[39 -> 67] Good afternoon, everyone. Welcome to the online investor recommendation meeting and telephone conference of Shengfeng Tongcheng 2022. Now, all telephone lines are set to listen-only mode. After the management team introduces the performance, you can ask questions. This conference will be held in Mandarin and provide English simultaneous translation. Let's welcome the host of today's conference, the secretary of the board of directors of Shengfeng Tongcheng,
[68 -> 97] Ms. Liu Jia, secretary of Dianqi. Welcome, Ms. Liu. Thank you, host. Good evening, investors and analysts. I'm Liu Jia, secretary of the board of directors of Shunfeng Co., Ltd. Today, I'd like to welcome you to attend the annual performance conference of Shunfeng Co. Ltd. in 2022. It's an online conference of recommendations and telephone meetings. First, I'd like to introduce the management level of our conference today.
[97 -> 126] Mr. Chen Fei, Chairman of the Board of Directors of Shunfeng Copper City. Mr. Chen Fei is also the assistant CEO of Shunfeng Copper Group. Mr. Sun Haijin, Chief Executive Officer of Shunfeng Copper City, and our core management team are all online today. Before we start, I would like to remind you that the comments in the meeting will include preliminary statements based on the current expectations. During the meeting, all statements except historical facts are preliminary statements.
[126 -> 155] These numbers will be affected by some risks and uncertainties, and due to various reasons, may not be implemented in the future. The annual performance announcement can be downloaded from the company's investor relationship website. Please note that this meeting may involve indicators of non-international financial reports. For a detailed definition, please visit the company's performance announcement. Then I will give the time to Mr. Chen. Thank you, Liu Jia. Hello everyone. Welcome everyone to participate in this
[155 -> 184] the 2022 Shenfeng-Tongcheng Economic Dialogue Conference. Last year, we faced a very complicated macroeconomic environment and the challenges of the pandemic. The management team and our employees and partners, we continue to insist that more people enjoy the mission of zero distance and a better life. We continue to polish our products and create new scenarios. Then we also achieved a fairly stable and quite good economic growth.
[184 -> 206] Our total revenue reached 102.7 billion yuan through a 100-million-yuan breakthrough and increased by 25.6%. The revenue from external customers increased by 28.3% and continued to expand Shenmeng Copper Co., Ltd.'s leading position in the third-party real-time delivery industry.
[207 -> 236] In 2022, we will focus on the long-term sustainable and healthy development of business, and put more energy into the growth of high-quality and high-efficiency. We will continue to expand the full-screen, full-channel, network coverage and deep-root industrial customization solutions to build an inferior competitive barrier. At the same time, through the optimization of business structure and the sophisticated management of the technology drive, we will further improve profitability stability.
[236 -> 266] Last year, our gross profit and net profit have improved a lot over the past few years. In 2022, our gross profit was 4.1 billion yuan, and our net profit was 4%. Compared to 2021, we achieved a 2.8% improvement. Our net loss was 2.8 billion yuan in 2022. Compared to 2021, our net loss was reduced by 68.1%.
[266 -> 294] At the same time, the loss rate has improved by about 8.2%, and the channel has increased by 2.8%. As the brand business, which is our customers, pays more and more attention to private channels, at the same time, vertical platforms, e-commerce platforms, and short video live platforms have been integrated into the local life sector, traffic has been centralized in the past, and is gradually moving towards a diversified development.
[294 -> 319] The industry is increasingly in need of diversified, professionalized, and customized services. We have also promoted the continuous penetration of third-party timely delivery services. As China's largest third-party timely delivery service platform, Shifeng Tongcheng has always been at the service boundary where we strive to expand ourselves. We will also seize the opportunity of industry development to give us the opportunity to actively embrace the industry trend.
[319 -> 346] we will continue to optimize our solutions. Our goal is to meet the needs of all kinds of customers, different industries, and all kinds of new channels, and to create more value for our customers through professional services. Looking ahead, as the impact of the pandemic slowly disappears, I believe that the industry will have a rapid recovery, new growth and new scenarios will continue to appear.
[347 -> 370] Our strategic direction will continue to focus on high-quality health growth, continue to expand the coverage of the entire scene and the entire channel, create specialized service, and further optimize our elite high-efficiency base. Next, I will give this time to our CEO, Mr. Sun Haijin, for further introduction. Thank you.
[370 -> 399] Good evening, investors and analysts. I'm Song Haiqing, a co-founder. I'm going to share with you some business highlights and business fundamentals of our company. First, I'd like to briefly introduce our business fundamentals. Over the past two years, we've seen further growth in terms of scale and network, further consolidating our third-party
[400 -> 429] We have seen a 30-odd percent increase in the number of users and the number of merchants. Our business health, infrastructure, and proportions have improved, and our anti-risk capabilities have increased. These are some of the basic aspects. I won't go over the data one by one.
[430 -> 458] I'd like to briefly share with you some of the changes in the foreign industry in the past two years. The first point is that there are more and more opportunities in the food delivery industry, especially in terms of the proportion of non-foods, and the industry is growing faster. In terms of retail and online e-commerce services, there is a faster growth.
