Full Truck Alliance .(US:YMM) Nan Fang Du Shi Bao·2025-11-19 08:56Core Insights - Manbang Group (YMM.US) reported a 10.8% year-on-year increase in net revenue to RMB 3.3582 billion for the third quarter ending September 30, 2025, although revenue growth has slowed for five consecutive quarters [1] - Net profit attributable to ordinary shareholders fell by 17.9% to RMB 921 million, leading to an 11.9% drop in stock price following the earnings release, with the current stock price at $10.95 and a market capitalization of $11.45 billion, which is half of its initial listing value [1] - The company completed the acquisition of a majority stake in autonomous driving company Giga.AI in July, which has been consolidated into its financials, resulting in a nearly 20% year-on-year increase in R&D expenses [1] Revenue Breakdown - Manbang's revenue primarily comes from freight matching services, including freight brokerage, freight listing, and transaction services. While freight listing and transaction service revenues saw double-digit growth, freight brokerage revenue declined by 15% to RMB 1.0943 billion due to a decrease in transaction volume, partially offset by an increase in service fees [4] - The company's business model heavily relies on local government tax rebates to cover the difference between the 9% VAT it pays and the 3% input VAT that individual drivers can provide. A tightening of these rebate policies could negatively impact profitability [4] Service Fee Adjustments - In August, the company announced an increase in service fees for freight brokerage services to reduce reliance on government subsidies, which may raise costs for shippers. This change is expected to lead to a significant decline in transaction volume and increased costs, potentially harming profits [5] - CFO Cai Chong noted that the increase in service fees to 10%-11% has led to a structural improvement in user behavior, with a retention rate of 80% for small to medium-sized shippers who are less price-sensitive and more focused on the convenience of freight matching [7] Operational Metrics - In the third quarter, the company fulfilled 63.4 million orders, a year-on-year increase of 22.3%. The average monthly active shippers reached 3.35 million, up 17.6% year-on-year [8] - The overall fulfillment rate for the company reached 40.6%, an increase of over 6 percentage points from the previous year, with mid-to-low frequency merchants contributing 54% to total fulfilled orders [8] Regulatory Environment - The road freight sector in China is crucial, accounting for over 70% of cargo transport. Reports indicate that 57.44% of individual drivers use digital freight platforms, which has intensified price competition [9] - The Ministry of Transport has conducted multiple discussions with major freight platforms, including Manbang, regarding issues such as arbitrary operational rule adjustments and the protection of drivers' rights. The company plans to implement measures to ensure a healthier user ecosystem and prevent malicious pricing competition [10] Future Outlook - The company anticipates further slowing revenue growth, projecting net revenue for the fourth quarter of 2025 to be between RMB 3.08 billion and RMB 3.18 billion, a potential decline of 3% or a slight increase of 0.3% compared to the same period in 2024 [10]