Q1 2021 BEST Inc Earnings Call
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In terms of volume.
<unk> improved the financial numbers into a multi.
Margin improvement.
And as well as the reduced.
A lot.
The current bottom line.
On a D.
E B, we do anticipating a southern countries a pool.
Towards the end of year, probably were reaching to a operating on.
On operating in a bottom line to be up to a net.
Zero or a possibility base expense.
It's a something next year, we will see a much better.
Also posted growth in bottom bottom line.
Thank you.
Once again, if you have a question. Please press Star then 1 on your touch time fine.
Your next question comes from Ronald Keung with Goldman Sachs. Please go ahead.
Thank you, Johnny and Gloria and team so I guess on.
2 questions..1 is you talked about the turnaround for expression 6 to 9 months just wanted hear what what is that your assumption behind.
And what is the target for that.
I assume the current pricing competitive environment or irrespective of that we just had this turnaround.
In profitability or in kind of more operational turnaround.
So when what would be more market share be more of a result of.
Hi, or that's also a part of the 6 to 9 months a pocket because as as.
As you had mentioned in the second quarter and maybe on a market share it could've been coming lower so a we mainly just focusing on profitability in that 6 to 9 months a turnaround time.
And then a nice.
Second question would be on al.
That talked about a different strategic evaluations financing options I just wanted to hear what has been mostly the challenges over the past day.
Months, a quarter or so.
Orders in looking into those options because we have seen companies on a N E filing.
To be listed there a freight matching platform sales of a power per listing so it seemed like a at least.
Comparable peers say off rate or of a best Chicago. These are.
People are tapping the debt capital markets through through these times. So I just want to hear what has been maybe some of the challenges and how.
<unk>.
Do we see the progress or future options ahead, and now we open to maybe even partnerships with any of a competitive. Thank you.
Sure.
Thank you Ron on its good to hear from you again.
For a first.
First a question on the a.
Got it wrong.
Yeah. So so as you can see a we.
If you see our expressed a on them I mean, we're basically from.
When we started on a <unk> 11, we started.
From a about a lesson on what percentage of market a market market shares and all the way.
To a fourth quarter 2019, we're actually at about 12, 4%.
And we just had a board meeting I just looked at a number $12.4 but 2020 is a particular challenge a year right. So.
I mean, we were we were on the 2019 fourth quarter and.
<unk>, we will feel like we can do a great. Another over a year, a 420.20, but a sudden.
Suddenly the D a.
Pandemic.
As well as a new entrance into some of the.
Into the market with a particularly a lot.
Excuse me this conference operator, sorry frequent construction.
On a linked please.
Your line from a prolonged momentarily Marvin Inc. Please.
You are now rejoining the main conference higher again the debt market.
When the macro environment okay.
The pricing within that low and that strategy works, because basically you know you're still going to have a pretty good.
With a focus on a growth.
Meanwhile, your bottom is not damaging package pricing see okay. They allow you to run fast.
A.
While the pricing coming down so much.
20.
Debt versus your your your cost a link going down 12%, 13% and is a big gap there.
Thank you a lot of.
Our assumption.
And the way of doing it should lead to a.
It's a major challenge a debt so when we say turnaround, particularly in 4 areas right.
<unk> is about organization, so we really true.
Restructure some of the organization.
As we have been doing that us things.
Last quarter last year on you'll have a change a lot of leadership positions and.
And each into a new should progress there's a we want to see if there's something that can be can be solidified a improved.
So organization is something needs to be more.
A beefed up a second is more about a franchisee side, we will make sure that our franchisee.
Able to survive a healthy they can also contribute to a growth of the market in the past.
Route the parcels a very much concentrated into as a percentage of less small percentage of a.
Franchisees so in other words.
On top you know, 20%, 30% a property debt.
Franchisees property had a 80.90, 95% by a higher.
On a partial public shares.
But now with that we really needed to have a.
Small or medium size, a franchisees they are capable to acquire more customers doing better servicing cetera. So in that sense that we need time to basically to help establish.
To nurture a more middle level, a middle to small level franchisees to make sure.
Under this kind of pressure level, they can still a pilot customers and providing a better services in the past a certainly.
Into the last year, especially the second quarter, but not the second half of last year.
A lot of.
Sure.
Franchisees actually getting to a couple because they've been running very fast in the past passed a 5.6 years.