[458 -> 488] We think that this trend and this phenomenon will continue. The second change is that there are more and more players in the traffic. You may watch various news and you will find that this industry is getting more and more lively. There are more and more players involved, and the traffic is getting more and more dispersed. At the same time, as I said before, there are more and more scenes. Based on these changes,
[488 -> 516] the demand for delivery is increasing. For example, the delivery distance is getting farther and farther, or the middle-to-long-distance orders are getting higher and higher, and even some large-scale heavy goods orders are getting higher and higher. There are also some special scenarios, such as a long-distance delivery, or even some four-wheel, two-wheel delivery, and so on. There are more and more new needs. So these changes will also allow us to see a trend that is more beneficial to the third party,
[516 -> 544] The more scenarios there are, the more professional needs there are. In the past, the delivery network was more and more difficult to meet the needs of today's full-scene configuration. So these are some of the shares of the two industries. Now let's look at some of our internal highlights. The first is that in 2022, we will still strictly implement professionalization and participation.
[545 -> 571] of the industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry. We want to build this kind of diversification and understand some of the key points of this industry.
[571 -> 591] We will use more resources and energy to develop the delivery process, delivery value points, and so on. This supports our growth in the delivery industry under all kinds of new requirements.
[593 -> 622] The second trend is that we embrace the multi-platform trend mentioned earlier. And we have also seen a good growth in 2B. In this regard, you may have seen a lot of foreign news, and you know that there are more and more players in this industry now. In addition to some traditional platforms, new platforms are also coming. With this third-party neutral positioning,
[622 -> 650] to embrace these new players and get involved in their ecosystem. At the same time, we continue to consolidate our cooperation in the brand side in terms of 2B and also bring a lot of growth. In this regard, we have been verified in terms of K&A brand cooperation and stability.
[651 -> 680] The third point is that our overall growth, as mentioned earlier, our overall growth is getting more and more effective. We have dispersed the risks of this kind of growth and competition. We have seen rapid growth in all industries except catering, such as medicine, and telecommunications, which have grown by more than 50 percent, and the wind industry has grown by more than 100 percent.
[680 -> 709] The third point is that our business structure will be healthier. At the same time, the risk of competition will be greater. So this is our third point. The fourth point is that our individual business has been confirmed to continue to grow. We still maintained growth of more than 5.7 billion yuan last year due to the pandemic.
[710 -> 733] Especially in this business environment, we are able to expand our brand advantage in this field. Therefore, our individual sales business is really very active. We also combine our observation on express delivery to launch a lot of products.
[734 -> 761] and we have built up the ability to win this kind of reputation. According to external research, independent third-party research, we are leading the industry in terms of NPS, personal consumption, and business scenarios. This is our first step forward. Then, we have further verified our cooperation with Suyun.
[761 -> 789] One of the biggest scenarios is that we have made great progress in the second half of the year, especially in the last one kilometer. This is mainly due to our flexibility and the ability to plan and share. At the same time, we have made a lot of new attempts and excavations in the last one kilometer.
[790 -> 819] to help Songfeng build more flexible and diverse scenarios in the end. We are confident that in the future, Songfeng will scale up in this area. This is the last part of the presentation. Yes, the last part of the presentation is that we have received very good verification from Songfeng in terms of business stability and scenario design. As we all know, Songfeng has more than 1.8 million customers in the industrial and commercial sectors.
[820 -> 844] As a series of products, we have also integrated them into our integrated solution. Last year, we have made a total of 1.9 billion yuan in revenue. Basically, we have penetrated the high-end brands, including luxury goods, banks, and other institutions, through the double-divide customer relationship.
[845 -> 870] We have also increased our ability to solve complex scenarios and high-demand scenarios, and we have brought a net profit of nearly 200 million yuan with Sunway. The above are some basic points of view on our business. We also pay great attention to our network capabilities, but we also emphasize our integration with technology.
[870 -> 892] Next, I will let CTO Chen Lin introduce some of our perspectives on network and start-up management. Thank you. Next, I will introduce network and start-up management. In the end, our goal is to build a very valuable and capable network to ensure that the time we promise our customers
[892 -> 921] we can have better service and travel standards in terms of time and regional dimensions. In comparison with 2021, in terms of regional dimensions, we can expand from the original main city to the lower city faster and get a higher income. At the same time, in the main city, we are also in some remote commercial areas or some similar parks, which include some commercial development in some commercial areas.
[922 -> 935] The second point is that in addition to having more scope, we also have more growth in terms of order structure and ability.
[936 -> 958] In particular, in terms of the ability to make long-distance and medium-distance orders, and in terms of guaranteeing the proportion, we can have a better improvement, which can allow our network to better serve some of the far-reaching and far-reaching delivery capabilities. The third point is that
[958 -> 982] In terms of large weight, large volume, high value, and various difficult delivery scenarios, we also continue to make efforts to ensure that we can provide our customers with various customization and stronger resource capabilities, ensuring that customers can deliver better in large, small, far, and near capabilities.
[982 -> 1011] Finally, in terms of the ability to serve in the industry, we have continued to improve and achieve full-time coverage. In terms of the 24-hour operation timeline, we have also made a stronger improvement. In terms of the improvement of technology and technical capabilities, we have also continued to strengthen our technical innovation investment to ensure that we have a leading edge in the industry in terms of digital and IT systems. First of all,
[1011 -> 1027] In terms of growth, we have smart business planning and marketing management to realize the entire smart marketing and smart CM system of 2B and 2C, and ensure that our growth efficiency and ROI can have a more efficient improvement.
