TigerResearch/tigerbot-earning-plugin huggingface dataset:
(2) The corresponding relationship between the operating segments and the Company’s principal business segments was: the express segment included time- definite express and economy express businesses other than large parcel express business included in the responsibility of the large parcel organization mentioned in item (1), as well as cold shipping and pharmaceutical businesses; the freight segment included the large parcel express business, and freight business; the intra-city segment was mainly intra-city on-demand delivery business; the supply chain and international segment mainly was international express business, international freight and freight forwarding business, and supply chain business; the undistributed units mainly included segments of non- principal logistics and freight forwarding, including investment, industrial parks and other functional segments of the headquarters.
Note:  The Company does not have other profit and loss items that meet the definition of non-recurring profit or loss; the Company does not define the non-
recurring profit or loss listed in the Explanatory Announcement No. 1 on Information Disclosure of Companies Offering Securities to the Public Non- recurring Profit or Loss as recurring profit or loss.
Differences in accounting data under domestic and foreign accounting standards
1. Difference in the net profit and net assets in the financial reports disclosed in accordance with the International Accounting Standards and the Chinese Accounting Standards:
2. Difference in the net profit and net assets in the financial reports disclosed in accordance with overseas accounting standards and in accordance with the Chinese Accounting Standards:
I. Industry Review in 2022
1. Environment and Growth of the Logistics Industry
I) China’s macro-economy has achieved a steady growth, and its economic operation is more resilient than ever before. In the era of VUCA, the externa l env ironment is increasingly uncertain. Inflation in Europe and the United States, rising energy prices, the sluggish consumer spending, geopolitical risks, and other factors are affecting the normal development of global economy and trade. Even though being confronted with numerous difficulties, China’s economic operation is generally stable, highlighting its development resilience. According to the data published by National Bureau of Statistics, the annual GDP of China totaled RMB121.02 trillion in 2022, representing an increase of 3.0% over the previous year at constant prices. China has the world’s second largest economy by GDP. China’s total import & export values totaled RMB42.07 trillion in 2022, representing an increase of 7.7% over the previous year. The total value of exports showed a year-on-year increase of 10.5%.
II) The size of the consumer market in 2022 was flat compared to that in 2021, and online shopping penetration rate increased in 2022. The demands for domestic consumer market are yet to recover. According to the data published by the National Bureau of Statistics, the total retail sales of consumer goods of 2022 was RMB43.97 trillion, representing a decrease of0.2% over the previous year. The retail sales of goods increased by 0.5%, and the catering revenue decreased by 6.3%. The online retail sales of physical goods of 2022 in China were RMB11.96 tr i ll ion, representing a year-on-year increase of 6.2%. The percentage of the online retail sales of physical goods in the total retail sales of consumer goods in 2022 was 27.2%, representing a year-on-year increase of 2.7%. The penetration rate of online shopping further increased.
III) The logistics market was under short-term pressure, and China’s express delivery sector was still growing. Logistics is the weatherglass of the economy. In 2022, the domestic logistics industry was under pressures from limited demand and rising costs, which disturbed both the demand and supply of the logistic supply chain, but the overall operation was stable. According to the data published by China Federation of Logistics & Purchasing, the average Logistics Prosperity Index of 2022 was 48.5%, down by 4.9 percentage points as compared to last year. The total cost of social logistics was RMB17.8 trillion, representing a year-on-year increase of 4.4%. The percentage of the total cost of social logistics in GDP was 14.7%. According to the data published by the State Post Bureau, 110.58 billion deliveries were made in China in 2022, representing a year-on-year increase of2.1%. In terms of parcel volume, China has ranked first in the world for nine years in a row. The revenue of China’s express delivery business of 2022 was RMB1.06 trillion, representing a year-on-year increase of 2.3%. The Average Selling Price (ASP) increased steadily, indicating that the express delivery industry in China was heading for high-quality development.
2. Industry planning and policy directions
I) Chinese government is dedicated to expanding domestic demand and promote economic development, which is conducive to the recovery of the logistics industry. In December 2022, the Central Economic Work Conference made clear that “putting forth effort to expand domestic demand and recover and expand consumption”should be prioritized for the macro-control of 2023. According to the Outline of the Strategic Plan to Expand Domestic Demand (2022-2035)* (《扩大内需战略规划纲要(2022-2035 年)》) issued by the Central Committee of the Chinese Community Party and the State Council and the Implementation Plan for Expanding Domestic Demand During the“14th Five-Year Plan”Period* (《“十四五”扩大内需战略实施方案》) issued by the National Development and Reform Commission, expanding domestic demand has become an important part of China’s policies. Expanding domestic demand will bring opportunities to the development of the logistics industry as consumption and manufacturing recover.
