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SF Express Loses a Staggering CNY 989 Mn in 1Q 2021

SF Holdings announced that it expects a net loss of 989 million yuan in the first quarter. This is the company’s first loss since its listing. The probable reasons are:

1. In such a critical period of new business development, the company needs to improve the investment in new business, including the network construction of express delivery and official website construction;

2. From 4Q 2020, it began to increase the construction of large and medium-sized transitional automation to improve the scale of capacity processing, which led to the rise in amortization and depreciation in the reporting period;

3. There were overlapping investments in resources, resulting in cost escalation in the initial stage of network integration.

4. The company invested in outsourcing, transportation capacity, and temporary sites and implemented the Spring Festival subsidy policy, which boosted the cost of on-the-job personnel; and

5. In the sinking market, the business volume of the unique distribution e-commerce products’ was multiplying rapidly, which caused certain pressure on the overall gross profit rate.

For more information and original news source: https://equalocean.com/news/2021042316200

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