[1027 -> 1054] In terms of the coordination of the core of the start-up and the order, we have a full-time coordination, business circle coordination, accommodation coordination, and express delivery coordination for different scenarios, as well as a variety of coordination modes. At the same time, there is an overall coordination and coordination to achieve a multidimensional mode of criminalization coordination, which can ensure that the criminals in the single mode and the overall seal of the seal
[1054 -> 1070] In the end, in terms of the management of the whole system and the management of the operating system, we need to realize the whole smart operation management,
[1070 -> 1095] and customer orders, and finally, our after-sales management can be fully streamlined, more realistic, and more standardized, and can achieve more timely tracking and management of each problem, and the ability to assign people, assign people, and achieve a more intelligent management of the entire order and reservation.
[1096 -> 1112] In terms of transportation, we have continued to achieve a growth in scale and flow. The core is still the cultural concept and the whole set of
[1112 -> 1136] We also continue to propose some special capabilities, including some special plans or methods, including our special care for women, and our whole medical system, as well as our special growth system, and so on.
[1138 -> 1165] and other capabilities to achieve the best in the industry. Based on this kind of hard-working bottom-line implementation, we finally achieved a very good standard in the industry in terms of reporting orders, holidays, bad weather, and rainy days. Our volatility still has a better reflection in the industry. In terms of the whole strategy,
[1165 -> 1185] First of all, we want to continue to improve our products based on the development of the scene and the development of the value. At the same time, we want to strengthen our standardization of logistics products and the ability to customize some products to ensure that we reach the full potential of the scene.
[1185 -> 1201] In terms of the whole business scenario, we continue to embrace the multi-channeling of traffic, and we also strengthen our digitalization capabilities, and ultimately realize the solution of our industry, and ultimately realize the solution of our industry,
[1201 -> 1230] to further enhance the brand education of users, and at the same time, to cover a variety of services and ultimately create a better service experience. The next part is the financial part, which is given to Mr. Han. Okay, let me introduce the simple situation of our profit this year. As the leaders have mentioned,
[1232 -> 1260] to a scale of 100 billion. So this year, we have an income of 10.2 billion, and the growth rate is 26%. In terms of net profit, this year is the same as last year. Last year, we improved by 0.8 points, from 1.2 to 4.0. In terms of net loss, last year it was negative 11 points, and this year, in 2022, it will be negative 0.8 points.
[1261 -> 1282] You may have noticed that in 2021, we have a cost of more than $200 million in shares, because of the accounting balance, which needs to be included in the profit table. If we omit this part, the total loss after adjustment is actually negative $8.2 billion.
[1283 -> 1304] and compared to this year's 2020-2008, we actually improved the loss rate by 5.4 points. Here, I would like to highlight some of the advantages of this product. From a business perspective, as mentioned earlier,
[1304 -> 1333] If we don't include the last 1km of delivery, then our revenue will be reduced by 29%. One of the best things is that our personal service has increased by 57%. In addition, from a geographical perspective, the revenue growth in the sand market is also very positive, with 37%.
[1334 -> 1361] As mentioned earlier, the profit margin has improved significantly. As for the cost-benefit ratio, as you can see, in 2020, it was 12.2%, and in 2020, it was 6.8%. Of course, if we exclude the shareholder payment cost, we will have a 2% increase.
[1362 -> 1391] and our revenue growth is fast, so we can have a good decline in our revenue. Another key point is that our R&D costs will slightly increase by 2 points compared to the previous year, because this is also our base. But compared to the revenue growth, it is still much lower.
[1392 -> 1418] In terms of the basic structure, we can see that for third-party clients, the turnover rate has increased from 27 days in 2021 to 25 days in 2021. If you look at our sentiment and liquidity ratios, they are 1.3x, 1.9x, and 3.2x.
[1422 -> 1446] we are in a very healthy state. Here, we have divided the income into 2B, 2C, and the last one. As you can see, we have a 20% growth in 2B and 2C. As for the personal income,
[1446 -> 1473] we have a growth rate of 57%. This has led to a growth in our overall income. As mentioned earlier, our fee rate has improved a lot, from 12.2% to 6.8%. As mentioned earlier, if we remove the share price, it will be 9.4% in 2021, compared to 6.8% in 2022, which is a 2.6% increase.
[1474 -> 1501] As you can see, our sales expenses have been greatly reduced. Because we focus more on ROI for promotion and sales activities, we will reduce the amount of ROI that is not that high. So we focus on ROI that is high. In addition, in terms of administrative expenses,
[1501 -> 1525] For example, last time we had a decrease in the number of customers. In addition, in terms of our management, we also had some control over the management editor. In terms of this part, our control is quite good. Although the income has increased by more than 20%,
[1525 -> 1553] After deducting the shares, the management cost is basically equal. Here, I would like to show you the interest rate and the loss rate after the adjustment. This is also stable, and the improvement is very obvious. I don't believe in this figure.
[1555 -> 1580] You may be curious about the improvement of our profit margin and our loss-reduction rate. Let's start with the first point. In terms of the improvement of our profit margin, we focus on three points. The first is the adjustment of our business structure, which will also be involved later. The second point is the initial business supply.
