EX-99.1 2 a21-9409_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

BEST Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2020 Financial Results

 

Strategic Refocusing Plan Delivered Positive Results

 

HANGZHOU, China, March 10, 2021 — BEST Inc. (NYSE: BEST) (“BEST” or the “Company”), a leading integrated smart supply chain solutions and logistics services provider in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2020.

 

Following the Company’s previously announced decision to wind down its Store+ business by the end of 2020, starting with this announcement for the fourth quarter ended December 31, 2020, Store+’s historical financial results for the periods prior to the wind-down will be reflected in the Company’s consolidated financial statements as discontinued operations.

 

Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, “In the fourth quarter of 2020, we executed our strategic refocusing plan and turned our business around amid strong industry competition, attesting to our ability to make quick and decisive changes in our strategies and operational practices. We continued to make improvements to all of our business segments and reduced losses, which put us back on the path to strong growth and profitability. Our Express segment under new management focused on strengthening network stability, optimizing product and cost structure, as well as enhancing service quality. In December 2020, despite a net loss for the quarter, net profit for Express turned positive for the first time since the second quarter of 2020. Our Freight segment continued to strengthen its industry leadership, demonstrating 25.1% year-over-year volume growth while returning to profitability. We also took initiatives to improve our Supply Chain Management performance as we focused on higher-margin customers. Our Global business continued its growth momentum by gaining more cross-border and Southeast Asia businesses, achieving over 400% parcel volume growth year-over-year.”

 

“While the Company suffered major setbacks due to the pandemic in 2020, we have taken decisive actions to steer the Company back to the path of growth and profitability. We firmly believe the worst is behind us and the future is bright. We entered 2021 with optimism and strong momentum, and anticipate strong growth for our business as the year progresses. We are determined to strengthen our market share, optimize cost structure, improve service quality and customer experience, and build out a leading integrated smart supply chain and logistics company to deliver sustainable and powerful future growth,” concluded Mr. Chou.

 

Gloria Fan, BEST’s Chief Financial Officer, commented, “We concluded a challenging 2020 with a fourth quarter focusing on strategic initiatives. We took decisive actions to realign our businesses to adapt to the evolving competitive market conditions as well as set a solid foundation for future growth. Our revenue, affected by the challenging pricing environment and reduced by the wind-down of Store+ during the quarter, was RMB9.3 billion. As part of our refocusing strategy, we identified and executed additional measures to manage our costs, expenses and liquidity. In the fourth quarter, we generated net operating cash flow of RMB347 million while maintaining a healthy combined balance of cash and cash equivalents, restricted cash and short-term investments of RMB4.5 billion. As we progress into 2021, we will remain focused on improving our capital structure as well as enhancing our balance sheet and cash flow to support the Company’s future growth. Based on current market conditions and current operations, we expect the Company’s revenue for the full fiscal year of 2021 to be between RMB34 billion and RMB36 billion. This forecast reflects management’s current and preliminary expectation, which is subject to change.”

 

1

 

FINANCIAL HIGHLIGHTS(1)

 

For the Fourth Quarter Ended December 31, 2020:

 

Results presented herein exclude Store+-related discontinued operations

 

·                  Revenue was RMB9,255.4 million (US$1,418.4 million), a decrease of 8.9% year-over-year (“YoY”). The decrease was primarily due to a decrease in average selling price (“ASP”) per parcel in Express business, partially offset by an increase in Express parcel volume.

 

·                  Gross Profit was RMB50.1 million (US$7.7 million), a decrease of 91.1% YoY compared to gross profit of RMB561.5 million in the same period of 2019. The decrease was primarily due to a steeper ASP decrease than unit cost reduction in Express business. Gross Margin was 0.5%, a decrease of 5.0 percentage points (“ppts”) YoY.

 

·                      Net Loss was RMB492.9 million (US$75.5 million), compared to a net income of RMB132.6 million in the same period of 2019. Non-GAAP Net Loss(2)(3) was RMB475.7 million (US$72.9 million), compared to non-GAAP net income of RMB146.8 million in the same period of 2019.

 

·                      Diluted EPS(4) was negative RMB1.26 (US$0.19), compared to RMB0.36 in the same period of 2019. Non-GAAP Diluted EPS(3)(4) was negative RMB1.22 (US$0.19), compared to RMB0.39 in the same period of 2019.

 

·                      EBITDA(5) was negative RMB305.2 million (US$46.8 million), compared to RMB245.9 million in the same period of 2019. Adjusted EBITDA(3)(5)  was negative RMB288.0 million (US$44.1 million), compared to RMB259.2 million in the same period of 2019.

 

(1) All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year-over-year comparisons are based on figures before rounding.

(2) Non-GAAP net income/loss represents net income/loss excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, and fair value change of equity investments (if any).

(3) See the sections entitled “Use of Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” for more information about the non-GAAP measures referred to within this results announcement.

(4) Diluted earnings per share, or Diluted EPS, is calculated by dividing net profit attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period.

(5) EBITDA represents net loss excluding depreciation, amortization, interest expense and income tax expense and minus interest income. Adjusted EBITDA represents EBITDA excluding share-based compensation expenses and fair value change of equity investments (if any).

 

2

 

For the Fiscal Year Ended December 31, 2020:

 

Results presented herein exclude Store+-related discontinued operations

 

·                  Revenue was RMB29,995.0 million (US$4,596.9 million), a decrease of 7.3% YoY. The decrease was primarily due to a decrease in ASP per parcel in Express business, partially offset by an increase in Express parcel volume.

 

·                      Gross Profit was RMB238.1 million (US$36.5 million), a decrease of 85.5% YoY compared to gross profit of RMB1,637.3 million in fiscal year 2019. The decrease was primarily due to a steeper ASP decrease than unit cost reduction in Express and Freight businesses. Gross Margin was 0.8%, a decrease of 4.3 percentage points YoY.

 

·                      Net Loss was RMB1,683.1 million (US$257.9 million), compared to a net income of RMB172.7 million in fiscal year 2019. Non-GAAP Net Loss was RMB1,569.3 million (US$240.5 million), compared to non-GAAP net income of RMB253.9 million in fiscal year 2019.

