Although Anneng Logistics Group, one of the domestic express delivery giants, operates a express delivery network with the leading domestic LTL market, its market value has been declining and has continued to fall, attracting great public attention.
In November 2021, Anneng Logistics was listed on the Hong Kong Stock Exchange. The closing price of on the day of listing was at at 13.48 HKD/share, with a closing market value of 12.9 billion yuan. As of October 14, Anneng Logistics had a closing market value of HK$2.27 per share, and its closing market value was only RMB 2.38 billion, which was only 18% of the market value on the day of issuance.
According to the 2022 interim performance report released by Anneng Logistics, operating income was 4.139 billion yuan, a year-on-year decrease of 8%, mainly due to the reduction of the total LTL freight volume from 5.8 million tons in the same period last year to 5.4 million tons, and the unit price of LTL transport services decreased from 460 yuan/ton in the same period last year to 448 yuan/ton. The net loss attributable to the parent company was 175 million yuan, compared with a net loss of 2.661 billion yuan in the same period last year; the basic earnings per share of was -0.15 yuan, and the total assets at the end of the period were 6.329 billion yuan. The report pointed out that the overall performance of Anneng is affected by objective factors such as the epidemic and has declined in 2022.
Mr. Wang Yongjun, Chairman of Anneng Logistics, said that in the first half of the year, Anneng faced the high uncertainty of the epidemic and future environmental changes, and took various measures to maintain the quality of products and services and the ecological health of the platform, showing extremely high resilience. "We believe that these measures will help maintain our long-term competitiveness and development prospects. Although the market environment remains severe in the foreseeable future, we firmly believe that we can continue to strengthen our market leadership."
Although Anneng is full of confidence and is very affirming of its future leadership in the market, it is an indisputable fact that the stock price is disparaged in the capital market and its market value has severely shrunk. So what exactly makes Anneng, who is so energetic at the beginning of listing, was so embarrassed?
Shuangyi believes that the most core key factor is that Anneng's own strategic direction has deviated.
Anneng was originally a regional dedicated network, and only operated 4 shuttle routes. In the early stage, Anneng realized that it was developing with a platform-based approach and gradually built a comprehensive development and operation platform for peers and franchisees. The cooperation model includes various methods such as peer delivery, franchise agent, franchise stores, franchise areas, etc.
from dedicated line integration to franchise expansion, it can be said that Anneng has been constantly exploring the operating model that is most suitable for its own and market environment on its development path.
Therefore, Anneng overtook the bend after just over ten years of its establishment and became one of the leading LTL enterprises in the industry, mainly thanks to the stable and excellent management system under the help of capital and the precise strategic vision of the founding team.
And the strategy must adapt to development. In terms of business, the volume of goods is pursuing "trust volume is king". Through effective policies such as incentives, the volume of goods has grown rapidly. However, with the changes in the market situation in recent years, we still blindly pursue goods, and it is inevitable to lose sight of one thing, which is unfavorable to control factors such as cost, efficiency, and quality, and continue to lose money, entering a non-better development cycle.
The external environment is also recession on Anneng.
Now Hong Kong stock has fallen to a "blushed nose". From around 28,000 points in the second half of 2021, it has been running down like a roller coaster. As of October 14 this year, Hang Seng Index has fallen to around 16,500 points. The stock market has recently been the lowest point in 11 years, and it has even lowered to a point that is basically the same as in 1997.
is not enough to be overturned. A total of 25 warehousing and logistics companies are listed on the Hong Kong stock market, all of which are on the main board or GEM . In terms of quantity, 25 companies account for 0.97% of all listed companies in Hong Kong; in terms of market value, the total market value of these 25 companies reached HK$320.8289 billion, accounting for 0.90% of the total market value of Hong Kong listed companies of HK$355.907 billion. Affected by market , in the past year, only 7 of these 25 companies maintained the increase and the same rate of and the same rate, while 18 companies fell, with an average drop of -33.40%. The overall downturn in Hong Kong stocks makes it difficult for logistics stocks to go against the trend, so it is understandable that Anneng's stock price is so terrible.
Changes in the industry internal environment have affected the stability of the pattern.
The express delivery and LTL industry in which Anneng is located is currently in a reshuffle. According to the analysis of the company rankings in the industry, the industry leader SF Express has reached a revenue of 30.23 billion yuan. The second place is the new "dark horse" , which surpasses the express , with an annual revenue of 11.3 billion yuan, and the third place is , Debang Express , with an annual revenue of 10.68 billion yuan. The above two or three giants were acquired and controlled by JD in 2020 and 2022 respectively. In addition to these two companies, JD.com's own express delivery business ranks sixth in the industry, with annual revenue reaching 6.7 billion yuan. The fourth place is Anneng, the fifth place is Yimi ticking , and the financial owner behind Yimi ticking is also Jitu. From this point of view, in the current express market, three of the top six players belong to the JD camp. Based on the comprehensive calculation, the operating income of the JD group's LTL operating income has reached 28.68 billion yuan, which is close to the industry's No. 1 SF Express , and the rest of the market share is divided by Anneng and Yimi Ticai.
my country's express service brand concentration index CR8 is 80.2%, which means that the top eight players in the market account for more than 80% of the market share. In comparison, the LTL Express market, according to industry statistics, the market size of China's LTL industry in 2020 is about 5 times that of the US market. The market share of the top ten LTL companies in the United States is 74%. During the same period, the market share of the top ten domestic LTL networks was only 5.7%. The market size is large, the market concentration of is low, and the number of players participating in the market is large. This pattern is a huge blue ocean market for leading companies, which naturally attracts giants to join the market. Based on this, future leaders will be concentrated and market integration will be an inevitable trend.
As more and more "disruptors" join, the competition for the express delivery market has become a tempting "dangerous game". If you are not careful, you will lose your market share. The alone army seems to be a little weak in the complex industry melee, and the situation seems to be extremely variable to the viewers.
In summary, under the dual influence of the weak stock market and the upcoming changes in the industry, AEN did not let the capital market see that it has enough courage and ability to change its inherent operating model, so the market value has plummeted. Although it is unexpected, it can be said that it is reasonable.
As the saying goes, blacksmiths need to be strong by themselves, just like the catch-up target set by Anneng, the industry benchmark of the American ODFL company, continues to make all their energy available, focus on the LTL business, cultivate their own internal strength in place, steadily, improve and upgrade infrastructure, and improve operational efficiency through digital tools. There will naturally be equal returns under fine polishing and iteration.
Anneng once rashly chose to enter the express delivery red ocean market in 2016. After hitting a wall, he immediately left the market and stopped loss in time. The management team showed excellent error correction ability. Now that the strategic choices are deviating again, we continue to pay attention to whether Anneng can get back on track again. (Shuangyi Consulting)