[1581 -> 1603] Thirdly, we have a three-layer market management, and we have a three-layer management, etc. As for the cost, as mentioned earlier, we have invested in the ROI direction, and we have strictly controlled the cost. For example, in terms of the optimization of the business structure,
[1603 -> 1629] For example, we will separate all the industries. Now, we will manage the internal management in a separate industry. In addition, we will also do regular service for some customers. We will continue to do this. In addition, there are some positive customers. As you can see,
[1629 -> 1657] including the top 100 big clients, we have a high demand for them. In addition, we will start to see if there is any way to optimize some of the clients who are concerned about the price, but there are also some clients who are losing money. But if there is no room for optimization, we will also reduce it.
[1658 -> 1684] Another is the expansion of our personal business. This is also a strategy that we have been working on for the past few years. This is also reflected in the growth of our income in our personal business, with a growth of 57%. Another is a slight improvement in our start-up. As you all know, start-ups are our most important partners.
[1684 -> 1714] Then we can make sure that the riders can increase their income, but we also don't want them to be dependent on us. We will use the density of the riders, the density of the orders, through the technology system to make some adjustments. Including some of the subsidies that we give to the riders, there will be some participation. For example, we will also support high-speed time subsidies.
[1714 -> 1738] In addition, we have improved the order delivery route and the order situation on the delivery route. We have also made some improvements through technology to achieve a win-win situation. This is the second thing.
[1738 -> 1767] Because we are now going to manage it in more detail. For example, we will see the order volume, the order density, and the business structure from the three-circle model. As long as it meets certain conditions, we will see that the profit ratio of the three-circle model is also very high. So in the future, we will also use this method to manage all our three-circle models.
[1768 -> 1796] For example, we will balance some of the resources in the three-circle system, including some of the currency management in the model management system, and so on. Lastly, regarding the cost management, as mentioned earlier, whether it's technology or cost management, we all have long-term effects.
[1797 -> 1820] As I mentioned earlier, our development cost is actually lower than last year. We have increased our investment by more than 2 points, but our income growth is only about 20%. So the cost rate is also lower, which causes some embarrassment. The same reason also exists in the administrative management.
[1820 -> 1849] This is also a type of fixed fee. As the income increases, we control the fee and the fee rate goes up. In terms of brand promotion, as I mentioned earlier, the fee for brand promotion is mainly spent on ROI. This is the overall financial statement.
[1849 -> 1876] As you can see in the announcement, there will be some changes in the company in the future. In the future, I will transfer some of the company's new business development. Because the development of new business is still very important for the company.
[1877 -> 1900] I've been in the company for quite a few years, so I will be doing this kind of business. In the future, there will be another partner to take over my position as a CFO, etc. Let me introduce Mr. Xie Wenzhong. He will also say a few words to everyone.
[1902 -> 1931] Thank you for the introduction, Mr. Hailing. First of all, I believe everyone has seen the performance of Tongcheng last year. I think this cannot be compared to the efforts of Mr. Hailing and his financial team. So I would like to say thank you to him here. At the same time, I would also like to thank Mr. Chenfei and Mr. Haiqing for their support. I am honored to join Tongcheng. When I was in the group, I was always concerned about the development of Tongcheng's business.
[1931 -> 1958] and participated in some major decisions prior to the listing of Tongcheng. I am looking forward to being able to integrate into this new environment as soon as possible, and to continue to help Tongcheng develop with the help of Sunfeng Group, the Ministry of Finance, some excellent management experience and tools. Here, I would also like to say hello to new friends and old friends in the capital market.
[1958 -> 1987] Thank you for your support in the past. I hope we can continue to work together on new platforms. Finally, I'll hand it over to Mr. Hai. Thank you, Xi Feng. I'll make a brief summary. Before I do that, I'd like to express my gratitude to Hai Lin for his contribution to CFOGang this year. At the same time,
[1988 -> 2012] to help me explore our company's new growth curve and business. At the same time, I would like to welcome Xiwen to join our team.
[2013 -> 2039] will bring a new level to our entire investment, financial management, and business model. Finally, I would like to make a brief summary. I think this summary mainly talks about two points. The first point is that after going from being a publisher in 2021 to being a challenger for a whole year in 2022,
[2040 -> 2068] I think the first point is that it makes me more determined to see the social value and social significance of our timely delivery, especially the third-party timely delivery. Because no matter from the point of view of the merchants, consumers and the industry, even from the point of view of government supervision, we are all happy to see that this industry is more prosperous and has more choices. So from the point of view of the big picture,
[2068 -> 2097] I think I will be more confident. The second point is that through this year's efforts and cooperation, I have found a better balance of routes and methods for how to face this kind of high-intensity competition and how to make a quick profit. So no matter what kind of competition we face in the future,
[2097 -> 2114] Thank you, Mr. Wang.
[2115 -> 2143] We will now enter the Q&A session. First of all, you can ask questions on the phone. You can also directly ask questions in text. Text input is also OK. Please let the staff broadcast the way we ask questions on the phone. Thank you. OK, thank you, host. Let me remind the participants on the line. If you have any questions, please press 1 on the speakerphone and wait in line.
[2144 -> 2173] Please press the number 1 key. Thank you. Hello, everyone. First, let's welcome Feng Qibin from CICC. Please. Dear Mr. Chen, Mr. Hai, I'm Feng Qibin, a chief analyst at ZTE. I'm on a business trip, so my voice may be a bit noisy. In this complicated environment in 2022, our company's financial data has improved a lot. Congratulations.
