Jingdong Logistics 14 Years: From Scratch To HK $250 Billion "Big Mac"

At about 9:00 am on May 28, the first floor hall of Jingdong headquarters in Beijing Economic and Technological Development Zone was crowded.

On the red background board, "Jingdong Logistics Hong Kong listing celebration ceremony" is very impressive. Before the gongs with Jingdong Logistics logo and 2618. HK Stock code, Jingdong Logistics executives, partners, investors and so on took photos. Everyone is waiting for that moment.

The clock points to 9:30, and the gongs sound under the drumsticks of nine percussionists, and Jingdong Logistics officially landed on the main board of Hong Kong stock market. Compared with the offering price of HK $40.36, JD logistics opened 14.1% higher in the morning, with a peak of HK $47.7, up 18.19%, and its market value exceeded HK $280 billion. By the end of the day, JD logistics closed at HK $41.70, narrowing its rise to 3.32%, with a market value of more than HK $250 billion.

Since its establishment in 2007, in the past 14 years, the outside world has been questioning Jingdong Logistics for a long time“ Before, everyone thought that Jingdong Logistics was burning money, which was a drag on its competitiveness. But I'm afraid no one could have thought that Jingdong's self built logistics could be valued at more than 200 billion today. " Some observers who have long been concerned about Jingdong Logistics told the reporter of the 21st century economic report.

Now the dispute began to resolve, the outside world to Jingdong Logistics with more expectations“ The market expectation value of Jingdong Logistics can be seen from the new projects of tiger securities Tiger securities investment research team told the 21st century economic reporter, "in the long run, Jingdong Logistics is still a scarce target. The development prospect of integrated supply chain logistics industry is good, and the future of Jingdong Logistics is still worth looking forward to."

The attitude of capital market to Jingdong Logistics, to a large extent, depends on its future growth potential. Visual China

14 years of entrepreneurship

If we say that Jingdong before 2007 can only be regarded as the imitator of Amazon, then after the self built logistics in 2007, Jingdong has really gone out of its own characteristics.

Entrepreneurial stories have been circulated many times. In 2007, in the face of customers' complaints about slow delivery and damaged goods and other logistics related problems, the founder of Jingdong group, Liu qiangdong, insisted on self built logistics. In August of that year, Jingdong Logistics began to pilot in a small scale in Beijing. In May 2008, Beijing Distribution Station opened five stations. By 2010, Jingdong's own distribution has covered Beijing's Fifth Ring Road.

"At that time, the phenomenon of savage unloading and loading in the logistics industry was serious and chaotic. Jingdong could not change the industry. It only considered that self built logistics could reduce customer complaints and attract more users to Jingdong for consumption, so it started to build its own logistics." The aforementioned observers told reporters.

By 2010, in the wild growth of express delivery industry, the user experience of Jingdong Logistics can be described as "amazing"“ That will listen to the introduction of friends, Jingdong Mall to buy electronic products is not bad, so in the form of cash on delivery of an order for a laptop, quickly delivered. " A longtime Jingdong user in Beijing recalled his first shopping experience to 21st century economic reporter.

But what really impressed her was a shopping experience later. The first shopping experience on Jingdong platform was good, and the user ordered another hot kettle. However, half a day later, the user regretted the "impulse shopping"“ Who knows when I was just about to cancel the order, Jingdong's express brother called me to say that the kettle had been delivered, and he couldn't help crying or laughing, but he still signed for it later. From then on, I remember Jingdong. "

Although it has gained a lot of word-of-mouth at the user end, Jingdong Logistics has been faced with numerous doubts since its establishment. Xu Xin, an early investor of Jingdong and today's capital, has made a calculation that only when Jingdong invests in warehousing and logistics, can a single city deliver 2000 orders a day to break even. For Jingdong, which only processes 3000 orders a day in 2007, self built logistics means long-term loss and money burning.

In addition, considering that logistics is a high input industry with both human and assets, the continuous expansion of scale does not mean the end of burning money. In 2015, Ma Yun, founder of Alibaba group, asserted that JD would be seriously dragged down by the asset heavy model of JD logistics, which would affect the overall development of the company. However, it would be much easier for Alibaba to only provide platform services and not build the asset light mode of logistics.

However, this time, Ma Yun miscalculated, and now Jingdong Logistics has not only become one of the core competitiveness of Jingdong, but also began to move towards its own "hematopoietic" road. After the realization of specialization and scale, at the end of 2016, Jingdong Logistics officially opened to the society three major services: warehouse distribution integrated supply chain service, express delivery and logistics cloud. In 2017, JD logistics was separated from the group and operated independently.

