Background
SF has the most comprehensive business lines. Although its profit mainly comes from express delivery, its business coverage is not limited to express delivery. Therefore, we intend to start with SF Express, and at the same time we can deeply understand the specific profit model of express delivery, we can also perceive the development of SF Express from the express delivery industry to other transportation services, which will provide some basis for introducing other logistics enterprises later.
SF is currently the largest express logistics integrated service provider in China and the fourth largest in the world. The company started from the time-limited express delivery service, and built a layered express delivery business system with complementary time-limited parts and economic parts in the express delivery field through endogenous and epitaxial mergers and acquisitions. At the same time, based on the aging network, we will expand horizontally in the field of large logistics, create new businesses such as express, cold chain, city and supply chain, and form a comprehensive logistics ecosystem covering both home and abroad.
At present, SF Express has the most complete business line in the express logistics industry, and the comparison of business coverage with other companies is shown in the following figure. In express delivery, the main competitor is the three links and one access, but the overall competitive situation is different, and SF Express occupies the main share of the middle and high-end market. In other respects, SF's main competitors can be simply considered as Jingdong Logistics and Rookie Network for the time being.
from the perspective of revenue, SF's current time-limited express delivery is about 111 billion, economic express delivery is about 31 billion, the same city is about 5 billion, express delivery is about 25 billion, cold chain is about 111 billion, and supply chain and international business are also about 111 billion. Therefore, at present, SF Express business, supply chain and international business are its main revenue sources.
through the following analysis and irresponsible speculation, it is expected that in 2123, by reducing costs, the growth rate of SF Express will still be higher than the average of the express delivery industry (1111+311+51+251+111)*115%, and with the development of international e-commerce, the supply chain and international business will also bring about a larger growth of 111 * 111%.
SF was established in 1993. At first, it mainly engaged in inbound and outbound business express mail, which laid its service foundation of delivering documents and the basic requirements for "fast" timeliness. In 1997, SF began to expand from South China to the whole country, and in 2112, it transformed from the initial franchise network to the direct marketing network, establishing the difference between its business model and the access system. In 2119, SF Airlines completed its maiden voyage, and helped to launch international business in 2111, which also laid the foundation for aviation performance ability for subsequent SF Express parts. By 2112, SF Express had occupied a place in the middle and high-end express market through its direct mode and aviation performance ability.
with the rapid development of e-commerce industry, e-commerce components have occupied half of the express delivery market share in 2112. In the competition for the share of e-commerce parts, SF Express, a high-efficiency and high-cost model, does not have any advantages. Therefore, in order to share the growth dividend of e-commerce market, SF Express also began to try economic parts in 2113. The main idea is to reuse some resources with direct-operated aging parts to reduce costs and compete with Tongda.
since 2113, SF has joined the competition in the low-end market of express delivery business, and colleagues have also launched diversified business sectors such as express delivery, cold chain and city, which have diversified horizontally in the scope of large-scale logistics and transformed from a single express delivery service provider to an integrated supply chain logistics service provider.
in p>2117, SF listed on the A-share market, at the same time, it also started the merger and expansion of Zhang Zhilu, and all businesses began to mature. In 2118, SF acquired China cold chain business of Guangdong Xinbang Logistics and Xiahui Group, respectively expanding the territory of express and cold chain. In 2119, SF acquired the supply chain business of DHL China, which strengthened the domestic local supply chain capability. In 2121, SF acquired Kerry Logistics, the world's leading integrated logistics service provider, and integrated its powerful international logistics resources to expand SF's global network layout.
since p>2121, with the intervention of supervision in the price war, the profits of various express delivery companies have begun to recover, and the development model of SF has also changed from merger and expansion to refined operation. Next, we will analyze the current situation of various business lines of SF.
Express business
Express business can be mainly divided into high-end time-limited express delivery and low-end economic express delivery. At present, SF's revenue and profits mainly come from the time-limited express delivery business.
Time-limited express delivery turns to consumption and industry
For time-limited express delivery, the business mainly serves the efficient response needs of personal articles and industrial and commercial documents circulation, high-end consumption and production circulation. In the past, its income growth rate showed obvious positive correlation with GDP growth rate.
from the demand side, consumer and industrial aging demand is rising, and consumer has replaced document as the largest demand and incremental source of aging express delivery, and industrial aging parts contain long-term growth potential. At present, the main demand sources of time-limited express delivery business are documents, industrial time-limited parts and consumer goods. The express delivery of documents is declining year by year because most enterprises are developing in the direction of paperless office. In 2119-2122H1, the proportion of time-limited parts of documents dropped rapidly from 42% to 28%, and the proportion of income dropped from 31% to 21%. In 2122H1, the growth rate of document revenue was -4% year-on-year. Industrial and other aging parts mainly focus on the delivery demand of industrial parts, industrial materials, instruments and agricultural production, and mainly serve the delivery of manufacturing and agricultural production. The demand for industrial express delivery mainly comes from temporary demand and regular demand. On the one hand, the refinement and complexity of industrial supply chain leads to the rise of temporary demand, on the other hand, the development of B2B business of industrial e-commerce also brings the increase of regular demand.
in terms of consumer goods, the demand for high-end express delivery mainly comes from the e-commerce industry. When high-end goods or fresh goods are consumed online, the timeliness requirements for express delivery services will be higher accordingly, and the growth of this part also brings the demand for SF Express.