 

·                      Diluted EPS was negative RMB4.28 (US$0.66), compared to RMB0.49 in fiscal year 2019. Non-GAAP Diluted EPS was negative RMB3.98 (US$0.61), compared to RMB0.70 in fiscal year 2019.

 

·                      EBITDA was negative RMB1,046.1 million (US$160.3 million), compared to RMB652.9 million in fiscal year 2019. Adjusted EBITDA was negative RMB935.1 million (US$143.3 million), compared to RMB730.4 million in fiscal year 2019.

 

BUSINESS HIGHLIGHTS(6)

 

·                  The Company made significant changes in the fourth quarter of 2020 across its business segments. The initial positive results brought about by these changes affirms the Company’s strategic direction targeting a sustainable recovery.

 

·                  The Company continues to evaluate strategic options aimed at enhancing its balance sheet and profitability.

 

BEST Express — The strategic refocusing plan announced in November 2020 focused on optimizing product structure, improving network stability and flexibility, as well as enhancing service quality and customer experience. These initiatives have already resulted in an encouraging recovery, demonstrated by improving parcel unit economics. Despite a net loss for the quarter, it achieved net profit for the month of December. During the quarter, parcel volume increased by 6.0% YoY, representing a market share of 9.5% during the quarter. Gross margin contracted by 7.2 ppts due to a decline in ASP per parcel of 20.4% YoY, partially offset by a decrease in average cost per parcel of 14.3% YoY. In fiscal year 2020, total parcel volume increased by 12.7% YoY to 8.54 billion, representing a market share of 10.2%.

 

(6) All numbers presented have been rounded to the nearest integer, tenth, or hundredth, and year-over-year comparisons are based on figures before rounding.

 

3

 

BEST Freight — Freight continued strong post-pandemic recovery and delivered a strong quarter with a higher-than-industry-average growth rate while returning to profitability. The Company continued to emphasize the e-commerce aspect of its freight services, solidify its leadership position and brand recognition, and improve operating efficiency. Freight volume increased by 25.1% YoY in the fourth quarter of 2020. Gross margin was 5.5%, having recovered to pre-COVID level, and improved by 4.5 ppts quarter-over-quarter (“QoQ”), as pricing in the fourth quarter continued to rebound. Average cost per tonne and ASP both decreased by 16.7% YoY. In fiscal year 2020, total Freight volume increased by 20.2% YoY to 8.4 million tonnes.

 

BEST Supply Chain Management — The total number of orders fulfilled by Cloud OFCs increased by 11.7% YoY to 136.1 million in the fourth quarter of 2020 and the total number of orders fulfilled by franchised Cloud OFCs increased by 15.1% YoY to 67.1 million. The number of franchised OFCs increased by 22.2% YoY to 358 in the fourth quarter of 2020. In fiscal year 2020, the total number of orders fulfilled by Cloud OFCs increased by 21.4% YoY to 433.2 million and the total number of orders fulfilled by franchised Cloud OFCs increased by 35.9% YoY to 214.7 million. In the fourth quarter of 2020, gross margin for Supply Chain Management decreased by 6.3 ppts YoY, primarily due to one-off costs incurred by closing down Store+-  related operations, and pricing pressure associated with certain legacy key account customers, which are in the process of being discontinued.

 

BEST Global — In the fourth quarter of 2020, Global continued to expand cross-border and Southeast Asia business and margin improvement. In the fourth quarter, parcel volume in Thailand increased by 25.0% QoQ to 12.3 million, while parcel volume in Vietnam increased by 35.9% QoQ to 14 million. Global’s gross margin expanded by 7.4 ppts YoY. In fiscal year 2020, total parcel volume in Thailand increased by 612.8% YoY to 37.3 million, and total parcel volume in Vietnam increased by 852.0% YoY to 33.8 million.

 

BEST UCargo — As of December 31, 2020, the number of registered drivers on the UCargo mobile app increased by 70.6% YoY to over 320,000. In the fourth quarter, the total number of transactions on the trucking brokerage platform increased by 19.0% YoY to 255,139. In fiscal year 2020, the total number of transactions on the trucking brokerage platform increased by 19.2% YoY to 738,131.

 

BEST Capital — As of December 31, 2020, BEST Capital had provided financing solutions to 13,410 trucks in total.

 

BEST Store+ — The Company has completed the wind-down of its Store+ business in accordance with the announcement on November 15, 2020.

 

4

 

Key Operational Metrics

 

 

 

Three Months Ended

 

% Change YoY

 

 

 

December 31, 
2018

 

December 31, 
2019

 

December 31, 
2020

 

2019 vs
2018

 

2020 vs 
2019

 

Express Parcel Volume (in ‘000)

 

1,868,489

 

2,437,959

 

2,585,249

 

30.5

%

6.0

%

Freight Volume (Tonne in ‘000)

 

1,605

 

2,097

 

2,623

 

30.6

%

25.1

%

Supply Chain Management Orders Fulfilled (in ‘000)

 

83,623

 

121,907

 

136,126

 

45.8

%

11.7

%

UCargo Number of Transactions (in ‘000)

 

196

 

214

 

255

 

9.6

%

19.0

%

Global Parcel Volume in Southeast Asia (in ‘000)

 

14

 

5,157

 

27,891

 

37,112

%

441

%

 

 

 

 

Fiscal Year Ended

 

% Change YoY

 

 

 

December 31, 
2018

 

December 31, 
2019

 

December 31, 
2020

 

2019 vs 
2018

 

2020 vs 
2019

 

Express Parcel Volume (in ‘000)

 

5,470,092

 

7,576,204

 

8,535,133

 

38.5

%

12.7

%

Freight Volume (Tonne in ‘000)

 

5,430

 

6,980

 

8,392

 

28.5

%

20.2

%

Supply Chain Management Orders Fulfilled (in ‘000)

 

246,717

 

356,905

 

433,224

 

44.7

%

21.4

%

UCargo Number of Transactions (in ‘000)

 

466

 

619

 

738

 

32.8

%

19.2

%

Global Parcel Volume in Southeast Asia (in ‘000)

 

14

 

8,785

 

73,586

 

