"just pay a few dollars from time to time", your "procrastination" made fengchao earn over 800 million yuan!
2024-09-11
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the parent company behind the fengchao express lockers that you often see in residential communities is going public.recently, fengchao holdings co., ltd. submitted an application for listing to the hong kong stock exchange, and the exclusive sponsor is huatai financial holdings (hong kong) co., ltd.
it is understood that fengchao's business is divided into three major divisions: express delivery terminal delivery service, consumer smart delivery service, and value-added service. while its business lines are constantly expanding, fengchao has launched a model of charging for overtime delivery of express lockers. previously, topics such as "should express lockers be charged?" have also been on the hot search many times.according to the prospectus, a rough calculation shows that in the past three and a half years, fengchao has collected a total of 808 million yuan in storage fees for stranded packages.
in this attempt to go public, is fengchao’s confidence based on consumers’ procrastination?
01 earned over 800 million in 3 and a half years
according to data from frost & sullivan, based on the number of lockers and parcel volume in 2023, hive box is the world's largest smart express locker network operator.
the prospectus shows that as of may 31, 2024, fengchao has provided services to 368 million consumers and 3.5 million couriers. the number of parcels delivered by its express delivery service will be 6.204 billion, 5.823 billion and 6.463 billion in 2021, 2022 and 2023 respectively.
△picture source: fengchao prospectus.
in 2020, fengchao began to charge users for temporary storage fees.temporary storage fees are also known as free storage fees or detention fees. fengchao stipulates that there is an 18-hour free storage period for in-cabin express delivery. after that, a fee of 0.5 yuan will be charged for every 12 hours, with a maximum of 3 yuan. the free storage service fee is not charged during statutory holidays.
although this regulation is controversial, it has improved fengchao's slot turnover rate.from 2021 to 2022, affected by the public health incident, fengchao's slot turnover rate dropped from 67.2% to 65.7%. from 2023 to the first five months of 2024, fengchao's slot turnover rate continued to increase, reaching 72.6% and 74.6% respectively.
it is reported that users can enjoy free overdue pickup and additional discounts by subscribing to a membership plan.membership plans are available on a monthly, quarterly and annual basis, with subscription fees of 5 yuan, 15 yuan and 55 yuan respectively. fengchao's customer service said that fengchao smart lockers can help members keep packages for free for up to 5 days. if they are not picked up for a long time, the courier will take them out and return them.
since 2021, the proportion of in-cabinet express storage fees charged by fengchao has continued to increase.the prospectus shows that from 2021 to 2023 and the first five months of 2024, fengchao charged storage fees for approximately 430 million, 460 million, 517 million and 208 million parcels stored in fengchao smart lockers, accounting for 6.9%, 7.9%, 8% and 7.5% of the total number of parcels delivered to fengchao smart lockers in the same period, respectively.
if calculated based on the minimum charge of 0.5 yuan, the storage fees collected by fengchao for stranded parcels from 2021 to 2023 and the first five months of 2024 were 215 million yuan, 230 million yuan, 259 million yuan and 104 million yuan respectively, accounting for 8.51%, 7.96%, 6.79% and 5.46% of the revenue in the same period.in the past three and a half years, fengchao has collected a total of 808 million yuan in storage fees for stranded parcels.
△consumers pick up logistics express packages from fengchao express lockers in the community. (photo provided by cnsphoto)
02 developing "sideline business" to turn losses into profits
but fengchao had once suffered huge losses.
the prospectus shows that from 2021 to 2023, fengchao achieved revenue of 2.527 billion yuan, 2.891 billion yuan and 3.812 billion yuan respectively, but its cumulative operating losses amounted to 2.960 billion yuan.it was not until the first five months of this year that fengchao turned a profit for the first time.
fengchao said that its improved profitability was mainly due to the significant increase in the profitability of express delivery services, the rapid growth of consumer smart delivery services and value-added services, and improved operational efficiency.