Therefore, on the whole, the proportion of documents in SF Express's time-limited delivery business is gradually decreasing, while the proportion of consumer, industrial and other categories is increasing.
economic express strategy adjustment began to make profits
SF Economic Parts focused on the e-commerce express market, and adopted the dual-brand operation strategy of direct network "SF Express"+joining network "Fengwang Express". Aiming at the mid-to-high-end e-commerce market, it focuses on the service reputation of "speed+temperature", and comprehensively improves the timeliness and competitiveness of e-commerce components and optimizes the customer experience with the direct sales advantage of "SF Express" brand. For the low-end e-commerce market, SF Express provides cost-effective products and services with the operation mode of "Fengwang Express" franchise network, and gradually expands the sinking market share. SF Economic Parts will improve the overall economic benefits of express delivery network mainly by cooperating with the peak and valley of redundant capacity of aging large network. At the same time, with the optimization and upgrading of the product structure of economic components, the unit price increase and marginal cost control will promote the profitability of economic components to be gradually realized. At present, due to the rise of live e-commerce companies such as Tik Tok and Aauto Quicker, low-end e-commerce express delivery is no longer monopolized by Ali, and SF has more opportunities to join the competition of economic express delivery.
in the initial stage of economic express delivery, due to low pricing and occupying more direct marketing resources, the profit of economic express delivery continued to lose money. In 2121, SF changed its strategy of economic express delivery, defined the timeliness, service, customer base and positioning division of aging parts and economic parts, and started the road of structural optimization. In 2121, SF will upgrade the standard land transportation products in the original economic parts to "SF Express" in the time-limited express delivery through product optimization, and gradually reduce the proportion of special offers in the economic parts, focusing on making the products better and stronger. SF has raised the signing unit price of electric trademark fast access to the network to above 7 yuan, and at the same time, it has relaxed the threshold of the number of signed pieces for a single customer, which has led to an upward profit quality of economic products and a gradual improvement in gross profit. Under this series of adjustments, the single-ticket gross profit of SF Direct Economic Unit has turned a profit in Q4, 2121, and has maintained a positive gross profit level for three consecutive quarters, and its profitability has begun to be realized.
Among them, SF Express, a direct operating system, continued to promote the construction of four-network financing, and saved 851 million yuan in cost in 22 years through cross-business financing in venues, operations, lines and terminals. Excluding Kerry's influence, the ratio of labor cost to income increased by 1.8pcts, the ratio of transportation cost decreased by 4pcts, and the ratio of other operating costs increased by 1pcts. In terms of transportation capacity, in the past 22 years, the company's headquarters directly recruited transportation capacity, upgraded the land transportation scene intellectually, used the hanging mode to save configuration, and used the intelligent control platform to monitor the car price. Although the transportation capacity per kilogram was flat year-on-year, excluding the impact of oil prices, the company's transportation capacity per kilogram decreased by 5% year-on-year. With the gradual stabilization of oil prices in the past 23 years, the decline of the company's transportation cost will be better reflected from the operating side to the financial side. In terms of transit, the company carried out equipment and process innovation, improved the fineness of sorting grid, and continuously improved its automatic sorting ability. In 22 years, the automatic sorting rate of small pieces increased by 8pcts, and the automatic sorting rate of single pieces increased by 21pcts, which promoted the per capita efficiency of small pieces to increase by 8%, and the daily processing capacity of small pieces in the whole network increased by 12%. At the end, the company promoted the direct distribution mode, involving 4811+ traditional outlets, adding 9811 face-to-face terminal sites, improving 1145 low-efficiency outlets, and reducing the proportion of low-efficiency outlets by 6pcts. In the past 23 years, with the deepening of four-network integration to multi-network integration, the impact of overlapping epidemic and oil price has been reduced, and the company has continuously released more costs to improve efficiency. Under the condition that the price end of 23Q1 is generally stable, the cost end has become the main contribution to the profit improvement, which has promoted the overall gross profit margin of SF Express to increase from 12.5% in 22 years to 13.9% in 23Q1, and the gross profit margin of 23Q1 in a single quarter is +1.6pcts year-on-year, laying a solid foundation for realizing the annual profit, and the annual cost improvement benefits can be expected.
supply-side barriers
On the supply side, SF Express has obvious speed advantages. When users have speed requirements for express delivery, they can only choose SF Express. At present, this advantage mainly comes from SF's sufficient number of self-owned cargo planes. With the operation of Ezhou Airport, the barrier of timeliness has been further expanded.
delivery in the same city
express delivery in the same city currently accounts for only a small part of SF's revenue, but it is also a relatively high-speed growth business at present. When I looked at the take-away industry before, it was mentioned that the main difficulty of Tik Tok's entry into the take-away industry lies in the capacity and timeliness of delivery in the same city, and some of it is to cooperate with SF.