63,293

%

738

%

 

FINANCIAL RESULTS

 

For the Fourth Quarter Ended December 31, 2020:

 

Results presented herein exclude Store+-related discontinued operations

 

Revenue

 

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

 

Table 1 — Breakdown of Revenue by Business Segment

 

 

 

Three Months Ended

 

 

 

 

 

December 31, 2019

 

December 31, 2020

 

 

 

(In ‘000, except for %)

 

RMB

 

% of
Revenue

 

RMB

 

US$

 

% of
Revenue

 

% Change
YoY

 

Express

 

6,896,868

 

68.0

%

5,822,926

 

892,402

 

63.0

%

(15.6

)%

Freight

 

1,555,229

 

15.3

%

1,620,388

 

248,335

 

17.5

%

4.2

%

Supply Chain Management

 

608,583

 

6.0

%

542,332

 

83,116

 

5.9

%

(10.9

)%

Global

 

135,423

 

1.3

%

253,351

 

38,828

 

2.7

%

87.1

%

UCargo

 

908,887

 

8.9

%

957,865

 

146,799

 

10.3

%

5.4

%

Capital

 

51,741

 

0.5

%

58,497

 

8,965

 

0.6

%

13.1

%

Total Revenue

 

10,156,731

 

100.0

%

9,255,359

 

1,418,445

 

100.0

%

(8.9

)%

 

5

 

·                  Express Service Revenue decreased by 15.6% YoY to RMB5,822.9 million (US$892.4 million) from RMB6,896.9 million, primarily due to a 20.4% YoY decrease in ASP per parcel, partially offset by a 6.0% YoY increase in parcel volume. The decrease in ASP per parcel is primarily attributable to competitive market dynamics.

 

·                  Freight Service Revenue increased by 4.2% YoY to RMB1,620.4 million (US$248.3 million) from RMB1,555.2 million, primarily due to a 25.1% YoY increase in freight volume, partially offset by a 16.7% YoY decrease in ASP per tonne.

 

·                  Supply Chain Management Service Revenue decreased by 10.9% YoY to RMB542.3 million (US$83.1 million) from RMB608.6 million, primarily due to pricing pressure associated with certain legacy key account customers, partially offset by a 11.7% YoY increase in the total number of orders fulfilled by Cloud OFCs.

 

·                  Global Service Revenue increased by 87.1% YoY to RMB253.4 million (US$38.8 million) from RMB135.4 million, primarily due to strong growth in parcel volumes in Southeast Asia.

 

·                  UCargo Service Revenue increased by 5.4% YoY to RMB957.9 million (US$146.8 million) from RMB908.9 million, primarily due to an increased number of total transactions.

 

·                  Capital Service Revenue increased by 13.1% YoY to RMB58.5 million (US$9.0 million) from RMB51.7 million.

 

Cost of Revenue

 

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

 

Table 2 — Breakdown of Cost of Revenue by Business Segment

 

 

 

Three Months Ended

 

% of

 

 

 

December 31, 2019

 

December 31, 2020

 

Revenue

 

(In ‘000, except for %)

 

RMB

 

% of
Revenue

 

RMB

 

US$

 

% of 
Revenue

 

Change
YoY

 

Express

 

(6,489,669

)

94.1

%

(5,900,035

)

(904,220

)

101.3

%

7.2

ppt

Freight

 

(1,468,828

)

94.4

%

(1,530,702

)

(234,590

)

94.5

%

0.1

ppt

Supply Chain Management

 

(577,977

)

95.0

%

(549,212

)

(84,170

)

101.3

%

6.3

ppt

Global

 

(156,028

)

115.2

%

(273,222

)

(41,873

)

107.8

%

(7.4

)ppt

UCargo

 

(896,662

)

98.7

%

(945,577

)

(144,916

)

98.7

%

0.0

ppt

Capital

 

(6,045

)

11.7

%

(6,557

)

(1,005

)

11.2

%

(0.5

)ppt

Total Cost of Revenue

 

(9,595,209

)

94.5

%

(9,205,305

)

(1,410,774

)

99.5

%

5.0

ppt

 

6

 

Cost of Revenue was RMB9,205.3 million (US$1,410.8 million) or 99.5% of revenue in the fourth quarter of 2020, compared to RMB9,595.2 million or 94.5% of revenue in the same quarter of 2019. The increase of 5.0 ppts in cost of revenue as a percentage of revenue was primarily attributable to a steeper decrease in ASP than unit cost reduction.

 

Table 3 — Breakdown of Average Cost Per Parcel and Average Cost Per Tonne

 

 

 

Three Months Ended

 

% Change

 

(in RMB)

 

December 31, 2019

 

December 31, 2020

 

YoY

 

Express:

 

 

 

 

 

 

 

Average Cost Per Parcel

 

2.66

 

2.28

 

(14.3

)%

Average Transportation Cost Per Parcel

 

0.75

 

0.66

 

(12.0

)%

Average Labor Cost Per Parcel

 

0.22

 

0.21

 

(4.5

)%

Average Lease Cost Per Parcel

 

0.09

 

0.09

 

0.0

%

Average Other Cost Per Parcel

 

0.12

 

0.09

 

(25.0

)%

Average Last-mile Cost Per Parcel

 

1.48

 

1.23

 

(16.9

)%

Freight:

 

 

 

 

 

 

 

Average Cost Per Tonne

 

700.6

 

583.5

 

(16.7

)%

 

·                  Express Service Average Cost per Parcel decreased by 14.3%, primarily due to improved operating efficiency and economies of scale.

 

·                  Freight Service Average Cost per Tonne decreased by 16.7% YoY, primarily due to improved operating efficiency, network optimization and economies of scale.

 

Gross Profit was RMB50.1 million (US$7.7 million) in the fourth quarter of 2020, compared to gross profit of RMB561.5 million in the same quarter of 2019; Gross Margin was 0.5%, compared to 5.5% in the same quarter of 2019.

