BingEx (NasdaqGS:FLX) Q3 2025 Earnings Call November 19, 2025 07:00 AM ET Company ParticipantsLuke Tang - CFOAdam Xue - Founder, Chairman and CEOHelen Wu - SVPConference Call ParticipantsSaifan Jiang - AnalystOperatorOkay, and welcome to BingEx's 2025 third quarter financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Helen Wu from Piasante Financial Communications. Please go ahead.Helen WuThank you, Operator. During this call, we ...

Core Insights - The integration of Ele.me and Taobao Flash Purchase reflects a significant shift in consumer demand towards instant retail, driven by urbanization, accelerated lifestyles, and advancements in digital technology [1][15] - This merger is a strategic response to the evolving market dynamics, optimizing resource allocation and enhancing operational efficiency within the instant retail sector [1][15] Group 1: Industry Dynamics - The instant retail industry has matured over the past decade, evolving from a focus on food delivery to a comprehensive logistics and fulfillment system that meets diverse consumer needs [2][4] - Ele.me has developed a robust delivery system that integrates technology, logistics, and rider management, enabling efficient order fulfillment across various urban environments [2][3] - Taobao's extensive product supply network complements Ele.me's delivery capabilities, allowing for a seamless integration of diverse product categories into the instant retail framework [3][4] Group 2: Consumer Experience - The merger enhances consumer shopping experiences by simplifying the purchasing process, allowing users to access a wide range of products and services from a single platform [7][8] - Consumers benefit from improved delivery reliability and a broader selection of products, which significantly reduces shopping time and decision-making costs [7][8] - The integration allows for immediate access to essential goods, transforming consumer expectations from planned purchases to instant gratification [1][11] Group 3: Merchant Benefits - Merchants gain access to a larger market and improved operational efficiency, as the platform extends their reach beyond traditional geographic limitations [8][9] - The integration provides merchants with valuable consumer insights, enabling them to optimize inventory management and product offerings based on real-time demand data [8][9] - Instant delivery capabilities empower brands to launch new products more effectively, shortening the time from market introduction to consumer feedback [9][10] Group 4: Rider and Workforce Impact - The integration enhances the working conditions and earnings potential for delivery riders by optimizing delivery routes and reducing idle time [10][11] - A comprehensive support system for riders is established, including training, equipment provision, and welfare benefits, fostering a sense of belonging and attracting more labor to the industry [10][11] - The increased order volume and advanced scheduling technology improve the overall efficiency of the delivery workforce [10][11] Group 5: Future Outlook - The merger signifies a broader trend towards digitalization and efficiency in the retail sector, indicating a shift towards a more integrated and intelligent retail ecosystem [14][15] - Future developments may include the expansion of instant retail services into suburban and rural areas, as well as the introduction of advanced technologies like AI and IoT to enhance service delivery [14][15] - The collaboration between instant retail and emerging economic models, such as the "first-release economy," will further stimulate market innovation and consumer engagement [13][14]

Core Insights - The "2025 New Growth ESG Innovation Practice List" was officially released at the Harvard Business Review Management Annual Conference 2025, recognizing companies that effectively integrate environmental, social, and governance (ESG) issues into their operations [2][6] - SF Express's instant delivery platform, SF Same City, was highlighted for its "people-oriented, intelligent protection" approach in ESG practices, alongside other notable companies like BYD and JD Group [2][6] ESG Practices - SF Same City has established a low-carbon operational network by integrating AI scheduling, green energy, unmanned vehicles, and recyclable packaging, while also ensuring rider rights and participating in industry standardization [6][9] - In 2024, SF Same City achieved over 82.5 billion kilometers in total delivery distance, with over 98% of that using green transportation, resulting in a carbon reduction of 2.42 million tons [7] - The company has implemented a comprehensive rider rights system, focusing on safety training, career development, and welfare initiatives, including the establishment of over 4,000 rider stations [9] Financial Performance - SF Same City reported a revenue of 10.236 billion yuan in the first half of 2025, marking a year-on-year growth of 48.8%, with net profit increasing by 120.4% to 137 million yuan, achieving a historical high [12] - The company's strong ESG performance has led to recognition from authoritative institutions, with a 53% increase in its S&P Global ESG score, placing it in the top 25% of its industry [10][12] - SF Same City has been included in several major stock indices, reflecting the capital market's recognition of its long-term value [10]