[2173 -> 2201] I have two questions. First, I have heard that some competitors in the industry are increasing their market size by lowering their prices. And they are also fighting for profits. Do you have any measures to deal with this? Second, I have a question about the capital market. Could you repeat the current situation of the capital market? Thank you.
[2202 -> 2231] Thank you, Mr. Feng, for your question. I will answer the first question, and then we will ask Mr. Fei to answer the second question. First of all, I would like to answer your question about competition. In my opinion, there are two things that compete in this industry. Competition is always there. On the one hand,
[2232 -> 2255] In this way, we understand our own business, so we define our business through the industry, the scene, and the customers. We will continue to do this kind of competitive ability.
[2256 -> 2283] to improve our ability to compete. That is to say, this competition, this growth is more built on differentiation or service quality. In this regard, we will continue to invest in our professionalism in this area to improve service quality. In this regard, in many of our second years, we have seen that this part is actually increasing faster than our big plate, so it also verifies our ability in this regard.
[2283 -> 2313] The second is that we think that in the end, this industry is a logistics industry. A logistics industry cannot be sold, especially for some small and medium-sized businesses, like 2B, logistics is a cost. So how to provide a high cost-benefit ratio is something that cannot be avoided. In this matter, we think that there are some business scenarios, or there are some customers who essentially have to compete in terms of cost-benefit ratio. In terms of cost-benefit ratio competition, we will not only take the initiative to fight, but at the same time, we will be more proactive
[2314 -> 2338] We believe that the biggest advantage of this industry is to emphasize the macro-scale advantage and the micro-scale advantage. The macro-scale advantage is to emphasize the overall unit of a company, while the micro-scale advantage is to focus on the physical unit of a company, such as a business circle or a city.
[2338 -> 2366] In terms of the national scale, we may not be able to do it in some markets, but we will take the initiative to lower the price and cost in our business circles to keep us sensitive to these price-sensitive and cost-sensitive markets. So I think this form of competition is very welcome for us. We think this form of competition will also be maintained for a long time.
[2367 -> 2392] Most of the players may have some differences. We are more focused on building the acquisition of liquidity and our control of the management of liquidity. So we believe that for chess players, the first thing is to care about how much money they make here. The second is to care about whether they are happy in this process and whether there are problems. So we are in the whole process
[2392 -> 2419] We are very confident in the quality of the industry, both in terms of cost and innovation. So we think this is one of our potentials. The second question, I would like to ask Fei to answer.
[2419 -> 2447] Mr. Feng, thank you for your question. I believe all shareholders are very concerned about the full circulation. Because it involves the liquidity of the entire listed company's stock. It is also a very important part of our market management. So in this regard, we attach great importance to this topic. I would like to share with you the progress of the full circulation announced by the company in February.
[2447 -> 2475] After the announcement, after H5 was completed last time, our current H5 share price rose by about 25% before the conversion to 33% after the conversion. The whole process of H5 is also a choice of all shareholders who are willing to convert shares. We cooperated with the shareholders' wishes to make such a conversion of H5.
[2476 -> 2503] This year, we expect that the flowchart of the same city will be further expanded. This will be very helpful for the liquidity of our company's stock and the activity of the new shareholders. In addition, under the new rules, we also expect that the flowchart will be accelerated.
[2503 -> 2530] We will keep you updated. Thank you. Okay. Thank you, Mr. Hai and Mr. Fei. Thank you for your question. Hello, everyone. Next, we have Chen Lin from JP Morgan. Hello, welcome. Hello, managers. I'm Chen Lin, an analyst from JP Morgan.
[2531 -> 2560] First of all, I would like to congratulate Xi Wenzhong on his trip. I have two questions. The first is about the last mile delivery service. We saw that in the first half of the year, the last mile of the company's revenue increased by 9%. But it has increased by 20% throughout the year. This means that in the second half of the year, the increase is very fast. I would like to ask if this increase can continue. This is the first question. The second question is, how does the company view the positioning of this business in the future?
[2561 -> 2588] Thank you. Thank you, Mr. Chen, for your question. Last year, the last kilometer, in the first half of the year, there was some impact on the environment, and the growth rate was lower. In the second half of the year, it returned to normal. In fact, this is also a normal growth rate. We are still very confident about this in 2023.
[2589 -> 2616] This confidence does not come from a group's executive order, but from a deep and integrated value. Our cooperation with Suyun mainly has three aspects. The first aspect is that as a flexible end, we can help Songfeng become more flexible on behalf of the project.
[2616 -> 2643] Especially when it comes to dealing with the current high wind and low tide, and the improvement of the work time of the delivery manager on the delivery side, and the flexibility of his side, it has been deeply harmonized. So in this respect, we are getting more and more of this delivery manager's, as our big customer delivery manager's, drive, and even his subordinate manager's recognition. That is to say, for him,
[2643 -> 2673] In terms of customer needs and growth, there will be two types of people and two types of resources to support the use of the combination. The management side will solve some of the professional requirements, and then we will be flexible. We can also eliminate some low-added value things. At the same time, we can liberate more people to do high-value things. So this is already a bit deep. The second scenario is actually that we will work with Shuangfeng to create more high-quality customers.
