The express shipping industry has experienced a slowdown, which may in turn impact players in the field such as BEST.
Courier Company BEST (Chinese: 百世集团, BEST:NYSE) announced its first quarter results for 2022, which shows a decrease in revenue year-over-year of 35.2% to CNY 1.8 billion. The unsatisfactory performance may be attributed to reduced Ucargo business.
The firm is an integrated smart supply chain solutions and logistics services provider that mainly operates in the Chinese and Southeast Asian markets. It offers a comprehensive set of logistics and value-added services including freight delivery, supply chain management, and global logistics.
According to its fiscal report, the firm experienced a gross loss of CNY 76.8 million in the first quarter of 2022, down 32% from the same period of the previous year. The decrease may be due to the downsizing of the BEST Capital business line and higher unit costs for the freight business.
Moreover, the company continues to lose money. In 2022 Q1, BEST recorded a net loss of CNY 380 million, compared to CNY 190 million in the same period of the previous year. Therefore, its net loss has expanded 98.7% year-over-year.
However, it is worth to note how the market performed during the first quarter. The overall business volume of the national express shipping industry declined. This may have an indirect influence on the firm’s freight volume, which also dropped by 13.5% year-on-year.
The express shipping industry are fill with large players. Domestic rivals include Depon Express (Chinese: 德邦快递, 603056:SH), ZTO Fright (Chinese: 中通快运, ZTO:NYSE) and SF Express (Chinese: 顺丰快运, 002352:SZ). International competitors such as FedEx (FDX:NYSE) and UPS (UPS:NYSE) also pose threats, although only to a small extent.