Core Viewpoint - The company is positioned to benefit from the rapid growth of the instant delivery industry, driven by multiple factors including the diversification of demand, expansion of food delivery services, and the digital retail boom in lower-tier markets [1][2]. Industry Summary - The instant delivery industry is expected to experience a CAGR of 18.9% from 2023 to 2028, with order volume projected to grow at a CAGR of 14.5% during the same period [1]. - The demand for high-quality instant delivery services is increasing as merchants seek better logistics solutions amid the rapid growth of the instant retail sector [3]. Company Summary - The company, as the largest independent third-party instant delivery service platform in China, has achieved comprehensive coverage of four main consumption scenarios: food delivery, local retail, near-field e-commerce, and near-field services [2]. - The company reported a net profit of 0.51 billion yuan in 2023, marking its first profit after losses, and is projected to achieve a net profit of 1.3 billion yuan in 2024, representing a year-on-year growth of 159% [2]. - The company is leveraging its independent third-party status and collaboration with SF Group to expand its customer base and enhance profitability through scale effects [3]. - The company is investing in smart delivery solutions, including unmanned delivery and AI technologies, to improve delivery efficiency and service quality, which is expected to optimize cost structures and enhance profitability [3]. Financial Projections - The company is expected to achieve net profits of 3.09 billion yuan, 5.85 billion yuan, and 8.91 billion yuan from 2025 to 2027, with year-on-year growth rates of 133%, 89.4%, and 52.4% respectively [4]. - The company's PE valuation for 2025-2027 is projected to be below the average of comparable companies, indicating potential for investment [4].

Core Viewpoint - The report from Shanxi Securities projects that SF Express (09699) will see significant growth in net profit from 2025 to 2027, with estimates of 309 million, 585 million, and 891 million yuan respectively, reflecting year-on-year growth rates of 133%, 89.4%, and 52.4% [1] Company Summary - SF Express is positioned as a leading independent third-party instant delivery service platform in China, benefiting from the booming instant delivery industry and the decentralization of online traffic [1][2] - The company is expected to leverage its collaboration with SF Group in traditional express delivery and supply chain sectors to expand its customer base and enhance business scale, thereby improving profitability through economies of scale and advancements in unmanned delivery and AI [1] Industry Summary - The instant delivery industry is anticipated to experience rapid growth driven by multiple factors, including the acceleration of traffic diversification, the coexistence of various instant retail businesses, the expanding supply of food delivery services, and the fast development of digital retail in lower-tier markets [2] - According to iResearch, the CAGR for the instant delivery industry from 2023 to 2028 is projected to be 18.9%, while the order volume CAGR is expected to be 14.5% according to Sullivan [2] - Companies with independent third-party attributes and comprehensive business coverage in the instant delivery sector are rare, positioning SF Express favorably to capitalize on industry trends and achieve rapid growth [2]

