2020 1q earnings presentation...2020 1q earnings presentation may 27th, 2020 1 disclaimer this...

2020 1Q Earnings PresentationMay 27th, 2020

1

Disclaimer

This presentation has been prepared by BEST Inc. (the “Company”) solely for informational purposes and have not been independently verified. No representations or warranties, express or

implied, are made by the Company or any of its affiliates, directors, officers, employees, advisors, or representatives with respect to, and no reliance should be placed, on the accuracy, fairness

or completeness of the information presented or contained in these materials. None of the Company nor any of its affiliates, directors, officers, employees, advisers or representatives accepts

any responsibility or liability whatsoever for any loss howsoever arising from any information presented or contained in or derived from these materials. The information presented or contained

in these materials is as of the date hereof and is subject to change without notice and its accuracy, fairness or completeness is not guaranteed.

This presentation contains forward-looking statements. All statements, other than statements of historical facts, contained in this presentation, including, without limitation, statements

regarding our strategy and market opportunities, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-

looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and

similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are forward-looking

statements within the meaning of the U.S. securities laws. These forward-looking statements are made only, and are based on estimates and information available to the Company, as of the

date of this presentation, and are not guarantees of future performance. These forward-looking statements are based on a number of assumptions which are subject to known and unknown

risks, uncertainties and other factors that are beyond the Company’s control, such as the political, social, legal and economic environment in which the Company will operate in the future.

Accordingly, actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements and future results could materially differ

from historical performance. Further information regarding these and other risks is included in the Company’s filings with the SEC. The Company undertakes no obligation to update or revise

these forward-looking statements for events or circumstances that occur subsequent to the date of this presentation.

Nothing herein constitutes an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company in any jurisdiction or any inducement to enter into investment

activity, or may form the basis of or be relied on in connection with any contract or commitment whatsoever.

This presentation contains certain financial measures that are not recognized under generally accepted accounting principles in the United States (“GAAP”), such as “Non-GAAP Net Loss/Profit”

, “Non-GAAP Net Loss/Profit Margin”, “EBITDA”, “EBITDA Margin”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted Total Operating Expenses”, “Adjusted Selling Expenses”, “Adjusted

General and Administrative Expenses” and “Adjusted Research and Development Expenses”. Such non-GAAP financial measures have limitations as analytical tools. The presentation of such

non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. These non-GAAP

measures may differ from the non-GAAP information used by other companies and therefore their comparability may be limited.

2

COVID-19 Response

3

Prioritized the health and safety of our employees and customers

Ensured strong balance sheet and liquidity position

Positioned ourselves for opportunities as conditions recover

Committed our resources early and often to fight against COVID-19

o On January 24, BEST established a “green channel” to provide free transportation of medical supplies to Hubei Province and other areas in China impacted by the COVID-

19 outbreak. BEST Express, BEST Freight, BEST Supply Chain and BEST Store+ have all played a part in the shipping of medical and relief supplies.

o Between January 24 and March 11, BEST arranged for and paid for 83 vehicles delivering more than 170,000 items (approximately 1,000 tons) of medical and relief

supplies. The donations, including medical masks, goggles, gloves, bedsheets, medical equipment, medicine and food, were worth more than RMB50 million. These

items were shipped to designated hospitals and charitable organizations in Hubei Province and other heavily impacted areas in China.

o BEST also leveraged its expertise in cross-border logistics. With BEST’s assistance in transportation, transits, and customs clearance, medical supplies including

protective clothing, goggles and masks, were sent to China from the United States, Brazil, South Korea, Malaysia, Thailand, Vietnam and Japan.

o Concurrently, we also took further steps to protect the safety of our frontline staff and customers overseas. About 400,000 masks have been distributed to our

subsidiaries in Malaysia, Thailand, the United States and Vietnam.

Notes:

All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.