from the perspective of business structure, in addition to express delivery services, fengchao now also provides intelligent delivery services and value-added services to customers., among which value-added services include package storage-related services, advertising revenue on cabinets, cleaning services and home services. in 2022, fengchao successively added two value-added services, home life services and cleaning services, and gave strong traffic exposure on wechat mini-programs and fengchao app.
after adding cleaning services to users and businesses, fengchao's cleaning orders surged, soaring from 69,000 copies in 2022 to 548,000 copies in 2023.by the end of may 2024, the number of orders reached 962,000.in addition to fengchao’s self-built laundry factory in zhongshan, guangdong, there are also 135 third-party laundry factories that provide operational support for orders.
similarly, with a series of preferential marketing campaigns from fengchao, the number of orders for home repair, cleaning and other housekeeping services has also increased rapidly.as of the end of may this year, fengchao's home delivery service completed 71,400 orders.fengchao believes that such services can also increase sales opportunities for cleaning services.
at present, although express delivery service is still the mainstay of fengchao's revenue, the proportion of this business in total revenue has been declining from 57.6% in 2021 to 48.2% in 2023. by the end of may 2024, the proportion of terminal delivery service revenue has dropped to 40.8%.
boc securities said,judging from financial indicators, the company has achieved profitability, which means that its business model has been verified by the market.according to fengchao's development history, from laying out its own express lockers to acquiring zhongyou express and other express locker brands, it has completed its nationwide layout. in recent years, fengchao has focused on its own operations and research and development, comprehensively improving its network carrying capacity and market operation capabilities, and has become an integrated service provider for community life.
03 is the road to listing easy?
fengchao has always been known in the industry as "born with a silver spoon in its mouth."
in 2015, fengchao was jointly established by sf express, sto express, zto express, yunda express and prologis group. in the following years, except for sf express, several other express delivery companies gradually withdrew from the list of shareholders. however, fengchao has completed 11 rounds of financing, including well-known institutions such as china post, cdh investments, eastern bell capital, and sequoia china.as of now, sf express founder wang wei still holds more than 30% of the shares and has 48.45% of the voting rights.
fengchao’s latest round of financing, b4, was completed in january 2021, raising us$400 million.sf holding announced in january 2021 that hive box holdings limited was valued at us$3 billion before the investment. after the completion of the us$400 million financing, hive box's post-investment valuation was us$3.4 billion (equivalent to rmb 24.11 billion).
however, the capital market still has some doubts about whether fengchao's business can continue.one of the reasons comes from the long-standing controversy over whether express delivery lockers should be charged.
at present, many consumers have questions and opinions about the regulations on the storage of express lockers. consumers often express on social media: "the courier puts the package in the express locker without permission."
on march 1 this year, the "express delivery market management measures" were officially implemented, which stipulatesif anyone uses smart express boxes, express service stations, etc. to deliver express parcels without the user's consent, and the circumstances are serious, a fine of 10,000 to 30,000 yuan will be imposed.
similar regulations have put forward strict compliance requirements for smart express locker network operators such as fengchao. consumers have also raised many questions about the charging standards of express lockers. if the smart locker network business is unstable, fengchao will face greater challenges.
in addition, some industry insiders believe thatfengchao's existing business, other internet companies and property service companies are also developing, and internet companies have strong user stickiness, while property service companies have many offline connections,fengchao’s advantages are difficult to compare with other competitors.if fengchao wants to open up the market, it may only be able to rely on "price war".
judging from the listing situation within the industry, the leading companies are still cautious about going public.in march this year, cainiao, one of fengchao's strong competitors, decided to withdraw its listing application; sf express's secondary listing in hong kong has yet to produce any results; and jitu reduced the scale of its ipo fundraising when it went public in hong kong last year.
in this regard, fengchao holdings stated that the ipo will be mainly used to expand and optimize the smart locker network, strengthen the service capabilities and scope of value-added services, research and development, strategic investment, as well as working capital and general corporate purposes. (yu jiaxin)
china business news is compiled from china news service, poster news, shanghai securities news, etc.
