The golden age of the express delivery industry is coming to an end.
In the past, express delivery companies that relied on low-price models to push prices to the extreme are facing the most severe test.
On March 22, Jitu Express, which was listed less than half a year ago, handed over its first report card since its listing. The financial report showed that the company’s total revenue for the whole year of 2023 was US$8.849 billion, compared with US$7.267 billion for the whole year of 2022. , a year-on-year increase of approximately 22%. The company processed a total of 18.8 billion packages throughout the year, an increase of 29% from 14.6 billion packages in 2022.
However, it is worth noting that despite the growth in business volume and revenue, the net profit suffered a huge loss, with the loss amounting to US$1.156 billion, or approximately RMB 8.36 billion.
It is reported that in the same period of 2022, Jitu Express’s net profit was US$1.573 billion, approximately RMB 11.37 billion. Faced with this "mixed" financial report, Jitu's stock price has already reacted in advance.
For the express delivery industry, low prices are not actually competitive.
In the middle of last year, Wang Wei, who has always been strong, chose to "bow down" and sold Feng.com to Jitu Express for 1.183 billion yuan. You must know that in the history of SF Express’s development, there are few precedents of selling its business, either shutting down or internally merging it. The sale of
Fengwang also heralds the end of the infinite competition model in the express delivery industry. It is no longer possible for high-, mid-, and low-end express delivery companies to conquer cities and territories through low prices. Even if there were occasional successful models in the past, there is a high probability that it will eventually become a "losing money and making a profit" business.
For Jitu Express, which started with the Internet model, it is time to end the model of burning money to change markets and increasing revenue without increasing profits. If we count from the high point, Jitu's stock price has fallen by more than 30%, and its market value has evaporated by more than HK$44 billion; if we count from its listing, Jitu has already broken through.
After the new express delivery regulations, low-price express delivery companies are being impacted, and the test of Jitu Express has just begun.
Jitu's "Kuai"
Internal fission and subsequent entrepreneurship are the unavoidable fate of every Internet company.
In 2015, Li Jie, the former head of Oppo’s Indonesian business, established this express delivery company in Jakarta, the capital of Indonesia.
Fortunately, this company caught on to the industry trends right after its establishment. With the rise of Southeast Asian e-commerce companies such as Shopee and Lazada, Jitu Express has become the largest express delivery company in Southeast Asia in just five years.
When the business in Southeast Asia became large-scale, Li Jie naturally focused on the "fat meat" of the domestic express delivery market, so Jitu Express began to "save the country" through curves.
In 2019, Jitu spent a lot of money to bypass Longbang Express to obtain a national express delivery business license and officially entered the Chinese market. In order to break through in the domestic market, Jitu chose to vigorously pursue mergers and acquisitions.
In March 2020, Jitu, which entered the domestic market, was like a "lone wolf", single-handedly initiating a price war in the entire industry.
According to media reports, in the early days, each ticket of Jitu was 1 to 1.5 yuan lower than that of the Tongda series, and the country's first shipping discount was 5 yuan, which was half cheaper than that of the Tongda series.
For this reason, Jitu is even more prepared to suffer losses for two and a half years. Of course, anyone who is familiar with Internet entrepreneurship knows that burning money to change the market is a consistent strategy of this type of enterprise.
In September 2021, Jitu Express acquired and integrated Best Express for 6.8 billion yuan, improving its domestic infrastructure, thereby increasing its production capacity limit and obtaining orders from Taobao e-commerce. Since then, Jitu has quickly completed its transformation with the support of emerging e-commerce platforms such as Pinduoduo, Douyin, and Kuaishou.
In November 2022, Jitu Express’s single-day parcel volume reached 50 million pieces. According to statistics, from 2020 to 2022, the compound annual growth rate of Jitu Express’ domestic parcel volume reached 140.2%.
The credit for all this is due to the low-price model's siege and large-scale mergers and acquisitions.
After that, Jitu Express, which was rapidly maturing, began to prepare intensively for listing. In May 2023, Jitu acquired Fengwang, a subsidiary of SF Express, for 1.183 billion yuan.
According to data, Jitu Express received a total of US$5.57 billion (approximately RMB 40.3 billion) in financing on the eve of its IPO, and Tencent, Hillhouse, and Sequoia are all its important investors.
On October 27, 2023, Jitu, which had been going smoothly all the way, was finally listed in Hong Kong. The issue price was HK$12.00 per share. It was the largest IPO in Hong Kong stock market in 2023. By the end of December, it surpassed ZTO Express to become the second largest express delivery company in China after SF Express.
Jitu’s “Mercury is in retrograde”
’s high point on the market is a “common problem” for many companies, and Jitu is not immune.
After entering 2024, Jitu began to enter the "Mercury retrograde" period.
On January 26, the official website of the State Post Bureau disclosed that Jitu Express was administratively interviewed by the State Post Bureau due to excessive heavy metals in container bags.
html In February, because of the Messi incident, Jitu Express was once again involved in the whirlpool of public opinion.Of course, these are just a microcosm of Jitu’s dilemma. What’s even more troublesome is that in its fourth year after entering the Chinese market, it is still struggling in the quagmire of increasing revenue but not profit.
According to its financial report, from 2020 to 2023, Jitu’s net profits attributable to its parent company were -US$565 million, -US$6.047 billion, US$1.656 billion, and -US$1.101 billion respectively. In other words, Jitu lost US$6.057 billion, or approximately RMB 43.8 billion, in four years. The main reasons for
’s losses are, first, that due to its scale, many businesses need to “burn money”. It will not be until 2023 that Jitu Express’s current situation of “delivering every order and losing every order” will begin to change. The second is that Jitu Express’s sales, general and administrative expenses are high. According to the latest financial report, Jitu’s “sales, general and administrative expenses” have almost doubled in 2023, soaring from US$1.095 billion to US$2.157 billion. .
Looking at the main business areas, the Chinese market, which contributes nearly 60% of revenue, is almost "making money at a loss", with a single ticket income of 0.34 US dollars, and the single ticket cost is also 0.34 US dollars. In the Southeast Asian market, which contributes about 30% of revenue, the revenue per ticket is declining significantly faster than the cost per ticket.
In addition, a more dangerous signal is that Jitu’s current stock price has broken. If buybacks and reclassifications are not considered, Hillhouse Capital, Sequoia China, Boyu Capital, Tencent Investment, etc. who participated in the A round and subsequent rounds Domestic and foreign star institutional investors such as d1 Capital and Temasek are currently experiencing floating losses. If these shareholders sell out immediately after the ban is lifted in the future, the impact on Jitu's stock price will inevitably be very large.
According to transaction data, currently, as many shareholders’ shares are still within the lock-up period, Jitu Express’s average daily transaction volume fluctuates around HK$50 million. For a listed company worth hundreds of billions, such a transaction is obviously It does not adequately reflect the current situation of the company.
refers to other Hong Kong listed companies. The lifting of the ban will generally cause drastic fluctuations in stock prices. Among them, companies such as Pagoda, Hongjiu Fruits, Keep, Feitian Yundong, etc. all experienced sharp declines due to the lifting of the ban. As the six-month lifting period is approaching, Jitu The danger of express delivery is approaching, and it will take time to verify whether it can escape this "curse".