[2673 -> 2700] As I mentioned before, there are more than 1.8 million customers. Many of them are DENTA-type customers, such as LV, luxury goods, banks, jewellery, and so on. When they use exchange products, when they need faster demand for copper, they buy our service. Last year, we made almost 2.9 billion yuan in revenue.
[2700 -> 2724] We believe that with the improvement of our network capability and product stability, we will be more and more confident in selling our products to more industrial and commercial customers, and they will be more and more acceptable to us. We expect to see an increase of more than five times this number every year, because the stronger the network capability and the stronger the product stability, the more customers will use it.
[2725 -> 2752] The first batch will be delivered by us. The first batch will be delivered by us. The first batch will be delivered by us. The first batch will be delivered by us. The first batch will be delivered by us. The first batch will be delivered by us.
[2752 -> 2782] This means that a lot of customers in Shunfeng will be able to register quickly without having to wait in line for a long time. This means that a lot of customers in Shunfeng will be able to register quickly without having to wait in line for a long time. This means that a lot of customers in Shunfeng will be able to register quickly without having to wait in line for a long time. This means that a lot of customers in Shunfeng will be able to register quickly without having to wait in line for a long time. This means that a lot of customers in Shunfeng will be able to register quickly without having to wait in line for a long time. This means that a lot of customers in Shunfeng will be able to register quickly without having to wait in line for a long time. This means that a lot of customers in Shunfeng will be able to register quickly without having to wait in line for a long time. This means that a lot of customers in Shunfeng will be able to register quickly without having to
[2782 -> 2811] At the same time, it will also improve our brand awareness and penetration rate in the commercial scene. So we are very confident in this kind of coordination with Shunfeng. I still repeat this confidence. It is not from some kind of administrative order or some kind of exclusion, but from the value and integration of depth. Yes, this is my supplement to this question. Thank you, Haijin. I very much agree. I think it is an important strategic link of the Shunfeng Group in the same city.
[2811 -> 2836] because Tongcheng provides real-time logistics, which is an important part of our so-called minute-level network. As Haijin said, Tongcheng's express delivery is increasingly leaning towards real-time logistics, because customers now want to see a timely delivery as soon as possible, rather than a network-based arrangement.
[2836 -> 2863] from zone A to zone B, they still have to go through the retail point. It's not like that. Now, what they require is a timely delivery. So, in the future, Shunfeng and Tongcheng will cooperate more closely to ensure that customers can get the best experience, especially customers in Tongcheng. In addition, Tongcheng is now an important product in Shunfeng's entire supply chain.
[2863 -> 2880] So, when we go to meet a lot of big clients, we give them a combination of services. If it's a trans-provincial or trans-urban delivery, it can be a so-called traditional planned express delivery. So, if you need a warehouse or a supply chain,
[2881 -> 2908] If we need a real-time logistics delivery service, we have Tongcheng's service. In other words, now Tongcheng, in addition to being a source of customers for a long time, it has also become one of the key players in Shunfeng's large-scale logistics plan. We see that the customer feedback is also very good. So in the future, both parties, Shunfeng and Tongcheng,
[2908 -> 2934] Thank you for your question.
[2936 -> 2963] Thank you very much for giving me this opportunity to ask questions. I am a fan of Meilin. I also have a very good understanding of the industry. I hope you will take care of yourself. I have three questions. The first one is about the expansion of our K&A business. Can you please give us a detailed introduction? For example, what new K&A clients did you sign last year?
[2964 -> 2981] The second question is about our interest rates. Can you tell us about the interest rates of K-A, SMB, and 2C last year, and what is the outlook for this year?
[2981 -> 3008] I'd like to ask, since it's already the end of March, we've seen the overall business growth in the first quarter this year. Can you give us some guidance on how to improve it? Thank you. Let me answer the previous question first.
[3008 -> 3034] between several business lines. As we mentioned earlier, there has been an increase in the amount of cash in each business line. For example, because we mainly separate 2B, 2C, and the last-minute payment, the last-minute payment itself is a relatively stable amount of cash.
[3034 -> 3064] As Mr. Han mentioned, we will keep a certain amount of investment and maintain a similar interest rate. This is the first point. The second point is that we will also divide the land into K and small and medium-sized coins. If you have been following us for a long time, you probably know that K has always been a good and stable interest rate.
[3064 -> 3090] In the past two years, we have seen an increase in the number of users. As you all know, SMB is a business that has just opened. It may be a little more expensive, but last year we did some financial management, including some of the things I just mentioned.
[3091 -> 3118] If there are some customers who have a limited margin of return, we will also eliminate them. So this is a significant improvement for us. At the end of last year, we basically achieved a net return of less than a digit. Another area is our main business in the past few years.
[3119 -> 3148] we will maintain a certain distance. However, this business itself is, because the unit size is relatively high, it is often a mid-range distance, a distribution distance feature. So, this part of the business, we usually keep it at that one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one, one
[3148 -> 3174] We also expect that this part of the business will continue to move in a good direction in the future. Of course, this year's data has not been announced yet, so we can say that the trend is still moving in a good direction. That's the main thing. Okay, then I will add a little bit to the first and third questions.
