STO(SZ:002468)2020-08-27 16:00Important Notice, Table of Contents, and Definitions Company Profile and Key Financial Indicators This chapter provides basic information, contact details, and core financial data for STO Express, showing significant declines in revenue, net profit, and operating cash flow during the reporting period Company Profile STO Express Co Ltd (stock code: 002468) is a company listed on the Shenzhen Stock Exchange, with Chen Dejun as its legal representative - Company basic information: stock abbreviation "STO Express", code "002468", listed on Shenzhen Stock Exchange18 Key Accounting Data and Financial Indicators In H1 2020, the company's performance significantly declined, with operating revenue down 6.21% and net profit attributable to parent company plummeting 91.51% 2020 H1 Key Financial Indicators | Indicator | Current Reporting Period | Prior Period | Year-on-year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 9,258,311,812.63 | 9,871,391,649.42 | -6.21% | | Net Profit Attributable to Shareholders of Listed Company (RMB) | 70,677,769.36 | 832,478,548.69 | -91.51% | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-recurring Gains and Losses (RMB) | 31,740,909.21 | 782,152,713.67 | -95.94% | | Net Cash Flow from Operating Activities (RMB) | -399,696,745.90 | 813,013,205.35 | -149.16% | | Basic Earnings Per Share (RMB/share) | 0.05 | 0.54 | -90.74% | | Weighted Average Return on Net Assets | 0.71% | 9.33% | -8.62% | | Total Assets (RMB) | 15,018,971,542.72 | 13,855,221,867.36 | 8.40% | Non-recurring Gains and Losses Items and Amounts During the reporting period, total non-recurring gains and losses amounted to 38.94 million RMB, primarily from government grants and wealth management income - Total non-recurring gains and losses for the reporting period were 38.94 million RMB, primarily composed of government grants and investment income from wealth management products2730 Business Overview This chapter outlines STO Express's main business, operating model, and core competencies, driven by policy benefits, e-commerce growth, and industry consolidation Main Business and Operating Model STO Express primarily operates express delivery services using a "direct-operated transit centers and franchised outlets" model, driven by policy support, e-commerce, and industry consolidation - The company primarily adopts a "direct-operated transit centers and franchised outlets" operating model, vigorously promoting the direct operation of core transit centers, having acquired 18 core city transit centers36 - Performance drivers include policy benefits (express delivery to villages, factories, and overseas), e-commerce growth, increased industry concentration (CR8 reached 84.1%), and technology investment51556263 - In H1 2020, national online retail sales increased by 7.3% year-on-year, with physical goods online retail sales up 14.3%, accounting for 25.2% of total retail sales of consumer goods, strongly driving the express delivery industry's development62 Core Competitiveness Analysis The company's core competitiveness is built on a comprehensive business network, standardized management, a robust information system, efficient talent, and a strong brand image - As of June 2020, the company operates 68 transit centers, of which 63 are directly operated, achieving a direct operation rate of 92.65%; independent outlets exceed 4,100, a 41.38% year-on-year increase6971 - The company collaborates deeply with Cainiao Supply Chain on information systems, digital upgrades, and supply chain business, enhancing its information technology level and overall competitiveness73 - The company has developed core information products like "Outlet Manager" and "Center Manager," covering the entire business process to monitor, track, and dispatch resources throughout the parcel's lifecycle74 Management Discussion and Analysis In H1 2020, despite a 16.48% increase in business volume, intensified market competition led to a 6.21% revenue decrease and a 91.51% decline in net profit attributable to parent company Operating Overview During the reporting period, business volume increased by 16.48% to 3.52 billion parcels, but revenue and net profit significantly declined due to market competition 2020 H1 Operating Performance | Indicator | Amount/Quantity | Year-on-year Growth | | :--- | :--- | :--- | | Business Volume | Approx. 