Core Viewpoint - Shanxi Securities forecasts that SF Express City (09699) will achieve net profits attributable to the parent company of 309 million, 585 million, and 891 million yuan for the years 2025-2027, representing year-on-year growth of 133%, 89.4%, and 52.4% respectively. The company is given an "Overweight-A" rating for its first coverage [1]. Group 1: Company Performance - The projected net profits for SF Express City from 2025 to 2027 are 3.09 billion, 5.85 billion, and 8.91 billion yuan, with significant year-on-year growth rates [1]. - The company's price-to-earnings (PE) valuation for 2025-2027 is below the average of comparable companies [1]. - SF Express City benefits from being a leading independent third-party instant delivery service platform, with a unique combination of "third-party + full-scenario coverage + multi-channel compatibility" [1]. Group 2: Industry Outlook - The instant delivery industry is expected to experience rapid growth, driven by the acceleration of traffic decentralization, the coexistence of diverse instant retail businesses, and the expansion of food delivery supply [2]. - According to iResearch, the compound annual growth rate (CAGR) of the instant delivery industry from 2023 to 2028 is projected to be 18.9% [2]. - The order volume CAGR for the instant delivery industry from 2023 to 2028 is forecasted to be 14.5% according to Sullivan [2]. - Companies with independent third-party attributes and full-scenario business coverage in the instant delivery sector are rare, positioning SF Express City favorably for rapid growth [2].

Core Insights - The announcement of the "2025 Zhejiang Province Top 100 Enterprises" lists highlights the inclusion of SF Express City in both the "Top 100 Service Enterprises" and "Fastest Growing Top 100 Enterprises" categories, ranking 38th and 39th respectively, with a 3-position improvement in the service sector compared to last year [1][3] Group 1: Company Performance - SF Express City achieved a total revenue of 15.75 billion yuan in 2024, representing a year-on-year growth of 27% [3] - The company reported a gross profit of 1.07 billion yuan, up 35% year-on-year, and a net profit of 130 million yuan, which is a significant increase of 162% [3] - It is noted as the only company in the third-party delivery industry to have continuous high revenue growth and profitability for two consecutive years [3] Group 2: Business Model and Technology - SF Express City operates as the largest independent third-party instant delivery platform in China, providing comprehensive services across four main scenarios: food delivery, local retail, near-field e-commerce, and near-field services [3][4] - The company is enhancing operational efficiency through technology, utilizing an AI-integrated "CLS" city logistics system for optimal order and capacity matching, and has over 300 autonomous delivery vehicles operating in more than 60 cities [4] Group 3: Workforce and Community Support - SF Express City has invested 30 million yuan in a "Dream Fund" to support the development and welfare of its delivery personnel, helping nearly 3,800 riders advance to higher positions within the company [5] - The company has also allocated 12 million yuan to address riders' clothing needs and established over 4,000 rider stations, along with initiatives for housing subsidies and a "grievance fund" to assist riders [5] Group 4: Industry Outlook - Industry experts view SF Express City's inclusion in the dual top 100 lists as a significant recognition of its business value, especially as instant retail evolves into a new norm of "flash purchase at home" [6] - The company is positioned to benefit from the ongoing growth in instant retail and the diversification of traffic, with expectations for accelerated profit release due to its customized solutions and operational efficiencies [7]

Core Insights - The recent regulatory measures have fostered a healthy and orderly development in China's food delivery industry, promoting innovation and efficiency while ensuring fair competition [1][2][5] - The food delivery and instant logistics sectors are crucial components of the digital economy, significantly contributing to employment and consumer service growth [1][5] Industry Growth and Market Dynamics - The service retail sector in China saw a year-on-year growth of 5.1% from January to August 2025, with online food sales increasing by 19.1%, highlighting the sector's role in driving domestic demand [1] - Daily order peaks in the food delivery sector have surpassed 200 million, serving over 550 million users, indicating substantial market potential [1] Regulatory Framework and Compliance - Regulatory bodies are enhancing rules in the platform economy, focusing on compliance, fair competition, and labor rights, to ensure a balanced market environment [2] - New guidelines and regulations, such as the "Compliance Guidelines for Network Transaction Platform Charging Behavior," have been introduced to provide clear directions for industry development [2] Positive Market Trends and Performance - Major platforms have launched support initiatives for merchants and delivery personnel, leading to significant growth in restaurant orders and rider earnings [3] - Since July, over 300,000 small restaurants on Taobao's flash purchase platform have reached peak transaction volumes, with night orders in cities like Guangzhou and Shenzhen increasing by over 100% [3] Future Outlook - The ongoing improvements in regulatory frameworks are expected to lead to healthier and more dynamic competition in the food delivery market, which is essential for boosting consumer services and stabilizing employment [5]

