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article produced by radar finance hongtu | edited by xiao sa | deep sea

bingex limited ("bingex"), which focuses on the one-to-one service model, recently submitted an f-1 document to the sec and started its listing process.

according to the prospectus, shanshuang started commercial operations in 2014. its founder, xue peng, was a returnee entrepreneur. at the beginning of its establishment, it focused on "c-end customer groups that are relatively sensitive to delivery quality and timeliness." as of the end of june 2024, shanshuo had approximately 2.7 million registered riders, covering 295 cities in china.

in the early stages of shansong's development, the company had intensive financing and attracted investment from many well-known institutions such as matrix partners, cdh investments and lei jun's shunwei capital. wang sicong’s pulse capital also participated in two flash investments in 2017. however, the company’s last financing news stayed in march 2021, when it was valued at about 13 billion yuan. by 2024, the valuation of shanfang on the hurun global unicorn list will only be 7.1 billion yuan.

in terms of performance, shanshuang recorded net losses from 2021 to 2022, which were 291 million yuan and 180 million yuan respectively. it was not until 2023 that it turned a profit, with a net profit of 110 million yuan. however, last year's profit was mainly due to the increase in government subsidies, and the operating profit related to operating conditions for the whole year was only 11 million yuan.

it should be noted that the industry believes that "one-to-one delivery services" such as flash delivery are at a disadvantage in terms of traffic and user stickiness. as giants such as express delivery, e-commerce and takeout accelerate their efforts to seize the market, even autonavi, didi, etc. players are all eyeing this piece of cake. there are more and more competitors for flash gifts, and the pressure is increasing.

the higher valuation is close to being cut in half

the prospectus shows that xue peng holds a bachelor's degree in information and computer science from north china university of technology, a master's degree in business information systems from royal holloway, university of london, an emba degree in finance from tsinghua university and a dba degree from cheung kong graduate school of business.

before founding shanshuang, xue peng founded beijing caichuang information technology co., ltd. in 2008, which developed the express logistics integrated service platform yimaili.

yu hongjian, the co-founder of shansong, previously served as project director of yimail, project manager of pactera, and senior software engineer of american system technology company.

in 2013, when the sharing economy was booming, xue peng started the entrepreneurial journey of shanshuang with his precise conception and operation strategy of his own products, and officially launched the app in july of the following year.

at the beginning of its establishment, shansong showed strong development momentum and received millions of start-up funds led by matrix partners china that year. tianyancha shows that starting from 2015, beijing tongcheng bing technology co., ltd., the domestic operating entity of shansong, began rapid financing. in the series b and b+ financing that year, the investors were jiuding investment, guangyuan growth fund and tiantu investment.

in 2015, thanks to huge subsidies from companies such as meituan and ele.me, the volume of food delivery business grew rapidly. however, flash delivery did not “side” in the food delivery battle. it still insisted on a non-order delivery model and only served one person per order. .

yu hongjian said in an early interview that shansong has achieved a compound annual growth rate of 300% for five consecutive years since its establishment. investors have seen this growth, and growth is value.

subsequently, in 2016 and 2018, the company received 6 rounds of financing intensively, among which wang sicong's pusi investment followed the investment in the c round and c+ round, and hualian group and lei jun's shunwei capital led the c+ round.

after that, shansong stopped financing and began preparations for listing. in 2020, the company's vice president du shangxiao said in an interview with the media that the company may be listed soon.

but in the end, dada group took the lead and successfully landed on nasdaq, becoming the “first instant delivery stock”. subsequently, at the end of 2021, sf express also landed on the hong kong stock exchange.

shanshuang’s latest financing was the completion of the d2 round of financing in 2021. the prospectus pointed out that in march, april and may 2021, shansong received 748 million yuan from the d-2 round of financing.

after this round of financing, shansong’s post-investment valuation reached us$2 billion, equivalent to approximately rmb 12.903 billion. however, the company’s highlight moment is also set here. starting from 2022, shanshuang’s valuation will begin to decline.

according to the hurun global unicorn list, the valuation of shanshuang in 2022 is approximately 10 billion yuan; by 2023, its valuation fell 31% year-on-year to 6.9 billion yuan. in 2024, the valuation of flash delivery has rebounded slightly, reaching 7.1 billion yuan, but it is still far from the level in 2021.

this time the company hits the u.s. stock market, the company's valuation may usher in new pricing. in terms of shareholders, before the ipo, sig haina asia held 9.7% of the shares and was the largest external shareholder; cdh investment and shunwei capital held 8.9% and 7.8% of the shares respectively, and the three parties had 3.2%, 2.9% and 2.6% of the voting rights.

in addition, the prospectus shows that xue peng, as the founder, directly holds 22.7% of the shares. at the same time, xue peng and his family hold 20.7% of the shares through the snoweagle-s limited trust, making them the largest shareholder.

the turnaround from loss to profit last year was mainly due to government subsidies.

it is reported that intra-city instant delivery is a logistics model born with o2o, which can achieve a delivery time of about one hour. important documents, cakes, flowers and near-field e-commerce have become the main service targets of the intra-city instant delivery market.

data from iresearch shows that from 2019 to 2023, the total market size of china's on-demand delivery market will grow from 164.1 billion yuan to 338.5 billion yuan, with a compound annual growth rate of 19.8%. it is expected to grow to 809.6 billion yuan at a compound annual growth rate of 19.1% by 2028. as a result, on-demand delivery has become one of the fastest growing industries in china.

