict that Kerry logistics revenue will reach HK$67.6 billion (about RMB 55.5 billion) this year. Huachuang analysts expect that after the consolidation, SF Express's revenue this year will reach RMB 191.3 billion.
Source: GF Securities Research Center
Source: Huachuang Securities
Rogo.Logo.Logo.com.Logo.com.Logo.com.Logo.com. It is also estimated that after completing the holding of Kerry Logistics, SF Express's revenue this year will be expected to reach about 200 billion yuan, which is enough to rank among the top 500 and approach the top 300 in the world.
From the list of global companies released by Forbes in May this year, Rite Aid, ranked 500th, had operating income of US$24 billion (about RMB 153.2 billion), and Mitsubishi Electric Co., Ltd., ranked 300th, had operating income of US$39.5 billion (about RMB 252.2 billion).
Although SF Express only ranked 510th at the time, SF Express obviously proved the efforts and resilience of Chinese logistics companies with practical actions.
01 Take the essence of Kerry
In February this year, SF Express issued an announcement stating that it will hold Kerry Logistics and acquire 51.8% of the equity for HK$17.6 billion (about RMB 14.5 billion). Finally, the entry procedure was completed this month and the shift was officially changed.
On the 13th of this month, Kerry Logistics issued a relevant announcement on the appointment of the chairman and directors, and SF Express Chairman Wang Wei officially took office as the chairman of the board of directors. In addition, Chen Fei (assistant CEO and acting CFO of SF Express), He Jie (only appointed as deputy general manager and financial director of SF Express in September this year) and Chen Yingshan (co-legal director of Kerry Group ) also served as non-executive directors.
Source: Kerry Logistics Network Co., Ltd. Announcement
Before SF Holdings, Kerry Logistics was originally affiliated with Kerry Construction Company, a subsidiary of the Kuo Henian family. It started with warehouse services. It was established in Hong Kong in 1981 and was originally named "Kerry Warehouse (Hong Kong) Co., Ltd.". After that, the business expanded from warehouses to the entire transportation logistics industry.
Source: GF Securities Research Center
013, Kerry Group (KGL) was split from Kerry Construction . Until SF Express changed shifts, Guo's Group was controlled by Kerry Logistics through Kerry Group. When the news of
was first announced, the secondary market responded violently. SF Express hit the daily limit less than half an hour after opening in A-share , increasing its market value of 47.8 billion yuan, with a total market value of more than 500 billion yuan. Kerry Logistics' stock price of in also rose by 32%.
In comparison, this time the capital market seemed very dull, but it was also expected. SF Express's overall stock price plummeted at the beginning of the year and almost halved, and from the day of this announcement to the close of this week, it even fell slightly from 67.9. In addition, Kerry Logistics also saw an increase of only about 1%.
message "flying" for too long may not be the main reason, but financial data is.
For the former, SF Express’s financial announcement this year did not give enough investors’ confidence, with a loss of more than 900 million yuan in the first quarter. Although it turned a profit in the second quarter, its net profit in the first three quarters is expected to decline by 70%. For the latter, the global supply chain has been blocked under the influence of the epidemic, and Kerry Logistics, which focuses on the international market, showed that net profit increased by 189% year-on-year, which has increased by nearly 50% at the end of August after the announcement.
Huachuang analysts started a series of research on SF Express since April last year, and continued to maintain their views in the "Decoding SF Express Series Research (15th)" released last month: "The company's turning point is basically established, the trend is clear, and it is in a strategic opportunity period for market value repair."
As the world's sixth largest freight forwarding company, even without the epidemic bonus, Kerry Logistics' strengths are exactly what SF Express needs.
Source: GF Securities Research Center
In addition, from the financial data, the "warehouse business in Hong Kong, China and Kerry Darong in Taiwan" sold by SF Express to Kerry Group is not so necessary for SF Express. In 2020, the operating profits of the company's international freight forwarding , logistics operations ( contract logistics ), and Hong Kong warehouse were HK$1.017 billion, HK$2.095 billion and HK$487 million, respectively.
For the sale of business in Taiwan, Lin Jichang, from the Department of Transportation and Logistics, Fengjia University, Taiwan, told Rogo Logistics Salon: "Kerry Darong mainly transports high-tech industries in Taiwan, Taiwan. Although its profit margin is the highest among all businesses last year, in the long run, development is more likely to encounter the ceiling."
Source: GF Securities Research Center
The main reason is that thanks to the dense supermarket network, residents in Taiwan, China choose Japanese supermarkets to send ordinary light goods, and logistics companies that are deeply bound to them are naturally higher in use, while those who use large goods will use post offices. "So after this acquisition, Kerry Darong and SF Express will provide each other with better land transportation services through their respective advantages in transportation." Teacher Lin Jichang added.