1st Quarter 2020 Highlights and Strategic Updates

• Continued pursuing key strategic initiatives

o Optimization of logistics and supply chain network:

Improved transportation efficiency for both Express and Freight by capacity sharing

Continued to enhance automation for its +hubs and sortation centers to drive down unit costs

o Emphasis on synergies across business units

Stressed the e-commerce aspect of its transportation service as well as its supply chain management business

Achieved strong business-to-consumer (B2C) order growth during the quarter

o Improvement of quality of service

Continued to enhance network flexibility, density of last mile service outlets, and customer experience

• Maintained strong balance sheet and liquidity

o Cash and cash equivalents, restricted cash, and short-term investments totalling RMB4.2 billion at the end of the first quarter

• Initiated cost reduction measures: target a total savings of RMB100 million to RMB150 million in CAPEX and operating expenses in the next 12 months

• Strategic review: continue to evaluate potential spin-off of certain business units, which would improve company’s profitability while allow those units to

independently raise capital for future growth

4

Financial Results

5

Financial Highlights – 1st Quarter, 2020

Notes:


1. Starting in 2017, the Company revised its arrangements with franchisees and the scope of its service. As a result, the Company became the principal that is directly responsible for last-mile delivery of all parcels and freight processed through its network, and the Company is liable to senders for damage to or loss of parcels and freight in connection

with last-mile delivery. Therefore, in consideration of such expanded scope of services and increased responsibilities, the Company included the last-mile delivery service fee in its revenue.

2. Before the completion of the Company’s IPO in September 2017, no SBC expense had been recognized. Upon completion of the I PO, the Company immediately recognized a substantial amount of SBC expense associated with vested share-based awards, especially in the fourth quarter of 2017.

3. Non-GAAP net loss represents net loss excluding SBC expense, amortization of intangible assets resulting from business acquis itions and fair value change of equity investments.

6

486

1,4411,959

110293

(177)

2.4% 5.2% 5.6% 2.2% 4.3%

(3.2%)

2017 2018 2019 1Q2018 1Q2019 1Q2020Gross Profit/(Loss) Gross Profit/(Loss) Margin %

5,004 6,875 5,465

19,990

27,961

35,176

2017 2018 2019 1Q2018 1Q2019 1Q2020

RevenueRMB mm

Gross Profit/(Loss)RMB mm

35.9%FY 2018 – FY 2019 YoY

1

(923)

(452)

(124)

(315)(208)

(712)

(4.6%)

(1.6%)

(0.6%)

(6.3%)(3.0%)

(13.0%)

2017 2018 2019 1Q18 1Q19 1Q20

Non-GAAP Net Income/(Loss) Non-GAAP Net Income/(Loss) Margin

Adjusted EBITDA and Adjusted EBITDA MarginRMB mm

Non-GAAP Net Income/(Loss)3

RMB mm

(583)

(18)

360

(211)

(79)

(580)(2.9%)

(0.1%) 1.0%

(4.2%)

(1.2%)

(10.6%)

2017 2018 2019 1Q18 1Q19 1Q20

Adj. EBITDA Adj. EBITDA Margin

2 2

7.5 ppts1Q19 – 1Q20 YoY

1.1 pptsFY 2018 – FY 2019 YoY

9.4 ppts1Q19 – 1Q20 YoY

1.0 pptsFY 2018 – FY 2019 YoY

10.0 ppts1Q19 – 1Q20 YoY

1

7

Revenue breakdown by segments – 1st Quarter, 2020

Notes:


RMB % of Revenue RMB % of Revenue

Core Logistics and Supply Chain

Express 4,268 62.1% 3,367 61.6% (21.1%)

Freight 988 14.4% 684 12.5% (30.8%)

Supply Chain Management 535 7.8% 408 7.5% (23.8%)

UCargo 441 6.4% 381 7.0% (13.7%)

Capital 48 0.7% 48 0.9% 0.2%

Total Core Logistics and Supply Chain 6,280 91.4% 4,887 89.4% (22.2%)

Store+ 554 8.1% 463 8.5% (16.4%)

Global 41 0.6% 116 2.1% 182.8%

Total Revenue 6,875 100.0% 5,465 100.0% (20.5%)

RMBmm (Except for %)

1Q2019 1Q2020

%Change YoY

Cost trend - 1st Quarter, 2020

Notes:




2. Before the completion of the Company’s IPO in September 2017, no SBC expense had been recognized. Upon completion of the I PO, the Company immediately recognized a substantial amount of SBC expense associated with vested share-based awards, especially in the fourth quarter of 2017.