[3174 -> 3193] In the past two years, the growth rate of KA has been higher than that of Dapang. In fact, we can say that all our profitable businesses have turned out better. This has something to do with our own structure. The growth of KA, on the one hand,
[3194 -> 3216] We have made a lot of innovations in terms of K&A service participation and service continuity, which has improved our continuity and style of K&A. Secondly, in some new industries, in the past, our K&A was mostly in the catering industry. Now, in the medical industry, supermarkets, cakes, and other industries, we will gradually start K&A.
[3217 -> 3237] We have a very good relationship with China, and we have a good relationship with China.
[3237 -> 3263] We are very confident in our ability to meet the needs of creating and diversifying advantages, and we are confident in the concentration and professionalism we put into it. So, in the past and in the future, we are still very confident in the advantages of competition in this area, and we can prove through historical data that we have experienced various challenges and competitions.
[3264 -> 3286] The third question is about the income and profit guidance for 2023. As Hai-Lin just said, we cannot provide detailed data due to the disclosure reasons, but we are still very confident. As I said before, in terms of high-debt competition in 2022, the most difficult thing for us is not
[3286 -> 3307] is not about the competition. In fact, one of the most difficult problems we have been testing for the past two years is how to find a balance in terms of growth and profit. This is what I have been focusing on for the past two years. So, from our point of view, on the one hand, in terms of high-demand customers,
[3308 -> 3337] we kept our competitive advantage. And then we asked our customers to lower their costs. We also lowered our costs and at the same time increased our gross profit. That is to say, we did not calculate our gross profit to do some business. So in 2022, I think the most important thing for us is to verify this point. We think that in 2023, we will be able to balance better in this regard, and we will be able to achieve a better business result faster. So this is some of my contributions to the third question. Thank you. Okay, thank you, Mr. Hai.
[3340 -> 3367] Thank you for your question. Good evening, I have two questions. The first one is about our cooperation with Douyin. Can you share the latest situation and financial developments? The second question is about
[3368 -> 3397] I have a question for Douyin. We are concerned about Douyin, but since it involves Douyin's considerations, it's not convenient for us to disclose too much. The first thing I can say is that
[3398 -> 3425] We are the richest in the Douyin cooperation environment. Because Douyin take-out is the one that people pay the most attention to. But there are other businesses in Douyin. Our integration and accessibility is the best. This is the first. The second is that in some of the new 10-point business, we have also done very well in terms of the amount and profit model.
[3425 -> 3454] We have received a lot of recognition from Douyin. Thirdly, in terms of our network capability, we believe that whether it's our third-party positioning, or our 2B2C network capability, or our ability to solve customization, mid-range, long-range, and all kinds of long-range capabilities, we are able to meet the needs of a streaming platform like Douyin. So we are very confident
[3455 -> 3484] This is the first question. The second question is about the industry competition pattern and trend. First of all, when I was summarizing earlier, the first thing I said was that I think this industry will only get busier and busier. I think if we use a comparison, it's a bit like e-commerce from 6 or 7 years ago. The traffic was dispersed,
[3484 -> 3513] And then, due to the big competition, or the decline of China's population, various platforms are more and more eager to participate in the cross-border campaign. So this industry is only getting more and more lively. I think this is for sure. Basically, this is a big event, and nothing can stop it. All we need to doubt is which day,
[3513 -> 3540] So I think this is the first point. The second point is that as the pandemic has been going on for the past few years, the supply of food, the supply of medicine, and the supply of food has become more and more abundant. On the one hand, the supply of food will bring more demand. On the other hand, the supply of food is becoming more and more mature, which will bring more demand.
[3541 -> 3569] the threshold for this kind of model is getting lower and lower. So this trend of commercialization promoting logistics and logistics promoting commercialization in the opposite direction, I think this trend will also form. First, from the perspective of various players, it will become more and more abundant. Second, from commercialization to logistics, logistics, logistics, I think this industry will form a two-way demand equality. I think this is the second point. The third point is what we talked about earlier. This industry is getting more and more in demand.
[3570 -> 3592] In terms of logistics, companies that do not rely on a certain category to eat will be more sensitive and will do their best to meet the needs of today's market.
[3592 -> 3621] because we don't have our own natural twin stream that we must protect. Strictly speaking, as a logistics company, we don't have our own non-protected KPI. So we will be more proactive in embracing all the needs on the market today. And there is no such thing as a vote of no confidence on the resource balance. We will pay attention to the vote of no confidence in all the resources, experience and points of view. So we think, as a third party, we will be more sensitive
[3621 -> 3649] We are confident that we will be able to meet all the needs of the market in no time at all. We want to share our thoughts on the second question.
[3652 -> 3681] Thank you for your question. Next, please welcome Shen Xiaofeng from Huatai Securities. Hello, welcome. Thank you for the introduction, Guan Yucheng. I have a question. I am Shen Xiaofeng from Huatai Securities. The company has been using technology to drive the improvement of operating efficiency. This has achieved very good results in 2022. Guan Yucheng mentioned it when he introduced it earlier. I am curious, I want to ask Guan Yucheng, can you briefly introduce what are the key breakthroughs in 2022?
[3682 -> 3689] Is there any progress in science and technology? Can you give us some insights in the future? Thank you.