In addition, it is worth adding that in July this year, the Taiwan Stock Exchange of China also failed to issue an equity announcement on Kerry Darong in a timely manner, and imposed a liquidated damages of New Taiwan dollars 30,000 (about RMB 6,000). It is considered a matter of Article 4, Item 1, Paragraph 1, Article 4, Item 1, Article 4, Item 1, Article 4, Item 1, Article 4, Item 1, Article 4, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, Item 1, It "
Based on the reasons of approximation, handling Hong Kong warehouse business in the same way is indeed the best solution for SF Express.
Therefore, it can be said that SF Express has obtained the most important part of Kerry Logistics for it.
02 Using UPS as the mirror
as the world's largest express delivery company, UPS has long represented the upper limit of this industry: it ranks 165th in the world's enterprise ranking, with a market value of about 160 billion US dollars, with a fleet of more than 200 jets, connecting 220 globally Business outlets in many countries and regions.
. In the minds of many Chinese practitioners, SF Express is China's UPS to some extent. There are many similarities between the two, and the relevant reports and analysis are emerging one after another, but they are mainly divided into horizontal and vertical angles.
horizontal experience originates from history.UPS has been around for a hundred years, and its growth path is complete and traceable:
- 907-1913 Founded the message delivery service
- 913-1918 Carry out retail delivery business
- 918-1930 Entering the era of public carriers
- 930-1975 Service expansion and transformation
- 975-1990 Develop UPS airlines and focus on the international market
- 990-1999 Continue to innovate
- 999-2010 Global Trade and Development
- 010-2021 New Era of logistics
transformed from transportation and delivery to public carriers, from establishing an airline to building an airport to expand the global market, and then to transforming supply chain service , every key turning point of SF Express is similar to UPS.
vertical experience comes from business. It is not only a express delivery company, but also a supply chain service company.
Huachuang analyst quoted Feder 's annual report in 2000 in SF Express's : "Examples are the best way to explain the concept of the connotation of the supply chain." This will better explain how the supply chain, a relatively abstract business, has become a comprehensive integration model and generates blood for enterprises.
At the same time, analysts also regard the supply chain service structure as six major industries and four cornerstones, and use several specific enterprise examples as supplementary explanations:
Six major industries: medical and health, high-tech, aerospace, fast-moving consumer goods, industrial products, automobile
Four cornerstones: warehousing, distribution, after-sales support, transportation management
Source: Huachuang Securities
Source: Huachuang Securities
Source: Huachuang Securities
Comprehensively look at Of course, UPS is beyond reproach, but it is not so easy to try to observe SF Express and further understand the rise and fall of gains and losses.
For the former, the development history of the express delivery industry in China and the United States cannot be directly equated. The most intuitive thing is the length of time. The US transportation and logistics industry has been developing for a long time, so every change in the competitive landscape has almost been caused by major technological changes.
- 9th century and the early 20th century, the American express oligarch in the railway era was Adams express, American Express , Wells Fargo and American Express
- 930, road transportation gradually became popular. PS took advantage of the trend and became the new leader
- 70s, the supply of high-end services for air express delivery increased significantly. Fedex, which started with air transportation, became the new leader
- 80s, entered the information technology era, and Amazon logistics joined, competing with UPS and Fedex.
For the latter, SF Express’s express delivery and transportation business has not yet completely escaped from the price war, and has found a suitable position, and it must continue to focus on supply chain businesses with relatively low operating profit margins. The impact of the price war on SF Express is no longer necessary to describe. SF Express’s cumulative profits in the second quarter and the first half of the year decreased by about 40% and 80% respectively compared with the same period last year. If the one-time impact of the above-mentioned SF Express real estate-related businesses is excluded, SF Express's net profit (deducted non-operating items) in the second quarter will be reduced to about 1 billion yuan, a year-on-year decrease of 62% and 33% respectively compared with last year and in the same period of 2019 before the epidemic.
As for supply chain business, UPS and DHL financial data clearly show that the operating profit margin of the supply chain business segment is lower than the company's overall. According to the 2020 financial report data, UPS supply chain-related revenue accounts for 18%, but operating profit accounts for 12%.
Source: Huachuang Securities
However, Wang Wei had already said in the Investor Relations event at the beginning of the year: "If short-term profit pressure can be exchanged for long-term competitiveness, and there is a chance to build SF Express into an indispensable choice in the market, then it is willing to lower the profit margin expectations in the next 1-2 years. This is an important strategy."