3. All excluding SBC

8

Adjusted Selling, General & Administrative Expenses3

RMB mm

Adjusted Research & Development Expenses3

RMB mm

1,3571,817 1,952

407 461 485

6.8% 6.5% 5.5%

8.2%

6.7%

8.9%

2017 2018 2019 1Q2018 1Q2019 1Q2020Selling, General & Administrative Expenses Selling, General & Administrative Expenses as % of Revenue

112

175

236

3052 59

0.6% 0.6%

0.7% 0.6% 0.8% 1.1%

2017 2018 2019 1Q2018 1Q2019 1Q2020Research & Development Expenses Research & Development Expenses as % of Revenue

0.1pptsFY 2018 – FY 2019 YoY

0.3ppts1Q19 – 1Q20 YoY

1.0pptsFY 2018 – FY 2019 YoY


1

4,894 6,582 5,642

19,504

26,52033,217

2017 2018 2019 1Q2018 1Q2019 1Q2020

Cost of RevenueRMB mm

1

97.8%

95.7%

103.2%

97.6%

94.8% 94.4%

2017 2018 2019 1Q2018 1Q2019 1Q2020

0.4pptsFY 2018 – FY 2019 YoY


Cost of Revenue as % of RevenueRMB mm

2 2

(RMB mm, ex cept for %)

Revenue 3,367 684 408 381 48 4,887 463 116 5,465

YoY Growth (21.1%) (30.8%) (23.8%) (13.7%) 0.2% (22.2%) (16.4%) 182.8% (20.5%)

Gross Profit (125) (133) 3 8 41 (206) 61 (33) (177)

YoY Growth n/m n/m (85.4%) (11.7%) 15.9% n/m (12.4%) n/m n/m

Gross Profit Margin (3.7%) (19.4%) 0.8% 2.0% 85.4% (4.2%) 13.3% (28.1%) (3.2%)

YoY Growth -6.8ppts -22.8ppts -3.3ppts +0.0ppts +11.6ppts -7.9ppts +0.6ppts -11.8ppts -7.5ppts

Adjusted EBITDA1 (198) (184) (34) (28) 21 (423) (78) (64) (15) (580)

YoY Growth n/m n/m n/m n/m (50.7%) n/m n/m n/m n/m n/m

Adjusted EBITDA1 Margin (5.9%) (27.0%) (8.3%) (7.3%) 43.3% (8.7%) (16.8%) (55.6%) n/a (10.6%)

YoY Growth -8.2ppts -25.9ppts -6.7ppts -7.3ppts -44.7ppts -10.7ppts -3.3ppts -0.8ppts -9.4ppts

Total

Total Core

Logistics

and Supply

Chain

Core Logistics and Supply Chain

9 Notes:


Segment Reporting

26

637

853

(611)

(206)

(1,294)

2017 2018 2019 1Q18 1Q19 1Q20

Operating CashflowsRMB mm

CAPEXRMB mm

750

1,078

1,498

151206

346

2017 2018 2019 1Q18 1Q19 1Q20

Operating cash flow and capital expenditure

As of March 31, 2020, cash and cash equivalents, restricted cash and short-term investments were RMB4.2 billion, compared to RMB5.0 billion as of

December 31, 2019

Notes:




1

10

3.8%*

*As a % of Revenue

3.9%* 4.3%* 3.0%* 3.0%* 6.3%*

Non-GAAP Net Loss FY18 FY19 1Q19 1Q20

Net Loss (508) (219) (233) (751)

Add:

Share-based Compensation Expense1 109 99 22 36

Amortization of Intangible Assets

Resulting from Business Acquisitions 12 11 3 2

Add/(Subtract):

Fair Value Change of Equity Investments (65) (14) - -

Non-GAAP Net Loss (452) (124) (208) (712)

Non-GAAP Net Loss Margin (1.6%) (0.4%) (3.0%) (13.0%)

EBITDA and Adjusted EBITDA FY18 FY19 1Q19 1Q20

Net Loss (508) (219) (233) (751)

Add:

Depreciation & Amortization 462 493 127 118

Interest Expense 75 79 26 33

Income Tax Expense 12 18 4 4

Subtract:

Interest Income (103) (95) (24) (22)

EBITDA (62) 276 (101) (617)

Add:

Share-based Compensation Expense1 109 99 22 36

Add/(Subtract):

Fair Value Change of Equity Investments (65) (14) - -

Adjusted EBITDA (19) 361 (79) (580)

Adjusted EBITDA Margin (0.1%) 1.0% (1.2%) (10.6%)

RMBmm(Except for %)

GAAP to non-GAAP measures reconciliation

Notes:


1. In the first quarter of 2020, the Company recorded share-based compensation (“SBC”) expense of RMB36.2 million, of which approximately RMB0.6 million was allocated to cost of revenue, RMB2.7 million was allocated to selling expenses, RMB31.5 million was allocated to general and administrative expenses, and RMB1.4 million was

allocated to research and development expenses.

11

Business Update

12

Sender /

Recipient

Sender /

Recipient

Core Logistics and Supply Chain: Express

Asset-light business utilizing our network, franchisee partners and 3rd party transportation service providers to provide express delivery of parcels

1Q20 Recap

Parcel volume year-over-year performance slightly below market

o Delayed the opening of hubs and sortation centers, as well as delays for our workers and franchisees to physically get back to their positions as a result of the pandemic

Decrease in gross profit per parcel

o Competitive market dynamics affected pricing

o Increased fixed cost per parcel due to COVID-19

Operations have recovered to full capacity since late March

Strategies

Balanced volume and profitability growth: target above market growth in 2020 while continue to drive down unit cost

Brand building: continue to improve network stability, service quality and enhance customer experience

Technology application: continue to invest in automation to increase productivity and efficiency

Pick-Up/DeliverySorting and Transporting

Service

Stations

Service

Stations

Hubs and

Sortation Centers

Line-Haul Transportation and

Feeder Services*

Hubs and

Sortation Centers

Pick-Up / Delivery

Operated by BEST Operated by Franchisee Partners *All transportation outsourced to 3rd party transportation service providers

13

3,769

5,470

7,576

9501,341 1,316

9.4%

10.8%

11.9%

9.6% 11.0% 10.5%

2017 2018 2019 1Q18 1Q19 1Q20

BEST Express Volume Market Share

1.98 1.48 1.22

1.76 1.41 1.25

1.32 1.61

1.52

1.60 1.68

1.40

3.30 3.09

2.74

3.36 3.09

2.65

2017 2018 2019 1Q18 1Q19 1Q20

Cost per Parcel (ex. Last mile) Last-mile delivery service fee

Express

Parcel Volumemm

Revenue per Parcel 2

RMB

Gross Profit/(Loss) per ParcelRMB

0.09

0.15 0.14

0.03 0.09

(0.09)

2.7%

4.4% 4.7%

0.9%

3.0%

(3.7%)

2017 2018 2019 1Q18 1Q19 1Q20

Gross Profit/(Loss) per Parcel Gross Profit/(Loss) Margin*

Cost of Revenue per ParcelRMB

3.39 3.24 2.88

3.39 3.18

2.56

2017 2018 2019 1Q18 1Q19 1Q20


*Gross Profit Margin is calculated based on revenue per parcel including last-mile delivery service fee starting from 2017Notes:


1. Based on State Post Bureau of China

2. Revenue per parcel includes last-mile delivery service fees



3

14

1 1

0.3pptsFY 2018 – FY 2019 YoY

1.01 0.87

0.76 0.93

0.82 0.69

2017 2018 2019 1Q18 1Q19 1Q20

0.37

0.18

0.13

0.25

0.17 0.15

2017 2018 2019 1Q18 1Q19 1Q20

0.13 0.11 0.10

0.14 0.13 0.15

2017 2018 2019 1Q18 1Q19 1Q20

0.47

0.33 0.24

0.45

0.29 0.26

2017 2018 2019 1Q18 1Q19 1Q20

Transportation Cost per ParcelRMB

Labor Cost per ParcelRMB

Other Costs per ParcelRMB

Lease Cost per ParcelRMB

Express – Cost trend

Notes:


15

Sender /

Recipient

Sender /

Recipient

Core Logistics and Supply Chain: Freight

Asset-light business utilizing our network, franchisee partners and 3rd party transportation service providers to provide LTL and FTL delivery

1Q20 Recap

Business impacted by the pandemic

o Pandemic related slowdowns in manufacturing and 2B activities reduced demand in the quarter, volume declined 15.3% YoY.

Decrease in revenue and increase in cost

o Lower volume and lower ASP resulted from pass-through of a temporary government toll fee waiver to customers resulted in lower revenue. Operating costs were elevated during

recovery period.

Strong recovery

o The Freight network has recovered and market demand has also picked up strongly since late March as pandemic subsides

Strategies

E-commerce focus: increase the percentage of e-commerce related transactions to improve product mix and profit margin

Dynamic routing integration with Express: centralize dynamic route planning to further reduce transportation costs

Customer experience and service quality enhancement: continue to increase number of last mile service outlets and provide value-added services to customers

Pick-Up/DeliverySorting and Transporting

Service

Stations

Service

Stations

Hubs and

Sortation Centers

Line-Haul Transportation and

Feeder Services*

Hubs and

Sortation Centers

Pick-Up / Delivery

Operated by BEST Operated by Franchisee Partners *All transportation outsourced to 3rd party transportation service providers

16

647 585 542 658 595 597

132 142 165

134 158 163

779 727 707

792 753 760

2017 2018 2019 1Q18 1Q19 1Q20

Cost per Tonne Last-mile delivery service fee

(43)

29 41

(17)

26

(124)

(5.8%)

3.8% 5.5%

(2.2%)

3.4% (19.4%)

2017 2018 2019 1Q18 1Q19 1Q20

Gross Profit/(Loss) per Tonne Gross Profit/(Loss) Margin*

4,316

5,430

6,980

985 1,268 1,074

2017 2018 2019 1Q18 1Q19 1Q20

736 756 749 775 779

636

2017 2018 2019 1Q18 1Q19 1Q20

Freight

Freight Volume000’s tonnes

Revenue per Tonne 2

RMB

Cost of Revenue per TonneRMB

Gross Profit/(Loss) per TonneRMB

Notes:




2. Revenue per Tonne includes Last-mile delivery service fees

*Gross Profit Margin is calculated based on revenue per tonne including last-mile delivery service fee starting from 2017

1

17

423 382

350 405

365 309

2017 2018 2019 1Q18 1Q19 1Q20

63

45 44

6252

73

2017 2018 2019 1Q18 1Q19 1Q20

63 57 55

76 70

100

2017 2018 2019 1Q18 1Q19 1Q20

107 101

93

115 108 115

2017 2018 2019 1Q18 1Q19 1Q20

Transportation Cost per TonneRMB

Labor Cost per TonneRMB

Other Costs per TonneRMB

Lease Cost per TonneRMB

Freight – Cost trend

Notes:


18

Core Logistics and Supply Chain: Supply Chain Management

Integrated supply chain solutions including warehouse and inventory planning, online and offline fulfillment and transportation solutions, intra-city same-

day delivery, and SaaS platform for merchants

1Q20 Recap

Strong 2C fulfilment order growth

o Increased demand for online shopping resulted in 34.9% YoY increase of B2C number of orders fulfilled

o Emphasis on synergies across business units

Decrease in B2B transportation revenue

o B2B transportation business was impacted due to pandemic-related business closure of our customers