II) China vigorously promotes the construction of modern logistics. In May 2022, the State Council issued the Plan for Modern Logistics Development During the “14th Five-Year Plan” Period, which is the first national five-year plan in the field of modern logistics, making clear that promoting the modernization of the logistics industry has national strategic significance.
(1) The log ist ics infrastructure has been comprehens ive ly improved, and China will vigorously support the construction of national logistics hubs, international transit hubs, air cargo hubs, high-speed rail freight, cold chain logistics and other infrastructure. (2) Industry standards have been improved, and the logistics standard specification system has been further improved. Standardized, containerized and modular logistics loading tools and packaging basic modules have been widely used. (3) The innovation ability and competitiveness of enterprises have been significantly enhanced, encouraging the digital transformation of the logistics industry, promoting the integrated development of the logistics industry and manufacturing industry, cultivating backbone logistics enterprises and well-known service brands with international competitiveness, and supporting the development of “specialized, proficient, special and new”modern logistics enterprises.
III) Encouraging the express delivery enterprises to “cover rural areas, connect with manufacturers and go overseas” has become the long-term development plan of the country for the express delivery industry. (1) In terms of covering rural areas, some of the proposals of the Opinions on Effectively Comp let ing the Key Work of Comprehens ive ly Promot ing Rural Revitalization in 2022 (Document No. 1 of the Central Government for 2022) are as follows: To speed up the network development of express delivery service networks in rural areas, to carry out the program of “express delivery covering rural areas*(快递进村)”, encouraging the development of integrated stations featuring passenger transport, freight transport and postal service in villages and towns and integrated stations of postal and delivery enterprises and logistics enterprises in rural areas, promoting the unified delivery for counties, townships and villages, speeding up the program of the transport of agricultural products from rural areas to cities with “Internet Plus”, promoting the establishment
of a long-term and stable relation between production and marketing, expanding the networks of cold chain logistics in rural areas and promoting the construction of the infrastructure for the warehousing and storage in the growing areas of different agricultural products, preservation and cold chain logistics in counties. (2) In terms of connecting with manufacturers, the State Post Bureau carried out the “5312”project program of serving the advanced manufacturing industry with express delivery service and the typical project of in-depth integration of national express delivery service and the advanced manufacturing industry. The State Post Bureau was taking the establishment and development of pilot zones to a higher level. The following actions shall be taken: improving the coverage of express delivery facilities and services in manufacturing parks; establishing direct links between production and marketing for key express delivery enterprises and key manufacturers to establish mutually beneficial, all win, long-term and stable strategic cooperative relations.
(3) In terms of going overseas, express delivery enterprises and advanced manufacturers are encouraged to cooperate with each other to set up an independent, controllable, safe and reliable international postal and delivery logistics supply chain, support express delivery enterprises to actively develop overseas businesses, improve the capacity of domestic and international postal and delivery hubs, develop multi-modal transport featuring land transport, water transport and air transport, improve the international comprehensive transport capacity, and enhance the stability of the industrial chain.
IV) The logistics industry development focuses on intelligent and green logistics. (1) According to the Plan for Modern Logistics Development During the “14th Five-Year Plan”Period, the following actions shall be taken: accelerating the digital transformat ion of log ist ics, promot ing the transformat ion and upgradation of logistics infrastructure by classification, acce lerat ing the construct ion of re levant fac i l it ies of the internet of things (IoT), developing new logistics infrastructure(e .g . inte l l igent log ist ics hubs , inte l l igent log ist ics parks , inte l l igent warehouse log ist ics bases, inte l l igent ports and d ig ita l warehouses), expand ing the commerc ia l app l icat ion scenarios of intelligent logistics, promoting the application of automation, unmanned and intelligent logistics technologies and equipment, automatic perception, automatic control, intelligent decision-making technologies and other technologies. (2) Relevant policies laid stress on the importance of green logistics. The State Post Bureau launched the “9917”program of green development, focusing on promoting logistics enterprises to strengthen green energy conservation and low-carbon management, strengthen the research and development and application of new green logistics technologies and equipment, promote the use of recycled packaging, reduce excessive packaging and secondary packaging, and accelerate the standardization of the logistics industry. The Company saw effective improvement in green express packaging in 2022. Nearly 15 million recyclable express boxes were placed, and 700 million corrugated boxes were recycled and reused respectively by delivery companies throughout the year.