From the demand point of view, instant delivery service keeps a high growth rate, and the penetration rate of third-party instant delivery service orders is also rising.
SF not only provides high-efficiency services in the same city distribution, but also provides various solutions for the same city distribution, covering various scenarios.
in p>2121, the actual average delivery time of SF Express in the same city is about 31 minutes. For the catering take-out scene with high timeliness, the average delivery time of the same city service is further reduced to 26 minutes. By the end of 22H1, SF Express's timeliness achievement rate remained above 95%, the timeliness reached stability, the volatility did not exceed 3%, and the order pick-up rate exceeded 99%. The high-efficiency and stable time-limited performance ability has established its brand image with high quality and strong guarantee, and made its number of high-value brand customers increase continuously. The number of brand customers it has served has further increased from 2,311 in 2121 to 2,911 in 22H1. Judging from the current growth rate, there is still room for growth in the same city business because of its small scale.
Express business
LTL is a term used in logistics transportation, which means that the goods that the owner needs to transport are less than one car. As sporadic goods, high transportation costs will be incurred during the period. LTL is relative to the whole vehicle. In the actual market operation, the division between LTL and vehicle is basically based on whether a vehicle can be filled. Usually, the solution is the service form that the carrier department collects the goods of different consignors at the same station and then ships them. Less-than-truckload transportation needs to wait for the whole car, so the speed is slow. In order to overcome this shortcoming, less-than-truckload buses with fixed routes and fixed time have been developed, and less-than-truckload delivery transportation with door-to-door service can also be developed by using the flexibility of automobile transportation. For example, "home delivery Toilet", which is widely used in Japan, belongs to this form. And * * * Speed has developed a number of LTL bus lines to meet this demand of enterprises. Taking the business outlets distributed in different areas of major cities as the receiving points and delivery points of LTL goods nearby, it greatly facilitates the LTL business needs of shippers.
China is the largest LTL market in the world, with the market scale reaching 1.5 trillion yuan in 2121. According to iResearch, the LTL market scale will reach about 2.1 trillion yuan by 2125.
At present, the domestic LTL market is highly dispersed, because its scale effect is not as obvious as that of express delivery, but from the experience of foreign countries, the market will gradually concentrate on the head.
compared with other express companies, SF's main advantage lies in the timeliness advantage of direct operation, and its unit price income will be higher than that of other franchised companies. In addition, more scenes can be covered by direct operation+joining score operation mode.
cold chain logistics
the development of fresh e-commerce and the upgrading of pharmaceutical supply chain drive the growth of cold chain logistics demand. From 2116 to 2121, the scale of China's cold chain logistics market climbed from 221 billion yuan to 418.4 billion yuan, and the total demand for cold chain logistics climbed from 25 million tons to 275 million tons, which doubled. With the vigorous development of fresh e-commerce driving the growth of cold transportation demand and the upgrading of pharmaceutical companies' supply chain stimulating the development potential of pharmaceutical cold transportation, experts from the National Development and Reform Commission predict that the scale of China's cold chain logistics market will grow to 897 billion yuan by 2125, corresponding to a compound annual growth rate of 1.8% from 2123 to 2125. At present, food cold transportation accounts for about 91%, and the remaining 11% mainly comes from medical logistics.
although it seems that the cold chain market is another trillion-dollar market, it is obviously different from express delivery in that the industry is relatively scattered. Although the market concentration is also rising, the CR111 (by revenue) has increased from 9.7% in 2115 to 18.1% in 2121.
SF Holdings and Jingdong Logistics ranked first and second respectively in the "Top 111 Cold Chain Logistics List of China" in 2119-2121 with their excellent service and timeliness. At the same time, ZTO Express and Yunda Co., Ltd., which are affiliated, also began to expand the national cold chain logistics network. SF Holdings has launched three major services in the cold chain sector, namely fresh delivery, cold food transportation and medical logistics. Relying on diversified products, high-quality network and comprehensive services, it is expected that SF's leading position in the cold chain business will be further consolidated.
international and supply chain business
after listing, SF successfully integrated resources by acquiring DHL domestic supply chain business and Kerry Logistics, making international and supply chain business its second largest business.
international business
in terms of international business, it mainly benefits from the growth of cross-border e-commerce business, and international business has increased greatly in recent years. It is worth mentioning that recently it is rumored that the main income source of the rookie network that is going to be listed is also international business. Here, we can make a comparative analysis after we have more detailed information.
integrated supply chain business
integrated supply chain business is mainly aimed at merchants.