After the performance storm, the “first brother of express” S.F.Holding Co.Ltd(002352) (002352. SZ) achieved a sharp increase in revenue in the fourth quarter of last year through acquisition, but it is still difficult to recover the sharp decline in annual profit.
On January 28, S.F.Holding Co.Ltd(002352) released the annual performance forecast. The company expects to realize the net profit attributable to the shareholders of the listed company of 4.2-4.4 billion yuan in 2021, a year-on-year decrease of 40% – 43%; The net profit after deducting non recurring profits and losses was RMB 1.78 billion-1.93 billion, a year-on-year decrease of 69% – 71%.
Among them, the expected net profit in the fourth quarter is 2.4-2.6 billion yuan, an increase of 39% – 50% year-on-year; The net profit after deducting non-profit was 1.45 billion yuan – 1.6 billion yuan, with a year-on-year increase of 41% – 56%, setting the best performance in the same period since the company was listed.
Reviewing the annual performance of S.F.Holding Co.Ltd(002352) , the company’s performance in the first quarter of last year was thunderous, with a rare huge loss of 989 million yuan; The profitability recovered in the second and third quarters, with net profits of 1.749 billion yuan and 1.038 billion yuan respectively, but decreased by 38.73% and 43.49% respectively compared with the same period of the previous year. The performance soared in the fourth quarter, and the net profit in a single quarter accounted for more than half of the whole year, which was the only quarter with positive year-on-year growth in 2021. So, in 2021, S.F.Holding Co.Ltd(002352) what exactly happened between the sharp drop in performance and the sudden recovery?
For the year-on-year decline in 2021, S.F.Holding Co.Ltd(002352) mentioned four reasons: the company increased its investment in network resources such as site, equipment and transportation capacity; The increase in the number of employees and subsidies during the epidemic at the beginning of the year led to an increase in labor costs; The economic express delivery products with low price increase rapidly, which puts some pressure on the overall profit margin; In 2020, the company will enjoy more preferential tax relief related to national anti epidemic, and the policy will end in 2021. The above reasons are reflected in the company’s financial statements in the first three quarters.
It can be seen that the mistake of S.F.Holding Co.Ltd(002352) in business strategy is one of the main reasons for the decline of the company’s annual performance in 2021. Wang Wei, chairman of the company, also apologized for this. The pressure on the overall profit margin of the company reflects the “inner volume” situation of the whole express industry.
In the business segment of S.F.Holding Co.Ltd(002352) , time express, economic express and express are the main businesses, accounting for more than 80% of the company’s total revenue in 2020. Among them, time express contributes about 43% of the revenue and economic express contributes about 29%.
In recent years, with the increasingly fierce low price competition in the express industry, “express brother” S.F.Holding Co.Ltd(002352) has also been involved. The time express product with high single ticket income is the revenue pillar , of of the product revenue growth has lagged far behind other products {123456.
In the first half of 2021, S.F.Holding Co.Ltd(002352) actual effect express achieved a revenue of 46.161 billion yuan, a year-on-year increase of 6.50%; The revenue of economic express was 14.89 billion yuan, a year-on-year increase of 69.16%. At the same time, the proportion of actual express in revenue fell to 52.25% from 60.94% in the same period last year; The proportion of economic express revenue increased from 12.38% to 16.85%.
low pricing economy express rapid rise of undoubtedly put pressure on the overall gross profit of S.F.Holding Co.Ltd(002352) . in the first half of last year, the gross profit margin of the company’s express logistics and supply chain business (including time express, economic express, express, cold transport and medicine, intra city express delivery and international business) was only 9.93%, a year-on-year decrease of about 9 percentage points. From 2018 to 2020, the gross profit margin of this business was 17.84%, 17.39% and 16.37% respectively. The fierce competition in the industry can be seen.
S.F.Holding Co.Ltd(002352) also said in the semi annual report that the express logistics enterprises at the forefront of the industry continue to expand their business and network scope in various ways. External forces such as e-commerce platforms and social capital are accelerating their entry into the express logistics industry, further intensifying the competition in the market. If the company fails to timely adjust its business strategy and take effective countermeasures according to market changes, it may face the risk of slowing down business growth and declining market share.
However, with the introduction of policies to intervene in the vicious competition in the express industry, the overall single ticket income of the express industry has improved. From January to October 2021, S.F.Holding Co.Ltd(002352) express logistics single ticket revenue declined year-on-year, but the decline gradually slowed down. Taking the data of January and October as an example, in January last year, the single ticket revenue of the company’s express logistics business was 17.26 yuan / ticket, a year-on-year decrease of 12.39%, and the single ticket revenue in October was 15.92 yuan / ticket, a year-on-year decrease of 6.9%. The single ticket revenue in November and December achieved positive year-on-year growth, with an increase of 1.41% and 0.43% respectively. The company also said that the year-on-year increase in single ticket revenue of economic express products was one of the reasons for the performance growth in the fourth quarter.
Graphics: interface news
and the performance forecast also reveals another important information , S.F.Holding Co.Ltd(002352) the main reason for the positive year-on-year growth of the performance in the fourth quarter of last year is the consolidation of the performance ( 00636. HK) of Kerry Logistics.
On September 28, 2021, S.F.Holding Co.Ltd(002352) completed the acquisition of 51.5% equity of Kerry Logistics. Kerry Logistics’s core business includes integrated logistics, international freight forwarding and supply chain solutions.
After being incorporated into Kerry Logistics, S.F.Holding Co.Ltd(002352) supply chain and international business revenue soared. Reflected in the monthly operating data, the company’s supply chain and international business revenue in October, November and December 2021 reached RMB 8.747 billion, RMB 9.611 billion and RMB 9.109 billion respectively, with a year-on-year increase of 779.10%, 639.31% and 534.77%.
The highest revenue of the business in September was not more than RMB 1.2 billion. With the help of this business, the company’s annual revenue also exceeded 200 billion yuan for the first time.
China Galaxy Securities Co.Ltd(601881) securities also pointed out in the previous research report that consolidated Kerry Logistics is expected to contribute about 500 million yuan of profit to S.F.Holding Co.Ltd(002352) , and it is expected to contribute more than 1 billion yuan of net profit to the company every year in the next 2-3 years.
It can be seen that after the continuous setback of the express business, the international business may become the main growth point of S.F.Holding Co.Ltd(002352) performance. However, it is worth noting that the supply chain and international business account for a small proportion of the company’s revenue over the years. In 2020, the total business of this sector accounted for only 8.49% of the current year’s revenue; In 2018 and 2019, the proportion was only 3.33% and 6.91%.
So, after the sluggish growth of time express, can relying on the acquisition to temporarily stop the decline of S.F.Holding Co.Ltd(002352) performance turn the tide in the future by relying on international business? Can you keep the leading position in the express industry?
In the secondary market, with the decline of performance, S.F.Holding Co.Ltd(002352) share price fell sharply after hitting a record high of 124.06 yuan / share on February 18, 2021. As of the latest closing quotation of 63.35 yuan / share, the cumulative decline during the period exceeded 45%.
According to the recent announcement of S.F.Holding Co.Ltd(002352) , Liu Jilu, the supervisor of the company, has just completed a round of reduction. From November 1 to December 31, 2021, Liu Jilu reduced 14 million shares in total, including 1.26 million shares through centralized bidding, with an average reduction price of 69.25 yuan / share; 12.74 million shares were reduced through block trading, with an average reduction price of 65.09 yuan / share. Based on this calculation, Liu Jilu cashed out about 916 million yuan in this round of reduction.