 

Operating Expenses

 

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

 

Table 4 — Breakdown of Operating Expenses and Adjusted Operating Expenses by Category

 

 

 

Three Months Ended

 

 

 

 

 

December 31, 2019

 

December 31, 2020

 

% of Revenue

 

(In ‘000, except for %)

 

RMB

 

% of 
Revenue

 

RMB

 

US$

 

% of 
Revenue

 

Change
YoY

 

Selling, General and Administrative Expenses

 

(400,643

)

3.9

%

(498,716

)

(76,432

)

5.4

%

1.5

ppt

Adjusted for SBC Expenses

 

(26,366

)

0.2

%

(23,864

)

(3,657

)

0.3

%

0.1

ppt

Adjusted Selling, General and Administrative Expenses

 

(374,277

)

3.7

%

(474,852

)

(72,775

)

5.1

%

1.4

ppt

Research and Development Expenses

 

(52,076

)

0.5

%

(53,788

)

(8,243

)

0.6

%

0.1

ppt

Adjusted for SBC Expenses

 

(354

)

0.0

%

(1,785

)

(274

)

0.0

%

0.0

ppt

Adjusted Research and Development Expenses

 

(51,722

)

0.5

%

(52,003

)

(7,969

)

0.6

%

0.1

ppt

Total Operating Expenses

 

(452,719

)

4.4

%

(552,504

)

(84,675

)

6.0

%

1.6

ppt

Adjusted for SBC Expenses

 

(26,720

)

0.2

%

(25,649

)

(3,931

)

0.3

%

0.1

ppt

Adjusted Total Operating Expenses

 

(425,999

)

4.2

%

(526,855

)

(80,744

)

5.7

%

1.5

ppt

 

7

 

Selling, General and Administrative Expenses were RMB498.7 million (US$76.4 million) or 5.4% of revenue in the fourth quarter of 2020, compared to RMB400.6 million or 3.9% of revenue in the same quarter of 2019. The increase in selling, general and administrative expenses was primarily attributable to additional accrued provision for certain trade receivables due to the pandemic and losses on disposal of fixed assets due to an upgrade of Express equipment.

 

Research and Development Expenses were RMB53.8 million (US$8.2 million) or 0.6% of revenue in the fourth quarter of 2020, compared to RMB52.1 million, or 0.5% of revenue in the same quarter of 2019.

 

Share-based Compensation (“SBC”) Expenses included in the cost and expense items above in the fourth quarter of 2020 were RMB26.1 million (US$4.0 million), compared to RMB27.4 million in the same quarter of 2019. In the fourth quarter of 2020, RMB0.5 million (US$0.1 million) was allocated to cost of revenue, RMB0.5 million (US$0.1 million) was allocated to selling expenses, RMB23.3 million (US$3.6 million) was allocated to general and administrative expenses, and RMB1.8 million (US$0.3 million) was allocated to research and development expenses.

 

Net Loss and Non-GAAP Net Loss

 

Net Loss in the fourth quarter of 2020 was RMB492.9 million (US$75.5 million), compared to net income of RMB132.6 million in the same period of 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Net Loss in the fourth quarter of 2020 was RMB475.7 million (US$72.9 million), compared to non-GAAP net income of RMB146.8 million in the same quarter of 2019.

 

The following table sets forth a breakdown of non-GAAP net loss for the three months ended December 31, 2020 by segment.

 

Table 5 — Breakdown of non-GAAP Net Loss by Segment

 

 

 

Three Months Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(7)

 

Total

 

Non-GAAP Net Income/(Loss)

 

(262,178

)

13,841

 

(77,198

)

(58,433

)

(36,913

)

12,920

 

(67,717

)

(475,678

)

 

(7) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

8

 

Diluted EPS and Non-GAAP Diluted EPS

 

Diluted EPS in the fourth quarter of 2020 was negative RMB1.26 (US$0.19), based on a weighted average of 385.6 million diluted shares outstanding during the quarter. This is compared to RMB0.36 on a weighted average of 392.8 million diluted shares outstanding in the same period of 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Diluted EPS in the fourth quarter of 2020 was negative RMB1.22 (US$0.19), compared to RMB0.39 in the same period of 2019. A reconciliation of non-GAAP diluted EPS to diluted EPS is included at the end of this results announcement.

 

Adjusted EBITDA and Adjusted EBITDA Margin

 

Adjusted EBITDA in the fourth quarter of 2020 was negative RMB288.0 million (US$44.1 million), compared to RMB259.2 million in same quarter in 2019. Adjusted EBITDA Margin was negative 3.1% in the fourth quarter of 2020, compared to 2.6% in the same quarter in 2019.

 

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

 

The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the three months ended December 31, 2020 by segment.

 

Table 6 — Breakdown of Adjusted EBITDA and Adjusted EBITDA Margin by Segment

 

 

 

Three Months Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(8)

 

Total

 

Adjusted EBITDA

 

(158,255

)

31,962

 

(67,323

)

(54,680

)

(34,508

)

18,528

 

(23,694

)

(287,970

)

Adjusted EBITDA Margin

 

(2.7

)%

2.0

%

(12.4

)%

(21.6

)%

(3.6

)%

31.7

%

—

 

(3.1

)%

 

Cash and Cash Equivalents, Restricted Cash and Short-term Investments

 

As of December 31, 2020, cash and cash equivalents, restricted cash and short-term investments were RMB4,464.2 million (US$684.2 million), compared to RMB5,005.5 million as of December 31, 2019.

 

Net Cash Generated From Operating Activities

 

Net cash generated from operating activities was RMB346.9 million (US$53.2 million), compared to RMB606.2 million in the same period of 2019. The decrease in net cash generated from operating activities was mainly due to decreasing ASP per parcel for the Express business segment.

 

(8) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

9

 

Capital Expenditures (“CAPEX”)

 

CAPEX was RMB331.1 million (US$50.7 million), or 3.6% of total revenue in the fourth quarter ended December 31, 2020, compared to CAPEX of RMB387.6 million, or 3.8% of total revenue, in the same period of 2019.