This month, SF Express executives were in the event again, saying "How do the company view healthy operations and sustainable development?" The question said: "Healthy operations will have some key indicators, maintain rapid growth and have reasonable profit margins, and can benchmark with international peers; reasonable investment rhythm and scale, ROIC More reasonable; healthy cash flow , avoid blind investment; balance financial ratings, credit rating and other indicators, optimize financial costs, etc. ”
history has proved some SF Express’s prediction vision. For example, during the Spring Festival, when the epidemic was the most serious last year, free highways were passed, which theoretically was beneficial to logistics companies, but except for postal services, only the self-operated SF Express in third-party logistics company operated normally. Therefore, when the industry's overall operating income fell by more than 20% year-on-year, SF Express's revenue still increased by 10.64% year-on-year, and its business volume increased by 40.45%.
What's more, UPS history has proved that mergers and expansion are a powerful tool for transportation and logistics companies to expand their business scope: they have expanded their freight forwarding business through the acquisition of Flying Spur; they have developed e-commerce services through the acquisition of MailBox, Kiala NV, and i-Parcel; they have extended the supply chain finance sector through the acquisition of First International Bank of the United States.
. SF Express is the most unexpected surprise, but it is reasonable to be among the top 500 companies in Kerry Logistics.
03 SF Express’s future
1 On October 20, at the press conference on the economic operation of central enterprises in the first three quarters held by the State Council Information Office, SASAC of the State-owned Assets Supervision and Administration Commission of the State Council stated that it is necessary to "vigorously promote the professional integration of rare earth , logistics and other fields, effectively enhance corporate competitiveness through resource optimization allocation, and build a world-class enterprise with global competitiveness."
If you want to become a world-class enterprise in the true sense, you must not neglect inside and outside the logistics field.对内，需要确切落实行业规范法则，相应国家政府“共同富裕”的号召；对外，则需要在保持高营收水准的同时，不断去拓宽供应链物流公司的营业维度。
. Regarding the future development strategy, SF Express said in the aforementioned event: "It will not singlely benchmark against any domestic or international company. In the future, it will become the world's leading technology logistics company. The domestic main is time-efficient services, economic services and digital supply chains. The international mainly consists of bulk supply chains and cross-border e-commerce fulfillment. Each track will have its own benchmarking and development strategies. In the past, the core was at home and the international proportion will become larger in the future, and the international proportion will be more balanced. The company is committed to becoming a global leader, not only in scale and market value, but also in healthy operation and sustainable development."
SF Express certainly has the confidence to speak.
In domestic business, SF Express has always been in compliance with regulations and does not participate in malicious competition at low prices. This is also a good example for the entire market. Work hard will have results. Industry insiders have always recognized SF Express’s efforts, and the capital market has also given SF Express a valuation of 300 billion yuan.
in international business, completing the holding of Kerry Logistics, and the current opportunity period for cross-border e-commerce, is also pushing SF Express to the next level.
According to the capital market data, there are currently logistics companies in China with a market value of 100 billion yuan. In addition to SF Express, there are only ZTO Express , JD Logistics and Zhongyuan Overseas Control .
According to the financial report data for the first half of this year, ZTO Express's revenue was 13.798 billion yuan dragged down by the price war, JD Logistics' revenue was 48.4 billion yuan for the first time after its listing, while COSCO Shipping, which was affected by the highly prosperous maritime market, reached 139.264 billion yuan.If Kerry Logistics' revenue is calculated, SF Express's revenue in the first half of the year will be approximately 91.08 billion yuan, which is not far from China COSCO Shipping.
Since this month, the third-quarter financial report data of various companies have been released one after another. COSCO Shipping's revenue reached 231.48 billion yuan, and SF Holdings, which is under Kerry Logistics, should still be far from it, but there will be no big difference.
According to Huachuang analysts' estimates, SF Express will return to a relatively normal level in the fourth quarter of this year, and the company's net profits in 2021-23 will be 40, 68, and 9.8 billion respectively. "
This means that the business is more comprehensive and SF Express, which completely acquires Kerry Logistics, will soon become the true king of Chinese logistics.
Huachuang analysts believe that To B supply chain market will be in the future 3-5 The year will usher in an important opportunity period. The considerations are based on: the supply side of
- , the supply side of
- , which greatly improves the standardization of logistics factors, and builds the foundation for the great development of the supply chain model; the demand side of
- , customers have diversified demands in the face of changes in channels, products and brands, and proposes that the supply chain system from production to distribution side. Higher requirements.
This is of course also the direction that SF Express continues to work hard. For SF Express, becoming a world-class supply chain logistics company is a road that has already begun.
It is difficult but correct.
Author | Liu Shenglin
Source | Logistics Salon
This article is the author's personal opinion and does not represent the position of logistics salon
