Couriers reap rich harvest in January

Sales revenue in the lead-up to Spring Festival soars on boom in e-commerce

January has proved to be a big month revenue-wise for China's major listed companies specializing in courier, delivery or logistics services.

This was a sharp contrast to their performance in the same month of 2020 when the COVID-19 outbreak savaged their sales.

Analysts said demand for e-commerce services surged early this year as more people stocked up and e-shopped in the run-up to Spring Festival.

To cut down on risks from the contagion, consumers in urban areas stayed in the cities where they work and live during the seven-day Lunar New Year holiday from Feb 10 to 16.

Four A-share listed courier companies reported significant year-on-year rise in their January sales revenue.

According to the filing to the bourses late on Friday, SF Holding Co Ltd reported a surge of 40.91 percent in revenue to 16.39 billion yuan ($2.54 billion) in January, and its single-month courier business volume swelled 59.54 percent year-on-year to reach 903 million units.

SF credited its impressive earnings to the development of new business and the disparity effect of the Lunar New Year, which started in mid-February this year whereas it started in late January last year.

SF's business volume grew 4 percent in January from a month earlier, approaching the peak of last November, according to a report by Ming Xing, an analyst with Essence Securities.

The other three listed delivery/courier companies' performance was also robust.

Yunda Express reported its package delivery service revenue surged 70.68 percent year-on-year to 3.09 billion yuan in January, and its business volume more than doubled to 1.39 billion units.

Yunda Express currently holds the greatest market share of 16.3 percent among Chinese couriers, according to Huachuang Securities' data.

YTO Express saw its business volume more than double to 1.27 billion units, and its revenue from delivery services increased 74.87 percent to 3.01 billion yuan.

Likewise, STO Express' service and business revenue in January reached 2.12 billion yuan, up 59.64 percent year-on-year, and its volume of business soared 110.25 percent year-on-year to 843 million units.

The booming business volume is also attributable to this year's particular condition that a large number of Chinese chose to stay put in their cities during the Spring Festival holiday, said the Essence Securities report.

"The new phenomenon has created the unprecedented demand for delivery services. As a result, the conventional Spring Festival travel rush was replaced with a package flux," said Wang Jingtian, an analyst with China Galaxy Securities.

Official data showed passenger flows were only 25 percent of the pre-epidemic level in the first 18 days of the Spring Festival travel peak period this year.

However, total courier package deliveries handled nationwide on Lunar New Year's Eve and Lunar New Year's Day exceeded 130 million, soaring 223 percent year-on-year, Wang said.

As measures to contain COVID-19 are still on, shopping online has become the choice of many Chinese consumers, and demand became stronger due to requirements for buying special goods of the Lunar New Year, said analysts.

As many as 8.49 billion packages were delivered across the nation in January, up 124.7 percent year-on-year, according to data from the State Post Bureau, and courier delivery firms benefited mostly from the e-commerce boom.

On Feb 16, JD Logistics, the logistics unit of Chinese e-commerce giant JD, filed for IPO in Hong Kong. JD Logistics said it will use the proceeds to upgrade and expand its logistics network, develop supply chain solutions and logistics service-related technologies.

Competition will intensify among e-commerce-related logistics businesses this year, and this process will lead to a shake-up, rationalizing the number of players in the market, said Huangfu Xiaohan, an analyst with Guotai Junan Securities, in an interview with Jiemian.