 

For the Fiscal Year Ended December 31, 2020:

 

Results presented herein exclude Store+-related discontinued operations

 

Revenue

 

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

 

Table 7 — Breakdown of Revenue by Business Segment

 

 

 

Fiscal Year Ended

 

 

 

 

 

December 31, 2019

 

December 31, 2020

 

 

 

(In ‘000, except for %)

 

RMB

 

% of 
Revenue

 

RMB

 

US$

 

% of 
Revenue

 

% Change 
YoY

 

Express

 

21,822,442

 

67.5

%

19,417,559

 

2,975,871

 

64.7

%

(11.0

)%

Freight

 

5,224,355

 

16.1

%

5,156,551

 

790,276

 

17.2

%

(1.3

)%

Supply Chain Management

 

2,195,759

 

6.8

%

1,912,323

 

293,076

 

6.4

%

(12.9

)%

Global

 

336,874

 

1.0

%

777,656

 

119,181

 

2.6

%

130.8

%

UCargo

 

2,574,054

 

8.0

%

2,519,919

 

386,194

 

8.4

%

(2.1

)%

Capital

 

205,203

 

0.6

%

211,021

 

32,340

 

0.7

%

2.8

%

Total Revenue

 

32,358,687

 

100.0

%

29,995,029

 

4,596,938

 

100.0

%

(7.3

)%

 

·                  Express Service Revenue decreased by 11.0% YoY to RMB19,417.6 million (US$2,975.9 million) from RMB21,822.4 million, primarily due to a 21.0% YoY decrease in ASP per parcel, partially offset by a 12.7% YoY increase in parcel volume. The decrease in ASP per parcel is primarily attributable to competitive market dynamics.

 

·                  Freight Service Revenue decreased by 1.3% YoY to RMB5,156.6 million (US$790.3 million) from RMB5,224.4 million, primarily due to a 17.9% YoY decrease in ASP per tonne, partially offset by a 20.2% YoY increase in freight volume.

 

·                  Supply Chain Management Service Revenue decreased by 12.9% YoY to RMB1,912.3 million (US$293.1 million) from RMB2,195.8 million, primarily due to pricing pressure associated with certain legacy key account customers, partially offset by a 21.4% YoY increase in the total number of orders fulfilled by Cloud OFCs.

 

·                  Global Service Revenue increased by 130.8% YoY to RMB777.7 million (US$119.2 million) from RMB336.9 million, primarily due to strong growth in parcel volumes in Southeast Asia.

 

10

 

·                  UCargo Service Revenue decreased by 2.1% YoY to RMB2,519.9 million (US$386.2 million) from RMB2,574.1 million.

 

·                  Capital Service Revenue increased by 2.8% YoY to RMB211.0 million (US$32.3 million) from RMB205.2 million.

 

Cost of Revenue

 

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

 

Table 8 — Breakdown of Cost of Revenue by Business Segment

 

 

 

Fiscal Year Ended

 

% of 

 

 

 

December 31, 2019

 

December 31, 2020

 

Revenue 

 

(In ‘000, except for %)

 

RMB

 

% of 
Revenue

 

RMB

 

US$

 

% of 
Revenue

 

Change
YoY

 

Express

 

(20,793,370

)

95.3

%

(19,470,937

)

(2,984,052

)

100.3

%

5.0

ppt

Freight

 

(4,934,937

)

94.5

%

(5,063,236

)

(775,975

)

98.2

%

3.7

ppt

Supply Chain Management

 

(2,052,006

)

93.5

%

(1,846,901

)

(283,050

)

96.6

%

3.1

ppt

Global

 

(371,404

)

110.3

%

(875,733

)

(134,212

)

112.6

%

2.3

ppt

UCargo

 

(2,517,642

)

97.8

%

(2,473,857

)

(379,135

)

98.2

%

0.4

ppt

Capital

 

(52,001

)

25.3

%

(26,225

)

(4,019

)

12.4

%

(12.9

)ppt

Total Cost of Revenue

 

(30,721,360

)

94.9

%

(29,756,889

)

(4,560,443

)

99.2

%

4.3

ppt

 

Cost of Revenue was RMB29,756.9 million (US$4,560.4 million) or 99.2% of revenue in fiscal year 2020, compared to RMB30,721.4 million or 94.9% of revenue in fiscal year 2019. The increase of 4.3 ppts in cost of revenue as a percentage of revenue was primarily attributable to intensified Express market competition and a pricing lag after the PRC government reinstated highway tolls. As a result, the decrease in ASP outpaced reduction in unit cost in Express and Freight businesses.

 

Table 9 — Breakdown of Average Cost Per Parcel and Average Cost Per Tonne

 

 

 

Fiscal Year Ended

 

% Change

 

(in RMB)

 

December 31, 2019

 

December 31, 2020

 

YoY

 

Express:

 

 

 

 

 

 

 

Average Cost Per Parcel

 

2.74

 

2.28

 

(16.9

)%

Average Transportation Cost Per Parcel

 

0.75

 

0.64

 

(14.7

)%

Average Labor Cost Per Parcel

 

0.24

 

0.21

 

(12.5

)%

Average Lease Cost Per Parcel

 

0.10

 

0.10

 

0.0

%

Average Other Cost Per Parcel

 

0.13

 

0.10

 

(23.1

)%

Average Last-mile Cost Per Parcel

 

1.52

 

1.23

 

(19.1

)%

Freight:

 

 

 

 

 

 

 

Average Cost Per Tonne

 

707.0

 

603.4

 

(14.7

)%

 

·                  Express Service Average Cost per Parcel decreased by 16.9%, primarily due to improved operating efficiency and economies of scale.

 

11

 

·                  Freight Service Average Cost per Tonne decreased by 14.7% YoY, primarily due to improved operating efficiency, network optimization and economies of scale.

 

Gross Profit was RMB238.1 million (US$36.5 million) in fiscal year 2020, compared to gross profit of RMB1,637.3 million in fiscal year 2019; Gross Margin was 0.8%, compared to 5.1% in fiscal year 2019.