Core Viewpoint - The introduction of a new feature by Meituan allows delivery riders to block customers who exhibit inappropriate behavior, marking a shift towards a more balanced protection mechanism for service providers in the gig economy [1][2]. Group 1: Service Provider Rights - The new blocking feature is seen as a basic safeguard for the dignity of riders, who often face disrespectful treatment from customers [1]. - Riders express relief and appreciation for the measure, indicating a need for mutual respect in the service industry [1]. - The feature reflects a broader trend in the service industry, where the traditional notion of "the customer is always right" is being challenged [1][2]. Group 2: Industry Dynamics - The implementation of the blocking feature signals a transformation in platform governance, moving from a one-sided user protection model to a more balanced approach that considers the rights of service providers [2]. - As competition intensifies and regulatory scrutiny increases, platforms recognize that a stable and healthy working environment is essential for retaining service personnel and, consequently, customers [2]. - The feature aligns with regulatory intentions to protect the rights of delivery riders, as seen in recent discussions about their working conditions and compensation [2]. Group 3: Potential Risks and Considerations - Concerns arise regarding the potential misuse of the blocking feature, such as avoiding difficult deliveries or low-paying orders, highlighting the need for a fair and transparent review process [3]. - Questions about the visibility of blocking information to other riders and the communication of blocked status to customers indicate the complexity of implementing this feature without infringing on user rights [3]. - The expectation is that this initiative will lead to a more equitable and caring approach in the gig economy, fostering trust between service providers and consumers [3].

Financial Data and Key Metrics Changes - Total revenue for the first half of 2025 was RMB 1.13 billion, a decrease of 30.2% from RMB 1.619 billion in the same period of 2024 [15] - Gross profit decreased to RMB 4.1 million from RMB 24.8 million in the first half of 2024 [17] - Net loss increased to RMB 53 million, compared to a loss of RMB 46.5 million in the first half of 2024 [22] Business Line Data and Key Metrics Changes - Revenue from on-demand delivery solutions was RMB 1.039 billion, down 30.7% from RMB 1.499 billion in the first half of 2024 [15] - Housekeeping and accommodation solutions revenue increased by 70.8% year-over-year to RMB 34.8 million [16] - Vehicle export solutions revenue decreased by 42.8% to RMB 57.4 million [16] Market Data and Key Metrics Changes - The domestic food delivery market experienced significant changes, with increased competition and cost burdens being passed to service providers [4] - The company observed signs of increased market share beginning in May 2025, indicating potential for scalable profitability [4] Company Strategy and Development Direction - The company is pursuing a dual-track strategy: optimizing the core business for quality growth and accelerating the development of the second core business [3] - The housekeeping and accommodation segment is becoming a significant driver for profit optimization [6] - The company is transitioning from a fulfillment service provider to a supply chain enabler, with a new cooperation with JD Jingdong Takeaway [13][14] Management's Comments on Operating Environment and Future Outlook - Management noted that the on-demand delivery business faces pressures but remains confident in the long-term value of the business [5] - The integration period is expected to end, leading to improved operational efficiency and profit potential in the second half of 2025 [5] - The company aims to enhance cash flow and expand its business through financial empowerment and operational improvements [26] Other Important Information - The company is involved in a trust plan to enhance property quality and rental value, which is expected to generate stable returns for investors [9] - The international revenue from used car stores showed a gross profit growth of 17.8%, with an improved gross margin [10] Q&A Session Summary Question: What is Quhuo's specific role in the trust corporation and its impact on future financial performance? - Management explained that Quhuo Ltd is a core operator in the trust project, turning business revenues into data assets and then into financial assets, which enhances liquidity and increases asset returns [25][26]