3.52 billion parcels | +16.48% | | Operating Revenue | 9.26 billion RMB | -6.21% | | Net Profit Attributable to Parent Company | 70.68 million RMB | -91.51% | - Infrastructure development: 63 directly-operated transit centers, with a direct operation rate of approximately 92.65%; total 194 sets of automated sorting equipment, including 32 new cross-belt sorters and 17 new swing-arm sorters8384 - Digital transformation: The first express delivery company among "Tongda" series to migrate all business systems to the cloud, improving version delivery efficiency by 95% and stability by 70%100101 - Terminal network optimization: 579 new independent outlets developed in H1, bringing the total to over 4,100, a 16.43% increase from the beginning of the year102 Main Business Analysis Main business revenue decreased by 6.21% due to increased market policy support, leading to lower revenue per parcel, while operating costs rose 4.11% - The 6.21% decrease in operating revenue was primarily due to the company increasing market policy support to maintain network stability and enhance market share112 2020 H1 Revenue Per Parcel (RMB) | Item | 2020 H1 | 2019 H1 | Change | | :--- | :--- | :--- | :--- | | Information Services | 0.21 | 0.53 | -60.38% | | Paid Delivery | 1.43 | 1.61 | -11.18% | | Transit | 0.94 | 1.05 | -10.48% | Operating Cost Composition Change | Cost Item | % of Operating Cost | Change % | Primary Reason | | :--- | :--- | :--- | :--- | | Delivery Costs | 58.39% | +5.25% | Increased business volume | | Transportation Costs | 17.04% | -12.75% | Route optimization, improved loading rate | | Employee Compensation | 13.40% | +45.59% | Increased business volume and transit center numbers | | Depreciation and Amortization | 4.40% | +54.30% | Increased directly-operated transit centers and capacity upgrades | Assets and Liabilities Analysis As of the reporting period end, total assets increased by 8.40% to 15.02 billion RMB, with notable increases in fixed assets, construction in progress, and short-term borrowings - The increase in fixed assets was primarily due to the purchase of operating equipment by Shanghai Baili and transportation vehicles by Hangzhou Shenrui68 - The increase in construction in progress was mainly due to the company's increased investment in transit center construction projects68 Investment Analysis Total investment for the reporting period was 883.66 million RMB, a 10.56% year-on-year increase, primarily allocated to transit center construction and vehicle purchases 2020 H1 Capital Expenditure Project Investment (RMB) | Item | Amount | | :--- | :--- | | Vehicles | 135,846,471.07 | | Transit Centers | 610,587,390.50 | | Land | 66,786,121.83 | | Information Equipment | 11,759,188.42 | | Other | 58,676,474.44 | | Total | 883,655,646.26 | - Total raised funds invested during the reporting period amounted to 87.35 million RMB, with cumulative investment reaching 4.77 billion RMB, primarily for the transit and warehousing integration project137138 Risks and Countermeasures The company faces market, policy, and operational risks, including intense competition, management challenges with franchised outlets, and potential information system failures - Market competition risk: The domestic express delivery market is highly competitive, with some large e-commerce companies building their own logistics systems, intensifying competition; failure to respond effectively could lead to slower growth and market share decline153 - Franchised outlet risk: The company primarily uses a franchise model, where franchisees' personnel, finances, and assets are independent; serious violations or poor management by franchisees could impact the company's revenue and brand image156158 - Information system risk: Business operations are highly dependent on information systems; system failures could adversely affect internal information collection and normal business operations165 Significant Matters This chapter discloses significant events during the reporting period, including the 2019 annual general meeting, no interim profit distribution, no major lawsuits or equity incentive plans, and guarantees provided to subsidiaries Significant Contracts and Their Performance During the reporting period, the company provided guarantees totaling 180.30 million RMB to several transportation service subsidiaries and invested 1.15 billion RMB in bank wealth management products - The company provided guarantees to subsidiaries totaling 180.30 million RMB197200 - The company used its own funds to purchase bank wealth management products, with transactions totaling 1.15 billion RMB and an outstanding balance of 895.60 million RMB202 Significant Matters of Subsidiaries Wholly-owned subsidiary STO Express Co Ltd acquired transit business assets in Jinan and Chongqing, and Shanghai Shenxue Supply Chain Management Co Ltd was certified as a high-tech enterprise - Wholly-owned subsidiary STO Express Co Ltd acquired transit business asset groups in Jinan and Chongqing to strengthen the standardization and operational management of transit