 

Operating Expenses

 

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

 

Table 10 — Breakdown of Operating Expenses and Adjusted Operating Expenses by Category

 

 

 

Fiscal Year Ended

 

 

 

 

 

December 31, 2019

 

December 31, 2020

 

% of Revenue

 

(In ‘000, except for %)

 

RMB

 

% of
Revenue

 

RMB

 

US$

 

% of
Revenue

 

Change
YoY

 

Selling, General and Administrative Expenses

 

(1,365,657

)

4.2

%

(1,740,134

)

(266,688

)

5.8

%

1.6

ppt

Adjusted for SBC Expenses

 

(82,714

)

0.2

%

(119,488

)

(18,312

)

0.4

%

0.2

ppt

Adjusted Selling, General and Administrative Expenses

 

(1,282,943

)

4.0

%

(1,620,646

)

(248,376

)

5.4

%

1.4

ppt

Research and Development Expenses

 

(204,234

)

0.6

%

(191,417

)

(29,336

)

0.6

%

0.0

ppt

Adjusted for SBC Expenses

 

(7,209

)

0.0

%

(7,763

)

(1,190

)

0.0

%

0.0

ppt

Adjusted Research and Development Expenses

 

(197,025

)

0.6

%

(183,654

)

(28,146

)

0.6

%

0.0

ppt

Total Operating Expenses

 

(1,569,891

)

4.8

%

(1,931,551

)

(296,024

)

6.4

%

1.6

ppt

Adjusted for SBC Expenses

 

(89,923

)

0.2

%

(127,251

)

(19,502

)

0.4

%

0.2

ppt

Adjusted Total Operating Expenses

 

(1,479,968

)

4.6

%

(1,804,300

)

(276,522

)

6.0

%

1.4

ppt

 

Selling, General and Administrative Expenses were RMB1,740.1 million (US$266.7 million) or 5.8% of revenue in fiscal year 2020, compared to RMB1,365.7 million or 4.2% of revenue in fiscal year 2019. The increase in selling, general and administrative expenses was primarily attributable to increase in staff costs of Southeast Asia business, additional accrued provision for certain trade receivables due to the pandemic and losses on disposal of fixed assets due to an upgrade of Express’s equipment.

 

Research and Development Expenses were RMB191.4 million (US$29.3 million) or 0.6% of revenue in fiscal year 2020, compared to RMB204.2 million, or 0.6% of revenue in fiscal year 2019. The decrease in research and development expenses was primarily attributable to capitalization of certain research and development expenditures to intangible assets.

 

12

 

Share-based Compensation (“SBC”) Expenses included in the cost and expense items above in fiscal year 2020 were RMB129.7 million (US$19.9 million), compared to RMB91.7 million in fiscal year 2019. In fiscal year 2020, RMB2.4 million (US$0.4 million) was allocated to cost of revenue, RMB7.7 million (US$1.2 million) was allocated to selling expenses, RMB111.8 million (US$17.1 million) was allocated to general and administrative expenses, and RMB7.8 million (US$1.2 million) was allocated to research and development expenses.

 

Net Loss and Non-GAAP Net Loss

 

Net Loss in fiscal year 2020 was RMB1,683.1 million (US$257.9 million), compared to net income of RMB172.7 million in fiscal year 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Net Loss in fiscal year 2020 was RMB1,569.3 million (US$240.5 million), compared to non-GAAP net income of RMB253.9 million in fiscal year 2019.

 

The following table sets forth a breakdown of non-GAAP net loss for fiscal year 2020 by segment.

 

Table 11 — Breakdown of non-GAAP Net Loss by Segment

 

 

 

Fiscal Year Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(9)

 

Total

 

Non-GAAP Net Income/(Loss)

 

(741,117

)

(188,703

)

(164,066

)

(239,926

)

(113,638

)

94,492

 

(216,365

)

(1,569,323

)

 

Diluted EPS and Non-GAAP Diluted EPS

 

Diluted EPS in fiscal year 2020 was negative RMB4.28 (US$0.66), based on a weighted average of 387.5 million diluted shares outstanding during fiscal year 2020. This is compared to RMB0.49 on a weighted average of 388.5 million diluted shares outstanding in fiscal year 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Diluted EPS in fiscal year 2020 was negative RMB3.98 (US$0.61), compared to RMB0.70 in fiscal year 2019. A reconciliation of non-GAAP Diluted EPS to Diluted EPS is included at the end of this results announcement.

 

Adjusted EBITDA and Adjusted EBITDA Margin

 

Adjusted EBITDA was negative RMB935.1 million (US$143.3 million) in fiscal year 2020, compared to RMB730.4 million in fiscal year 2019. Adjusted EBITDA Margin was negative 3.1% in fiscal year 2020, compared to 2.3% in fiscal year 2019.

 

(9) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

13

 

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

 

The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the in fiscal year 2020 by segment.

 

Table 12 — Breakdown of Adjusted EBITDA and Adjusted EBITDA Margin by Segment

 

 

 

Fiscal Year Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(10)

 

Total

 

Adjusted EBITDA

 

(379,039

)

(124,060

)

(122,123

)

(227,583

)

(109,621

)

114,700

 

(87,373

)

(935,099

)

Adjusted EBITDA Margin

 

(2.0

)%

(2.4

)%

(6.4

)%

(29.3

)%

(4.4

)%

54.4

%

—

 

(3.1

)%

 

Net Cash Generated From Operating Activities

 

Net cash generated from operating activities in fiscal year 2020 was RMB11.2 million (US$1.7 million), compared to RMB1,131.2 million of net cash generated from operating activities in fiscal year 2019. The decrease in net cash generated from operating activities was mainly due to decreased ASP for the Express and Freight segments.

 

Capital Expenditures (“CAPEX”)

 

CAPEX was RMB1,587.7 million (US$243.3 million), or 5.3% of total revenue in fiscal year 2020, compared to CAPEX of RMB1,497.7 million, or 4.6% of total revenue in fiscal year 2019.

 

SHARES OUTSTANDING

 

As of the date of this press release, the Company had approximately 387.7 million ordinary shares outstanding(11). Each American Depositary Share represents one Class A ordinary share.

 

FINANCIAL GUIDANCE

 

Based on current market conditions and current operations, the Company expects its revenue for the full fiscal year of 2021 to be between RMB34 billion and RMB36 billion. This forecast reflects management’s current and preliminary expectation, which is subject to change.

 

MANAGEMENT CHANGE

 

Mr. Bo Liu, senior vice president and general manager of BEST Store+ of the Company, has left the Company in late February 2021.