[3690 -> 3716] Okay, thank you, Mr. Shen. Now, let me introduce it to you. In fact, when it comes to the investment in technology, we continue to increase it. Just like what Mr. Caiu said, we continue to invest more in technology from the absolute value. We hope that this technology can bring the whole efficiency improvement. In terms of the details of efficiency improvement, we divide it into several directions.
[3717 -> 3735] We have 2C and 2B on the customer level, and our core investment is to support the growth of 2C and 2B. Our core investment is in the marketing and intelligent CRM system to ensure that every cent of our marketing spend is facing the whole day.
[3735 -> 3754] The whole smart CRM can ensure that our sales management system can better reach each customer and can be more accurate in the management of recruiting each customer, and the efficiency of our customer growth and growth management can continue to improve.
[3754 -> 3783] On the second part, when it comes to the matching of orders, we will continue to develop our smart ordering system to ensure that our order will be the most efficient in terms of the overall order efficiency. The highest order, that is, the result of an order towards human efficiency, will achieve the whole of our market. As the total number of orders continues to increase,
[3783 -> 3810] we can also ensure that the human effects of the market can continue to be improved, which can ultimately achieve our goal of lowering the price. In addition to this, we also continue to pay attention to the balance of the market in the whole market and the experience of receiving orders, so that we can achieve a double balance in the whole human effect and the experience of receiving orders, so that the whole market can continue to face a longer, a longer-term upgrade.
[3810 -> 3838] At the same time, in terms of more details, we also transfer as a centralized ability for the entire transport and customer demand. For example, in the case of rainstorms and relatively tight transport, we need to face a single AOI or a more detailed scene. For example, in Nanshan, it may be short-distance,
[3838 -> 3862] But in the long run, because of the high price, the market may be more willing to accept it, etc. This is similar to the case of the catering and cake orders. In different scenarios, the market hopes that the willingness of the reservation order can be realized through transfer to achieve a better balance of demand and supply, and through transfer,
[3863 -> 3884] through the transfer and output of these profits and the current capability of reporting orders, we can ultimately provide a better response and presentation to our customers, so that our customers can achieve a better linkage on the bottom side, including the final profit side, so that we can really operate and manage the order-oriented operation.
[3884 -> 3911] Finally, in our management system, we have a smart operating management system. Through the entire management system, we can ensure that any abnormality in each unit of the contract, and any data problem in each node of the standard SOP can be summarized and reported in time, and the best management efficiency can be achieved by managing the entire contract process.
[3911 -> 3928] With regard to the investment of the new technology, in 2022, we also tried the delivery of drones, and we launched a SaaS system for wind and cloud, which opens up our delivery capacity to all delivery companies.
[3928 -> 3956] In terms of this ability, we have already accepted a certain number of customers, and we have also realized that customers, while they have their own ability to match, can also guarantee the integration of additional orders and synchronization, and the integration of each other to achieve better efficiency for both parties, and to bring more growth to our entire logistics.
[3956 -> 3986] We are also paying attention to new technologies in the industry, such as AIGC. We are also working closely with some domestic companies. At the same time, we have established a deep cooperation with Baidu. We are also investigating the realization of some scenarios under the same logistics. Thank you.
[3989 -> 4010] Thank you for your question. Next, I would like to invite William Sun from HSBC. Thank you. Thank you. I would like to ask about the share of the company in the enterprise. We have seen that the company has released a 23-year employee retention plan. I would like to ask the management to introduce the relevant background and situation. Thank you.
[4012 -> 4034] Hello, I am Liu Jia. I will answer this question. Thank you for your attention. We have recently released our first employee experience plan. It is a way to buy company stocks through trust and then receive employees. It also corresponds to a setting of the entire company's performance and employees' goals, and then decide whether to belong.
[4035 -> 4061] The total amount of funds will not exceed 5% of HV. The overall cycle will be 10 years. This fund is actually a small amount of funds to attract and maintain the most core management layers for the company's future growth.
[4061 -> 4088] At the same time, under the large governance framework of the board of directors and the board of shareholders, we will also make a good balance between the current payment costs and our profit target. In general, the launch of our new employee incentive plan will not cause any impact on our existing company's profit. Thank you for your attention.
[4088 -> 4118] Because of time constraints, I would like to ask the last question. I see a lot of online questions. I saw an investor ask a question earlier. He asked if there is a significant difference between our primary and secondary markets. What are the differences in competition? I would like to ask Mr. Hai to answer this question.
[4119 -> 4146] First of all, Tongcheng has been paying a lot of attention to the downstream market, and the operating contribution of the downstream market has also been improving year after year. We focus on two aspects of the downstream market. On the one hand, it is the customer's demand. We think that there are a lot of KAs whose growth point or potential point needs a lot of attention.
[4147 -> 4175] So based on the needs of the customers, we started from the customer's needs and did a lot of this demand. The second is that in the downtown market, compared to the big cities, the biggest difference is that the commercial right to speak may be a little bit bigger, and the big cities may need more platforms. So in this competition, we are the result of the downtown market.
[4175 -> 4187] I think that's a good thing.
[4189 -> 4219] Thank you to all the investors and analysts for participating in today's press conference. Thank you for your questions. Due to time constraints, our conference is coming to an end. I would like to thank you all again on behalf of Shengfeng's management team for attending today's conference. If you have any further questions, please feel free to contact the company's team after the conference. If we don't get to answer all of your questions today,
[4219 -> 4226] Thank you for your attention.