3. Industry landscape , compet it ion and development
I) Express delivery industry focuses on service quality competition. (1) In terms of industry supervision, the government strengthens the guidance and supervision of the express industry to intensify protection of the sound and positive development
of the express delivery market as well as the legitimate rights and interests of couriers. The “price war”trend of the express delivery market was promptly curbed. (2) In terms of market demand, the consumer market growth was slowing down, while the marketing channels and traffic were more diversified. As the new e-commerce platforms (e.g., live streaming and short video clips) were rapidly emerging in the last two years, the large platforms and corporate customers paid more attention to consumer service experience than ever before, and therefore asked for shorter delivery time and better service quality. Express delivery enterprises were given impetus to change the ways how they compete from “same quality with a lower price”to“diversities in quality and customer bases”. (3) In terms of the supply of the logistics industry, “the Matthew effect”remained. According to the data published by the State Post Bureau, the CR8 of express delivery service brands of 2022 was 84.5%, higher than 80.5% of 2021, and the concentration ratio was further improved. However, in the context of the slowdown of upstream incremental demand and the limited space for cutting costs, the competition among leading express delivery enterprises was intensifying. Express delivery enterprises actively promoted service and products stratification, enhanced networks capabilities, and improved outlets service. The competition in the logistics industry has gradually shifted from the price war to the competition for service quality, differentiation and diversities in services and the stability of networks.
II) Industry integration through mergers and acquisitions continued in China. Concentration ratio of express delivery industry remained high in 2022, whereas that of other logistics sectors in China (e.g., less-than-truck-load transport, cold chains, integrated logistics and cross-border logistics) were still low. According to the list of China’s Top 50 logistics Enterprises for the Year 2022*(2022 年度中国物流企业50强) pub l ished by China Federation of Logistics & Purchasing, the total revenue of the top 50 logistics enterprises on the list for the year 2022 was RMB1.94 trillion, accounting for approximately 15% of the revenue of the entire logistics market, which indicated that the concentration ratio of China’s logistics market was relatively low, thus huge potential for industry integration. International logistics giants all expand through continuous mergers, acquisitions and integration. The size of China’s logistics market has the potential to cu lt ivate the wor ld’s lead ing logistics players. With the gradual macroeconomic recovery, it is expected that the logistics industry’s domestic and foreign investment and financing as well as the integration through M&As will become more active than ever before.
III) Continuous transformation of logistics services towards digital supply chains. The digital era features more diversified business models and channels with less middlemen than ever before. The production and supply model has shifted from producing on a large scale to a small scale and delivering in batches. Therefore, an increas ing number of enterpr ise customers have begun to build a consumer-centric, flexible, agile and responsive digital supply chain system to adapt to the current market competition environment. Logistics players pay more attention to their own digital construction to improve service efficiency and network flexibility. The application of advanced logistics technology and in-depth cooperation with industry customers help to promote the digital transformation of customers’supply chains, and reduce costs and increase efficiency, which has become a new important competitive advantage trying to be built by logistics enterprises.
IV) Map out their global service networks and build stable international supply chains. It is increasingly urgent to regain the vitality of taking the place of “Made in China”on the international market. The global networks and operation capacity of logistics industry give strong backing to the establishment of the “external (international) circulation”. As the “Made in China”and Chinese brands are embedded in the global value chains with increasingly prominent positions, and they need to be supported by services of logistics networks with a global coverage. Cross-border e-commerce has developed rapidly, and its potentialities are further brought into play. According to the data published by the National Bureau of Statistics, the import and export values of China’s cross-border e-commerce totaled RMB2.11 trillion in 2022, representing a year-on-year increase of 9.8%. The tota l va lue of exports was RMB1.55 trillion, representing a year-on-year increase of 11.7%. In the long run, the improvement of the capacity and brand competitiveness of China’s industrial chains and the expansion of overseas e-commerce platforms and e-commerce websites in the global consumer market w i l l create a favorab le env ironment and opportunities for Chinese logistics enterprises to go abroad.
V) The importance of green logistics continues to increase. The logistics industry pays more attention to sustainable and healthy development than ever before. Logistics enterprises keep on strengthening the green logistics transformation and increasing the investment in technology, automation equipment and green low-carbon consumables. China’s Dual-Carbon strategy encourages logistics enterprises to explore green and low-carbon development modes, e.g., dispensing and using new energy transport vehicles, green packaging research and development, and green warehouse construct ion. Corporate customers ’ demand for carbon reduction has become increasingly prominent. Customers need low-carbon green supply chains and logistics services to reduce their carbon emissions. Therefore, low-carbon and green services are becoming an important competitiveness of logistics enterprises.
4. Position and competitive edge of SF in the logistics industry
SF Holding, with an operating revenue of RMB267.5 billion in 2022, is the largest integrated service provider in the field of express delivery logistics in China and the fourth largest in the world. By adhering to long-term sustainable and healthy development and forward-looking long-term strategic plans, the Company seized lots of opportunities, expanded its scale and led the industry in a sustained way in the past three decades since establishment.