The effect of opening up is gradually showing. According to the hearing data, in 2018, 2019 and 2020, the revenue of Jingdong Logistics was 37.9 billion yuan, 49.8 billion yuan and 73.4 billion yuan respectively, of which, the year-on-year growth in 2019 and 2020 was 31.6% and 47.2% respectively. During Q1 of 2021, the revenue of Jingdong Logistics was 22.4 billion yuan, with a year-on-year increase of 64.1%, which continued to be in a state of rapid growth.

In terms of external revenue, the proportion of external customer revenue of JD logistics has increased from 29.9% in 2018 and 38.4% in 2019 to 46.6% in 2020.

In terms of profitability, although the net losses of Jingdong Logistics in 2018, 2019 and 2020 were 2.765 billion yuan, 2.238 billion yuan and 4.037 billion yuan respectively, it seems that the losses were intensified, but after adjustment, the losses in 2018 and 2019 were 1.615 billion yuan and 924 million yuan, and the losses were turned back to 1.710 billion yuan in 2020.

According to Jingdong, the main reasons for the loss are the significant increase in costs related to the logistics infrastructure construction network, plus other operating expenses, as well as non operating losses, such as changes in the fair value of convertible redeemable preferred shares. After the adjustment of the profitability, more can reflect that Jingdong Logistics has its own "hematopoietic" capacity.

The future of Jingdong Logistics

From the new enthusiasm of Jingdong Logistics, we can see the attitude of investors to Jingdong Logistics.

"Jingdong Logistics is a new target with better asset quality in the near future, and it is also the third listed company under Jingdong." Tiger securities investment research team to the 21st century economic report reporter analysis said, "due to the previous healthy listing of Jingdong left sufficient space for the capital market, the first day of listing soared 56%, more than twice the IPO price in a few days. Therefore, this Jingdong Logistics attracted many investors to participate, with more than 1.37 million new players, far exceeding the previous popular stocks of Jingdong health and Nongfu Shanquan."

However, on the first day of the market opening, after a short rush, Jingdong Logistics showed a downward trend. In the view of professionals, this is related to the issuance valuation of JD logistics and the overall environment of IPO, but after adding multiple factors, the first day performance of JD logistics is still fair.

"According to the revenue forecast of Jingdong Logistics in 2021, the current PS valuation is about 1.9 times. Referring to the average 2.1 times PS valuation of SF holdings in recent three years, the current valuation of JD logistics is reasonable, but it does not have obvious advantages compared with SF holdings." Tiger securities investment research team pointed out that "superposition of the current IPO environment is relatively low, the first day performance of Jingdong Logistics is in line with expectations."

The attitude of capital market to Jingdong Logistics, to a large extent, depends on its future growth potential. It should be noted that the integrated supply chain logistics service market of Jingdong Logistics is a subdivision field of outsourcing logistics. Different from isolated logistics enterprises, integrated supply chain logistics service providers have the ability to provide comprehensive logistics services, including express delivery, vehicle and LCL transportation, last mile distribution, warehousing and other value-added services (such as door-to-door installation and after-sales services).

According to the insightful consulting report, in recent years, China's outsourcing logistics service market has developed rapidly, which is expected to increase from 6.5 trillion yuan in 2020 to 9.2 trillion yuan in 2025, with a compound annual growth rate of 7.1%, which is higher than the compound annual growth rate of total logistics expenditure in the same period. The outsourcing logistics service penetration rate is expected to increase from 44% in 2020 to 48% in 2025.

"Jingdong Logistics is not a general third-party logistics or express service provider." Yang Daqing, a senior logistics industry personage, analyzed to the 21st century economic reporter that Jingdong Logistics has been exploring the production and manufacturing services such as production workshops, integrating the services of multiple links in the supply chain, and helping the production enterprises to more accurately meet the demand based on the demand forecast.

At the same time, Yang Daqing believes that the service collaboration constructed by Jingdong Logistics, Jingdong Mall and Jingdong science and technology has gone beyond the warehouse distribution integrated service of traditional express enterprises, and based on the optimization of supply chain process, it helps brand companies to establish an agile supply chain system. In addition, Jingdong Logistics has established advantages in logistics informatization, digitization and intellectualization, "which makes Jingdong Logistics have comprehensive comparative advantages."

The change of income structure of external customers of Jingdong Logistics is the direct proof of its independent development“ At present, JD logistics is gradually involved in the logistics services of high-end manufacturing enterprises, mining new profit sources along the industrial chain supply chain, and opening up a new space for Jingdong in the digital supply chain ecosystem. " Yang Daqing pointed out that "in the future, it may not only be Jingdong Mall's support for Jingdong Logistics, but may form Jingdong Logistics, which will support Jingdong Mall based on its huge modern logistics service system."

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