Continue to expand its nationwide network, increased total number of franchised OFC by 28.5% YoY to 302

Strategies

One-stop solution: accelerate integration with other business units to offer integrated supply chain solutions to more customers and drive 2C order growth

Growing franchised cloud OFC business with higher profit margins to improve profitability

Fashion & Apparel and FMCG segments focus: continue to expand market leading position in these two segments

New products and services offering: provide SaaS platform to merchants to digitize their supply chain; build out intra-city delivery network in major cities; develop fresh produce supply

chain to enable rural villages to sell fresh produce directly to consumers

Online

Merchants

Offline

OtherTransportation

ServiceProviders

Domestic and

International

Consumers

Membership Storesand Branded Stores

Customer StoresDistributors

B2C

B2B

O2O

19

BEST CloudOFCs

CustomerWarehouses

BondedWarehouses

BEST FranchiseOFCs

1,389 1,719 1,705

1,326 1,626 1,577

995 1,090

1,548

995

1,178 1,684

2,384

2,809 3,253

2,322

2,804 3,261

2017 2018 2019 1Q18 1Q19 1Q20

Self-Operated Cloud OFCs Franchised Cloud OFCs

99 115 108 103 111 96

228 237

293 227 235 302

327 352 401

330 346 398

2017 2018 2019 1Q18 1Q19 1Q20


98

104

138

20 21

3

6.1%

5.0%

6.3%5.0%

4.0%

0.8%

2017 2018 2019 1Q18 1Q19 1Q20

Gross Profit Gross Profit Margin

Supply Chain Management

Number of Orders Fulfilledmm

Gross Profit/(Loss)RMB mm

Total Warehouse GFA000’s sqm (End of Period)

Cloud OFCsEnd of Period

132 164 199

31 39 43

48

82

158

14 23 40

180

247

357

4562

84

2017 2018 2019 1Q18 1Q19 1Q20


Notes:


20

21

Transportation Service Provider

FleetDrivers

Truckload Demand

Key Accounts, SME,

Agents and Brokers

Service Quality

Evaluation

Parts Sales &

General Maintenance

Real-Time

Bidding

En-Route

Monitoring Truck

Pooling

Settlement

UCargo

Bulk Purchase

Insurance

Bulk Purchase

Gasoline & ETC

Other Value Added

Services

Other Value Added

Services

Real-Time Truckload Capacity Bidding Platform with Value-Added Services

1Q20 Recap

Platform expansion

o Number of registered drivers on the Ucargo Mobile app more than tripled YOY to 209,357

Pandemic related decrease in transaction

o Number of transactions decreased by 6.4% YoY due to severe disruptions in supply chain and travel restrictions across China

Strategies

Strategic focus on channel business: attract more SMEs and driver onto the platform

Service Innovation: Continue to roll out new solutions such as multimodal, LTL, clean energy vehicles, etc.

Deepen Value Added Services: Provide after-market services such as bulk purchases, insurance, maintenance and repairs to drive revenue growth and margin

1,440

3,173 4,024 4,228 4,340

5,126 6,079

8,591 9,040 9,465 9,765 10,623 11,159

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20

UCargo - Number of Transactions

UCargo - Registered Drivers on the UCargo PlatformEnd of Period

Core Logistics and Supply Chain: UCargo and Capital

Notes:


Capital - Trucks FinancedEnd of Period

23.4%1Q19 – 1Q20 YoY

22

58,358

100,954

156,255

189,129 209,357

1Q19 2Q19 3Q19 4Q19 1Q20

258.7%1Q19 – 1Q20 YoY

892

2,574

17

441 390

2018 2019 1Q18 1Q19 1Q20

UCargo – Revenue from External TransactionsRMB mm

318,727

87,067

35,850

41,667 8,392

147,551 532,040

3,033 78,303 103,863

466,278

619,107

38,883

119,970 112,255

2018 2019 1Q18 1Q19 1Q20

Internal Transactions External Transactions

Store+

Online

Merchants

Offline

Membership

and Branded

Stores

Last-Mile Services

Consumers

Merchandise and services flow

Data flow

1Q20 Recap

Demand remained robust, improving gross margin

o During the pandemic, more shops went online for procurement and fulfilment, tapping into the Store+ platform. Despite challenging operating conditions, gross margin continued

to increase due to ongoing efforts in improving quality of orders.