centers206 - Wholly-owned sub-subsidiary Shanghai Shenxue Supply Chain Management Co Ltd was recognized as a high-tech enterprise, eligible for a 15% preferential corporate income tax rate from 2019 to 2021207 Share Changes and Shareholder Information This chapter outlines the company's share changes and shareholder structure, noting that 30.45 million restricted shares were unrestricted due to executive departures, while total share capital remained unchanged Share Change Status The company's total share capital remained unchanged at 1.53 billion shares, but 30.45 million restricted shares were unrestricted due to the departure of former directors and supervisors - Due to the departure of certain directors and supervisors, 30,446,454 restricted shares were unrestricted on June 24, 2020, with the company's total share capital remaining unchanged217220 Shareholder Numbers and Shareholding Status As of the reporting period end, the company had 51,183 shareholders, with Shanghai Deyin Derun as the largest shareholder, and key shareholders forming a concerted party relationship Top Ten Shareholders' Shareholding Status | Shareholder Name | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | | Shanghai Deyin Derun Industrial Development Co Ltd | 29.90% | 457,709,848 | | Shanghai Gongzhirun Industrial Development Co Ltd | 16.10% | 246,459,149 | | Shanghai Deyin Investment Holding Co Ltd | 7.76% | 118,715,969 | | Chen Dejun | 3.38% | 51,675,345 | | Nantong Hongshi Investment Co Ltd | 2.86% | 43,800,000 | | Chen Xiaoying | 2.65% | 40,589,072 | - Shanghai Deyin Derun, Shanghai Gongzhirun, Shanghai Deyin Investment, Chen Dejun, and Chen Xiaoying constitute a concerted party relationship228 Corporate Bond Related Information This chapter discloses information on the company's corporate bonds, including the issuance of 500 million RMB in 3-year bonds in April 2020 for debt repayment and working capital Basic Information on Corporate Bonds The company issued "20STO01" corporate bonds on April 28, 2020, with a total issuance of 500 million RMB, a coupon rate of 3.18%, and a 3-year term 20STO01 Bond Basic Information | Bond Abbreviation | Bond Code | Issue Date | Maturity Date | Bond Balance (RMB million) | Interest Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | 20STO01 | 149107.SZ | 2020-04-28 | 2023-04-29 | 500 | 3.18% | Use of Raised Funds The 500 million RMB raised from the corporate bonds has been fully utilized for debt repayment and supplementing working capital, consistent with the prospectus - The 500 million RMB raised from this corporate bond issuance has been fully utilized for debt repayment and supplementing working capital256 Relevant Financial Indicators As of the reporting period end, the asset-liability ratio increased to 39.43%, and the EBITDA interest coverage ratio significantly decreased by 81.01% to 17.79 - The EBITDA interest coverage ratio significantly decreased by 81.01% year-on-year, primarily due to a decrease in total profit and an increase in interest expenses264 Financial Report This chapter contains the company's unaudited H1 2020 financial statements, including consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity Financial Statements Financial statements show total assets of 15.02 billion RMB and total liabilities of 5.92 billion RMB as of June 30, 2020, with significant declines in revenue, net profit, and operating cash flow Key Items from Consolidated Balance Sheet (Unit: RMB) | Item | 2020-06-30 | 2019-12-31 | | :--- | :--- | :--- | | Total Assets | 15,018,971,542.72 | 13,855,221,867.36 | | Total Liabilities | 5,922,289,960.74 | 4,644,206,042.97 | | Total Owners' Equity Attributable to Parent Company | 9,053,124,541.95 | 9,136,945,461.23 | Key Items from Consolidated Income Statement (Unit: RMB) | Item | 2020 H1 | 2019 H1 | | :--- | :--- | :--- | | Total Operating Revenue | 9,258,311,812.63 | 9,871,391,649.42 | | Total Operating Costs | 9,211,715,751.02 | 8,847,834,259.88 | | Total Profit | 96,154,665.81 | 1,103,233,186.97 | | Net Profit Attributable to Parent Company Owners | 70,677,769.36 | 832,478,548.69 | Key Items from Consolidated Cash Flow Statement (Unit: RMB) | Item | 2020 H1 | 2019 H1 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -399,696,745.90 | 813,013,205.35 | | Net Cash Flow from Investing Activities | -1,215,271,668.32 | -1,597,331,302.79 | | Net Cash Flow from Financing Activities | 1,643,661,793.36 | -1,674,446.61 | | Net Increase in Cash and Cash Equivalents | 28,757,120.92 | -785,693,667.00 | List of Reference Documents This chapter lists reference documents, including financial statements signed by key personnel, original copies of all disclosed company documents, and the signed semi-annual report