 

(10) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

(11) The total number of shares outstanding excludes shares reserved for future issuances upon exercise or vesting of awards granted under the Company’s share incentive plans.

 

14

 

WEBCAST AND CONFERENCE CALL INFORMATION

 

The Company will hold a conference call at 9:00 pm U.S. Eastern Time on March 10, 2021 (10:00 am Beijing Time on March 11, 2021), to discuss its financial results and operating performance for the fourth quarter and fiscal year 2020.

 

Participants may access the call by dialing the following numbers:

 

United States

: +1-888-317-6003

Hong Kong

: 800-963976 or +852-5808-1995

Mainland China

: 4001-206115

International

: +1-412-317-6061

Participant Elite Entry Number

: 9453989

 

 

A replay of the conference call will be accessible through March 17, 2021 by dialing the following numbers:

 

 

United States

: +1-877-344-7529

International

: +1-412-317-0088

Replay Access Code

: 10152635

 

Please visit the Company’s investor relations website to view the earnings release prior to the conference call. A live and archived webcast of the conference call and a corporate presentation will be available at the same site.

 

ABOUT BEST INC.

 

BEST Inc. (NYSE: BEST) is a leading integrated smart supply chain solutions and logistics services provider in China. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-add services, including express and freight delivery, supply chain management and last-mile services, truckload service brokerage, international logistics and financial services. BEST’s mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain. For more information, please visit: http://www.best-inc.com/en/.

 

For investor and media inquiries, please contact:

 

BEST Inc.

Investor relations team

ir@best-inc.com

 

The Piacente Group, Inc.

Yang Song

Tel: +86-10-6508-0677

E-mail: best@tpg-ir.com

 

15

 

The Piacente Group, Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: best@tpg-ir.com

 

SAFE HARBOR STATEMENT

 

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as BEST’s strategic and operational plans, contain forward-looking statements. BEST may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about BEST’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: BEST’s goals and strategies; BEST’s future business development, results of operations and financial condition; BEST ‘s ability to maintain and enhance its ecosystem; BEST ‘s ability to continue to innovate, meet evolving market trends, adapt to changing customer demands and maintain its culture of innovation; fluctuations in general economic and business conditions in China and other countries in which BEST operates, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in BEST’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and BEST does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

USE OF NON-GAAP FINANCIAL MEASURES

 

In evaluating its business, BEST considers and uses non-GAAP measures, such as non-GAAP net loss/income, non-GAAP net loss/profit margin, adjusted EBITDA, adjusted EBITDA margin, EBITDA, adjusted selling expenses, adjusted general and administrative expenses, adjusted research and development expenses, and non-GAAP Diluted EPS, as supplemental measures in the evaluation of the Company’s operating results and in the Company’s financial and operational decision-making. The Company believes these non-GAAP financial measures that help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in loss from operations and net loss. The Company believes that these non-GAAP financial measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making. The presentation of these 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 U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” in the results announcement.

 

16

 

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors’ overall understanding of the Company’s current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company’s calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

 

17

 

Summary of Unaudited Condensed Consolidated Income Statements

(In Thousands)

 

 

 

Three Months Ended December 31,

 

Fiscal Year Ended December 31,

 

 

 

2019

 

2020

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Express

 

6,896,868

 

5,822,926

 

892,402

 

21,822,442

 

19,417,559

 

2,975,871

 

Freight

 

1,555,229

 

1,620,388

 

248,335

 

5,224,355

 

5,156,551

 

790,276

 

Supply Chain Management

 

608,583

 

542,332

 

83,116

 

2,195,759

 

1,912,323

 

293,076

 

Global

 

135,423

 

253,351

 

38,828

 

336,874

 

777,656

 

119,181

 

UCargo

 

908,887

 

957,865

 

146,799

 

2,574,054

 

2,519,919

 

386,194

 

Capital

 

51,741

 

58,497

 

8,965

 

205,203

 

211,021

 

32,340

 

Total Revenue

 

10,156,731

 

9,255,359

 

1,418,445

 

32,358,687

 

29,995,029

 

4,596,938

 

Cost of Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

Express

 

(6,489,669

)

(5,900,035

)

(904,220

)

(20,793,370

)

(19,470,937

)

(2,984,052

)

Freight

 

(1,468,828

)

(1,530,702

)

(234,590

)

(4,934,937

)

(5,063,236

)

(775,975

)

Supply Chain Management

 

(577,977

)

(549,212

)

(84,170

)

(2,052,006

)

(1,846,901

)

(283,050

)

Global

 

(156,028

)

(273,222

)

(41,873

)

(371,404

)

(875,733

)

(134,212

)

UCargo

 

(896,662

)

(945,577

)

(144,916

)

(2,517,642

)

(2,473,857

)

(379,135

)

Capital

 

(6,045

)

(6,557

)

(1,005

)

(52,001

)

(26,225

)

(4,019

)

Total Cost of Revenue

 

(9,595,209

)

(9,205,305

)

(1,410,774

)

(30,721,360

)

(29,756,889

)

(4,560,443

)

Gross Profit

 

561,522

 

50,054

 

7,671

 

1,637,327

 

238,140

 

36,495

 

Selling Expenses

 

(200,554

)

(124,967

)

(19,152

)

(432,939

)

(477,902

)

(73,242

)

General and Administrative Expenses

 

(200,089

)

(373,749

)

(57,280

)

(932,718

)

(1,262,232

)

(193,446

)

Research and Development Expenses

 

(52,076

)

(53,788

)

(8,243

)

(204,234

)

(191,417

)

(29,336

)

Total Operating Expenses

 

(452,719

)

(552,504

)

(84,675

)

(1,569,891

)

(1,931,551

)

(296,024

)

Loss from Operations

 

108,803

 

(502,450

)

(77,004

)

67,436

 

(1,693,411

)

(259,529

)

Interest Income

 

24,149

 

16,621

 

2,547

 

95,440

 

74,727

 

11,452

 

Interest Expense

 

(26,719

)

(53,473

)

(8,195

)

(79,486

)

(174,607

)

(26,760

)

Foreign Exchange Loss

 

(2,607

)

(908

)