And.
But all of a sudden environment change they have a base.
Likely has a.
On the challenge of a difficult to survive or difficult to treat basic.
A small provide a better services. So that's a thing that we read a need to helping them, giving time to do that a third is basically a win each looking through our strategy our pricing on a product right in a P.
Patent profit probably in a lending environment all good.
Any color on pricing you can bringing the debt.
<unk> got a customer's screened a parcel that's good.
Even if you don't make money, but at least as a lose that much money, but now if you bring order caused a parcel regardless of the pricing that you will find out debt that you are a sustainable because you're a loss a is getting bigger so in a sense on.
We really need to go through re.
The cash went up our pricing strategies as well as a product mix and everything something like a give up on something we had to do more.
That into a such a large and now we're a cross sell country a world class on time to change a lot of things.
But I would like to point out that debt actually I was happy to see.
Progress we have made.
We did a lot of things right. So we final we push on a more regulated.
A delivery fee structure for instead of a more AD hoc and in a random in April each progresses, but now we have a more structured.
As a matter of with fees.
On the you know the product mix anything sub debt. We also pushed it out a more a product a new pricing a structure, so which will help too.
Improved margins and profitability, but these through the oil now work to change the true to nurture the more.
A franchisees to be more competitive on a competitive to make sure that our product mix thing a more.
Hum.
Gross margin.
And the bottom line balancing this all of ours has from time. So that is something that we're looking on it we're not just looking at.
Cost.
Our cost actually coming down a lot. If you look at our first quarter numbers, our cost actually went down about 15%.
Which is significant because basically.
The look in a second quarter again, a number that's a cost coming off a very significant when compared with last year.
So yes of course, we can focus.
Operating E operating metrics, our operating efficiency.
More importantly, we changed the whole network structure.
Mix, Paul a structure and.
And to a much more.
Kind of site a much more on.
Hmm.
On the <unk>.
The optimized solutions.
That's a that's a problem we're talking about.
Your second question on.
We're really talking about financing side Youre absolutely correct.
If you look at our business.
Aside from the express.
Mitch we have been everybody being focusing on.
So if you look at our frame on phrase.
<unk> is doing extremely well.
Hey.
Not just in the industry market position as well as profitability growth everything is doing extremely well.
Looking at our.
<unk> will supply chain, we have a you know over 10 years' experience with actually it was apparent in on that.
A pricing on this well integrated <unk> a services with over 700.
Fortune 500.
Global and China, a fortune 500 a.
So we do have a lot of expertise in key areas.
Well, but in the in the past we have a small class we are doing a lot of things debt to try to support a lot now on.
On a distribution but was true.
The focus so within cutting down on.
Customers, who can see the hour.
Supply chain side a actually.
All the mattresses improve right on the margin has improved.
We actually our.
For a first quarter, we lose money on us on the jet a February because of Chinese new year January and March.
The supply chain is actually a positive share making money.
So is I think the second quarter Theyre looking for a true a subtraction has lots of value in terms of moving forward into if you look on China.
Economic growth in the in the structure change into the economy.
Proprietary.
And third party logistics on all this stuff is going to be a very well a needed.
And also touch on seeing a really good position.
If you look at it like you said, our new cargo a new cargo we actually have very few people. We only have about 150.200 people and a whole group a actual profitable.
Hi Chi.
The first quarter will have some legacy issues then.
From last year.
But actually a profitable into the force.
On the January and February certainly that's a March certainly is a second quarter.
So.
Nevertheless, they a third.
Yes.
Scale is still.
So a compare was afraid express and looking at Robo also right. So yes. So if you look at that.
We are looking at a multiple ways.
Ways to.
Raise capitals and also beef up our liquidity.
By all means.
Bye.
The debt raising funds for a particular.
Business on.
Sure.
Working with other partners on some models, when we look into already or the or the options and make sure that how to create a shareholders value and best for a company to grow.
And we're looking at <unk> guidance.
Thank you.
Okay.
This concludes our question and answer session I would like to turn the conference back over to Mr. Johnny Channel for any closing remarks.
Yes.
Thank you for joining our call and we appreciate it you will support a best.
Please reach out to our Investor Relations team if you have a further questions.
We look forward to speaking to you soon thank you very much.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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Net income for medicine.
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