the prospectus also reveals the current development status of shansong. as of june 30, 2024, the company had approximately 2.7 million registered riders, and its services covered 295 domestic cities. data from iresearch shows that in 2023, shanshou’s market share in domestic independent on-demand dedicated express delivery services will be approximately 33.9%.

the number of orders for flash delivery has also grown steadily in recent years. in 2021-2023 and the six months ended june 30, 2024, the platform fulfilled 159 million, 213 million, 271 million and 138 million orders for individual and commercial customers respectively. orders. during the same period, it took an average of 35 minutes, 31 minutes, 29 minutes, and 27 minutes to complete local delivery orders.

in terms of revenue, in the past three years, shanshou achieved revenue of 3.04 billion yuan, 4.003 billion yuan and 4.529 billion yuan respectively, with year-on-year growth of 31.68% and 13.14% respectively in 2022 and 2023. in the first half of this year, shanshuang achieved revenue of 2.285 billion yuan, with year-on-year growth falling to 7.65%.

in addition, for the years 2021-2023 and the six months ending june 30, 2024, the net profits of shanshuang are -291 million yuan, -180 million yuan, 110 million yuan and 124 million yuan respectively.

profit was achieved for the first time in 2023. shansong explained that the profit in 2023 was mainly due to the increase in government subsidies, which caused other income to increase from 9.2 million yuan in 2022 to 74.32 million yuan, and the operating profit related to operating conditions was only 11 million yuan. .

it is not easy to make a profit through flash delivery, which is directly related to the company’s high fulfillment costs. the prospectus shows that during the reporting period, the salaries and incentives paid to shansong staff by shansong accounted for 90.5%, 90.3%, 87.8%, 87.9% and 85.4% of their income respectively.

under the "one-to-one" business model of flash delivery, the entire service process from picking up the item from the sender to delivering the item to the recipient is responsible for one flash delivery person, and one flash delivery person can only after accepting an order, no other orders will be accepted until the current order ends.

it is not difficult to understand that this model brings higher delivery efficiency and better experience, but it also means higher delivery costs.

based on rough calculations of annual revenue and order numbers, in 2021-2023 and the six months ending june 30, 2024, the average revenue per order of flash delivery is 19.1 yuan, 18.8 yuan, 16.7 yuan, and 16.6 yuan.

the higher fulfillment costs and the gradual decline in unit price per customer have also brought challenges to shansong's business model. taking the first half of 2024 as an example, flash delivery has continued to make profits, with a net profit of 124 million yuan. based on 138 million orders, the average net profit per order is less than 0.9 yuan.

according to industry commentator zhang shule, in the labor-intensive express logistics field, it is difficult to reduce high labor costs simply by relying on simple digital management and flat channels. as a new track, intra-city business requires higher manpower intensity and frequency, and is more difficult to solve with traditional management.

he believes that the best way is to develop more optimal solutions in artificial intelligence, big data and unmanned vehicles, so that manpower can exert the highest efficiency with the lowest configuration, and rely on equipment such as unmanned vehicles to have more scenario possible. however, for now, these solutions are still too science fiction.

there are many industry giants and fierce competition

in the instant delivery industry, there are currently two distinct delivery models. one is the single-order delivery model represented by the b-side as a service; the other is a one-to-one express delivery model represented by the c-side as a service. such representatives include flash delivery. delivery, uu errand delivery, dada and sf express within the city.

data from iresearch shows that the independent on-demand dedicated line express market to which shanshuang belongs is expected to grow from 15.6 billion yuan in 2023 to 53.2 billion yuan in 2028, with a compound annual growth rate of 27.8%.

in this market segment, shanshuang is china's largest independent on-demand dedicated express delivery service provider as measured by revenue in 2023, with a market share of approximately 33.9%.

but the small but beautiful cake in front of shanshuang is facing encroachment by giants. on the one hand, shansong’s original opponents are increasing their investment. in may of this year, jd.com announced the comprehensive integration of its jd hourly delivery and jd daojia, launching “jd instant delivery” to further improve the timeliness. sf express is also backed by a large platform. it is not limited to dedicated express delivery services, but also has customer acquisition methods such as orders assigned by the platform and merchant advertising.

on the other hand, many forces are involved in the real-time delivery track. in addition to express delivery, e-commerce and takeout giants such as cainiao and meituan, which are constantly increasing their investment, new players including didi, lalamove and amap are also targeting got this cake.

because for users, they may not have the concept of "independent on-demand express delivery". when there is a need for intra-city delivery, they can deliver documents instantly through hummingbird delivery, meituan errands, or any accessible intra-city delivery service.

the actions of these giants are enough to show that the boundaries of the current instant delivery market are becoming increasingly blurred, and the phenomenon of cross-border layout is increasing. for shanshuang, it not only has to face competitors such as dada and sf express, but also challenges from cross-border players such as jd.com, meituan, and cainiao.

zhao xiaomin, an expert in the express delivery industry, believes that after solving the listing problem, shanshuang will face important changes. in addition to being in the competition system of "one-to-one" special delivery, shanshui is also in the instant delivery of meituan and ele.me. the competition system, as an independent third party, how shansong adjusts its strategy, and whether the next step is to develop steadily or transform into a radical model, are the choices it must make.