Decrease in total number of orders

o Number of orders decreased due to temporary closures of self-operated WoWo stores in light of the pandemic, but it is offset by an increase in orders from membership and

franchised stores

Strategies

Branded stores expansion: expand franchised BEST-Neighbor stores to critical scale to improve gross margin and reduce fulfilment costs per order

Membership store quality enhancement: improve margins and reduce fulfilment costs further by enhancing the quality of membership stores and their orders

Technology application: deploy data analytics to deepen cooperation with brands and stores to optimize merchandise procurement, improve operating efficiency, and roll out new

services

Last-mile services to consumers: expand membership program, online-to-offline and last-mile services to grow 2C business

Smart supply chain for convenience stores and last-mile services for consumers

23

282 351 346 278 349 33894

1,489

3,268

144

2,222

3,350

376

1,840

3,614

422

2,571

3,688

2017 2018 2019 1Q18 1Q19 1Q20

Self-Operated Stores Franchised Stores

363,755

423,636 414,136 375,469

426,729 420,626

2017 2018 2019 1Q18 1Q19 1Q20

242,237

533,474 799,372

102,232 117,381 82,474

2,161,301

2,557,795 2,120,196

485,122 438,222 447,662

2,403,538

3,091,269 2,919,568

587,354 555,603 530,136

2017 2018 2019 1Q18 1Q19 1Q20

Branded Stores Membership Stores Total

Store+

Number of Branded Stores Number of Membership Stores

Gross Profit/(Loss) per OrderRMB

Number of Orders Fulfilled

64 83

110 94

126

116

6.9%

9.0%

11.4% 10.1%

12.7%

13.3%

2017 2018 2019 1Q18 1Q19 1Q20

Gross Profit/(Loss) per order Gross Profit/(Loss) Margin

2.4pptsFY 2018 – FY 2019 YoY

Notes:


* Decrease in store orders was due to ongoing efforts to improve the quality of orders from membership stores

24


25

Countries and Regions with Physical Network

Cross Border E-Commerce Logistics

International Express, Fulfillment, and Cross Border E-Commerce Logistics

Global

1Q20 Recap

Strong momentum in Southeast Asia

oSolid growth in express parcel volume in Thailand and Vietnam

oReady to launch network in Malaysia, Cambodia and Singapore

Strategies

Capture enormous growth opportunities in Southeast Asia: continue to expand in

networks in Thailand and Vietnam, roll out networks in Malaysia, Cambodia and

Singapore in 2Q, plan to roll out in Indonesia and the Philippines in the future

Develop more cross-border solutions to cover more countries

Notes:


26

Global

Parcel Volume in South East Asia‘000 Parcels

237

783

2,607

5,157

8,840

1Q19 2Q19 3Q19 4Q19 1Q20

3,624.3%1Q19 – 1Q20 YoY

QoQ Growth

Looking Ahead

In Q2 all of our business lines have swiftly returned to normal operations

Demand for our integrated supply chain and logistics services are robust as consumer purchasing habits have shifted deeper on line

Confident in the long-term operating profitability of our core logistics and supply chain businesses

o Continuous high growth in ecommerce

o Laser sharp focus on increased operational efficiencies with plans to streamline both capex and operating expenses

Potential spin-off of certain business units to further improve balance sheet and profitability

Notes:


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2020 1q earnings presentation...2020 1q earnings presentation may 27th, 2020 1 disclaimer this...

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