The 2020 Report Card Of SF China Telecom Two Giants Released: The Secret War Behind The Number

On March 17 and 18, express giants SF and ZTE successively released financial reports and handed over their transcripts in 2020.

According to the financial report, SF has achieved high growth in both revenue and profit, with its revenue share climbing to 17.5% of the whole industry, and the profit is even the sum of the latter several express delivery companies. The market share of Zhongtong's package volume increased by 1.3 percentage points to 20.4%, which once again held the first place in the market share. But the price of this share is at the expense of profits: China Telecom's net profit in 2020 will drop by 23% year-on-year.

SF first handed in the report card. The company's revenue in the past year was 153.987 billion yuan, up 37.25% year on year. The net profit attributable to shareholders of the listed company was 7.326 billion yuan, up 26.39% year on year. According to the financial report, SF achieved 8.137 billion pieces in 2020, an increase of 68.46% year-on-year, and the market share increased to 9.76%, 2.15 percentage points higher than that of the previous year. It is worth noting that in 2020, SF's revenue accounted for 17.5% of the total revenue of express delivery in China, which was higher than 14.9% in 2019. It became a real express brother, and its revenue and profit growth in 2020 exceeded the national average level.

On March 18, China Telecom also disclosed its achievements, which were slightly inferior. In 2020, Zhongtong achieved a revenue of 25.214 billion yuan, a year-on-year increase of 14%; a net profit of 4.326 billion yuan, a year-on-year decrease of 23.7%; and a gross profit of 5.837 billion yuan, a year-on-year decrease of 11.8%. However, Zhongtong's market share is still expanding. In 2020, the express business volume will reach 17 billion pieces, with a market share of 20.4%, ranking first in the industry and more than double the market share of SF.

In the fourth quarter, the largest volume of express business, Zhongtong's revenue reached 8.257 billion yuan, up 20.6% year-on-year, but its net profit was only 1.29 billion yuan, down 44.3% year on year. Cheng Ji, head of the media affairs department of Zhongtong express, explained to the 21st century economic reporter that the main reason is the intensified competition in the industry and the increase of subsidies. "In the future, ZTE will pay more attention to maintaining and expanding its own competitive advantage, and continue to maintain a leading position in balancing market growth, profit and service quality. On the premise of maintaining profits and service quality, we should accelerate the acquisition of market share. " Cheng Ji said.

"In 2020, with the entry of new market entities and the intensification of scale expansion of traditional enterprises, the price war is particularly prominent. For China Telecom, it is necessary to fight a battle to keep its leading position in order to maintain its leading position in scale." Yang Daqing, expert member of China Federation of logistics and purchasing.

Yan Huiping, chief financial officer of Zhongtong express group, also said in the financial report that accelerating the growth of business volume and gaining market share is the most important goal in the current development stage of the company. As a result, China Express achieved a record business volume growth and increased its market share by 1.3 percentage points by reducing the single ticket price of its core express business by about 20%.

In fact, the price war in the express industry has not slowed down in the past year, but has become more intense. Jitu, Fengwang and Jingxi three companies joined the war, which had a great impact on three links and one access.

SF ticket volume will be greatly increased in 2020, which is related to the rapid rise of economic express. Many online shopping partners have noticed that in the past year, many of the goods bought on Taobao and pinduoduo, even if the customer price is very low, the final delivery is SF. It is reported that Shunfeng's traditional business sector includes time effective business sector and economic business sector. In the past year, the company's revenue reached 110.508 billion yuan, a year-on-year increase of 32.44%, accounting for 71.76% of the total revenue. Among them, the revenue of SF economic express reached 44.148 billion yuan, a year-on-year increase of 64%, and the business volume increased by 155.86%. It can be seen that economy has become an important reason for the rise of SF holding's traditional business sector in 2020.

The reporter learned that SF tried to operate economic products in 2012 and 2017, but the results were not satisfactory, and even dragged down profits and brands. Since May 2019, SF launched a new version of economic mail, and its business has grown rapidly. Looking back on the financial reports over the years, the revenue of SF economic express is only 26.9 billion yuan in 2019, while it will reach 44.1 billion yuan in 2020, which has exceeded the annual revenue of any express company with three links and one service.

"In 2012, SF was more exploratory in e-commerce products (or economic products), and did not make full use of the power of the whole network. It still sought to increase the value-added business parts, but later it was different." Yang Daqing pointed out that with the acceleration of service upgrading of Tongda system in recent years and the independence of Jingdong Logistics in 2017, surrounding enterprises are gradually encircling SF in the medium and high-end market. Shunfeng shifted from defense to counterattack, supporting the development of e-commerce parts with greater capital, network and other resources. At the same time, it also tried the mixed method of direct marketing and franchise in the business model, including the acquisition of Xinbang logistics and the launch of the franchise network Fengwang express. With the help of Shunfeng's brand advantages, it has made its rapid development in the high efficiency e-commerce parts market.

Yang Daqing also said that the current intensity of China's express delivery market is still not enough. Although the Chinese market may not be dominated by two or three super giants like the US and German markets, further integration is an inevitable trend. If SF wants to further win the e-commerce market and achieve scale and efficiency leadership in the competition of digital and intelligent logistics, it is not a good choice to rely on its own expansion , may further expand the lead through acquisitions. The acquisition of high-quality resources in the future may be the main reason for SF to further affect the market structure of China's express delivery.