I) The Company has a diversified logistics network with a domestic and global coverage, and the Company is capable of offering domestic and international end-to-end supply chain services. Through endogenous development and M&A, the Company has developed one-stop comprehensive logistics service networks with a better product matrix, an improved coverage and more service scenarios. The Company serves the end-to-end supply chain for customers, covering production and sale at home and abroad. As Ezhou Huahu Airport, the first cargo-focused hub airport in Asia and the fourth in the world, went into operation
officially in 2022, and SF Terminal Forwarding center* (顺丰枢纽转运中心) will go into operation officially in 2023 center, they will become an important strategic infrastructure for the Company to follow the dual circulation strategy, build a central land-sea corridor and an air transport corridor, and help the Company develop logistics networks with international competitiveness, connecting China with the rest of the world.
II) The Company stays ahead of its competitors in multiple logistics segments. Relying on the fast, punctual and safe door-to-door service capability, the Company’s time-definite express business holds a safe lead in the domestic market. After years of incubation and M&A integration, the Company also leads the competition in other business segments. According to the List of Less-than-truck-load Transport Enterprises in China for the Year 2022* (2022 中国零担企业排行榜) published by Wetuc Think Tank* (运联智库), SF Freight ranked first for three years in a row in terms of the revenue from less-than-truck-load transport and the volume of goods transported. According to the list of Top100 Cold Chain Logistics Enterprises in China* (中国冷链物流百强企业) published by China Federation of Logistics & Purchasing at the “14th Global Cold Chain Summit 2022”, SF Cold Chain Logistics ranked first for four years in a row. According to the data published by iResearch, SF INTRA-CITY is China’s largest independent th ird-party instant de l ivery serv ice p latform . According to the List of Top 50 Enterprises in Cross-border E-commerce Logistics for the Year of 2022* (2022 跨境电商物流50 强榜单) published by Wetuc Think Tank* (运联智库), SF international Express ranked fourth. According to the list of Top50 Global Freight Forwarders for the Year 2022* (2022 年度全球货代50 强榜单) jointly published by Armstrong & Associates (an American logistics consulting agency) and Transport Topics, Kerry Logistics ranked ninth on the list of water transport and twelfth on the list of air transport.
III) Relying on industry-leading technology, the Company promotes supply chains digitalization within the company and for the customers. The Company aims to link up internal complex business scenarios and rich logistics resources with techno logy  empowe rmen t .  The  Company  p romo tes  the transformation of its operation with end-to-end digitalization, achieving a better network layout and resource planning and improving the Company’s operational efficiency and service competitiveness. By leveraging the application of advanced logistics technology to offer digital supply chain solutions, SF was enabled to work with more industry customers to renovate supply chains, and improve digitalization and intelligence of the supply chains in various industries. Technological empowerment+ supply chain planning has become unique competitive edge of the Company, making it stands out from the rest of the market players who provide logistics services or technical services only.
For details of our core competitiveness, please refer to “3. Core competitiveness”in “Chapter 3 Management Discussion and Analysis”.
In general, China’s logistics market is huge. Although SF leads the competition in every business segment, SF can still increase its market share substantially. The long-term strategic vision, forward-looking business layout, innovative product capabilities, high-quality services and strong scientific and technological strengths will help SF break through the competition and realize long-term development with a solid foundation.
II.  Business development of the Company
SF Holding is the largest integrated logistics service provider in China and the fourth largest in the world. Focusing on the logistics ecosystem, the Company has consistently built on its service capabilities, and has diversified into eight segments, namely time-definite express, economy express, freight, cold chain and pharmaceutical, intra-city on-demand delivery, supply chain and international business(including international express, international freight and freight forwarding, and supply chain), which can provide customers with domestic and international end-to-end one-stop supply chain services. Meanwhile, leveraging our leading technology research and development capabilities, we will strive to create a digital supply chain ecosystem, and become a front runner in the global smart supply chain.
Express Logistics
Supply Chain and International
Large parcel by land: Provide large parcels for B2C e-commerce, with allocation from B2C store/ less-than-carload freight for large parcel/transportation in vehicles;
Extended services: large parcel warehousing and distribution, moving, store distribution, delivery and installation integration, and other scenarios;
SF Freight operates a self-operated network to serve high-end customers while SX Freight franchise network is oriented to lower-tier e-commerce markets.“SF Express”operates a self-operated network to serve e-commerce platforms and merchants calling for excellent user experience and
stable time ef ciency with door-to-door delivery;
“Fengwang Express”has a franchise network to serve lower-tier e-commerce market players with affordable pricing adopted; Integrated warehousing and distribution service to serve warehousing needs with several service and pricing levels,
with nationwide sub-warehouses, smart cloud-based warehouses etc.