(139

)

(4,375

)

(8,243

)

(1,263

)

Other Income

 

55,371

 

55,916

 

8,570

 

145,853

 

165,346

 

25,340

 

Other Expense

 

(19,342

)

(2,307

)

(354

)

(31,784

)

(24,576

)

(3,766

)

Income/(Loss) before Income Tax and Share of Net Loss of Equity Investees

 

139,655

 

(486,601

)

(74,575

)

193,084

 

(1,660,764

)

(254,526

)

Income Tax Expense

 

(6,883

)

(6,268

)

(961

)

(20,027

)

(22,124

)

(3,391

)

Income/(Loss) before Share of Net loss of Equity Investees

 

132,772

 

(492,869

)

(75,536

)

173,057

 

(1,682,888

)

(257,917

)

Share of Net Loss of Equity Investees

 

(172

)

(66

)

(10

)

(355

)

(180

)

(28

)

Net Income/(Loss) from continuing operations

 

132,600

 

(492,935

)

(75,546

)

172,702

 

(1,683,068

)

(257,945

)

Net loss from discontinued operations

 

(89,190

)

(137,129

)

(21,016

)

(391,770

)

(368,156

)

(56,422

)

Net Income/(Loss)

 

43,410

 

(630,064

)

(96,562

)

(219,068

)

(2,051,224

)

(314,367

)

Net Loss from continuing operations attributable to non-controlling interests

 

(8,008

)

(5,326

)

(816

)

(16,652

)

(25,716

)

(3,941

)

Net Income/(Loss) attributable to Best Inc.

 

51,418

 

(624,738

)

(95,746

)

(202,416

)

(2,025,508

)

(310,426

)

 

18

 

Summary of Unaudited Condensed Consolidated Balance Sheets
(in thousands)

 

 

 

As of December 31, 2019

 

As of December 31, 2020

 

 

 

RMB

 

RMB

 

US$

 

Assets

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

1,985,413

 

1,383,317

 

212,003

 

Restricted Cash

 

1,786,832

 

2,102,426

 

322,211

 

Accounts and Notes Receivables

 

1,228,995

 

992,410

 

152,093

 

Inventories

 

106,483

 

44,133

 

6,764

 

Prepayments and Other Current Assets

 

2,728,812

 

3,318,736

 

508,618

 

Short-term Investments

 

1,057,598

 

268,647

 

41,172

 

Amounts Due from Related Parties

 

246,758

 

255,917

 

39,221

 

Lease Rental Receivables

 

483,363

 

497,127

 

76,188

 

Assets held for sale

 

64,195

 

483,893

 

74,160

 

Total Current Assets

 

9,688,449

 

9,346,606

 

1,432,430

 

Non-current Assets

 

 

 

 

 

 

 

Property and Equipment, Net

 

2,924,404

 

4,079,235

 

625,170

 

Intangible Assets, Net

 

20,408

 

12,198

 

1,869

 

Long-term Investments

 

230,855

 

221,426

 

33,935

 

Goodwill

 

289,319

 

295,759

 

45,327

 

Non-current Deposits

 

118,629

 

129,645

 

19,869

 

Other Non-current Assets

 

346,645

 

543,949

 

83,364

 

Restricted Cash

 

175,700

 

709,848

 

108,789

 

Lease Rental Receivables

 

993,260

 

647,678

 

99,261

 

Operating Lease Right-of-use Assets

 

4,209,014

 

3,841,813

 

588,784

 

Assets held for sale

 

496,173

 

—

 

—

 

Total non-current Assets

 

9,804,407

 

10,481,551

 

1,606,368

 

Total Assets

 

19,492,856

 

19,828,157

 

3,038,798

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Securitization Debt

 

104,899

 

95,149

 

14,582

 

Short-term Bank Loans

 

2,510,500

 

3,082,537

 

472,419

 

Accounts and Notes Payable

 

3,391,383

 

4,144,711

 

635,205

 

Income Tax Payable

 

7,358

 

14,550

 

2,230

 

Customer Advances and Deposits and Deferred Revenue

 

1,488,630

 

1,526,051

 

233,878

 

Accrued Expenses and Other Liabilities

 

2,006,049

 

2,466,460

 

378,002

 

Financing Lease Liabilities

 

1,363

 

1,581

 

242

 

Operating Lease Liabilities

 

975,475

 

1,038,215

 

159,113

 

Amounts Due to Related Parties

 

9,769

 

34,651

 

5,310

 

Liabilities held for sale

 

74,242

 

167,906

 

25,733

 

Total Current Liabilities

 

10,569,668

 

12,571,811

 

1,926,714

 

 

19

 

 

 

As of December 31, 2019

 

As of December 31, 2020

 

 

 

RMB

 

RMB

 

US$

 

Non-current Liabilities

 

 

 

 

 

 

 

Convertible senior notes held by related parties

 

680,104

 

1,617,846

 

247,946

 

Convertible Senior Notes held by third parties

 

680,104

 

642,121

 

98,409

 

Operating Lease Liabilities

 

3,388,908

 

3,014,945

 

462,061

 

Financing Lease Liabilities

 

2,072

 

2,698

 

413

 

Deferred Tax Liabilities

 

828

 

—

 

—

 

Other Non-current Liabilities

 

137,184

 

175,584

 

26,909

 

Long-term Bank Loans

 

—

 

78,548

 

12,038

 

Liabilities held for sale

 

118,704

 

—

 

—

 

Total Non-current Liabilities

 

5,007,904

 

5,531,742

 

847,776

 

Total Liabilities

 

15,577,572

 

18,103,553

 

2,774,490

 

Shareholders’ Equity

 

 

 

 

 

 

 

Ordinary Shares

 

25,988

 

25,988

 

3,983

 

Treasury Shares

 

—

 

(211,352

)

(32,391

)

Additional Paid-In Capital

 

19,353,400

 

19,487,232

 

2,986,549

 

Statutory reserves

 

7,865

 

8,038

 

1,232

 

Accumulated Deficit

 

(15,629,537

)

(17,710,964

) (12)

(2,714,324

)

Accumulated Other Comprehensive Income

 

163,196

 

151,677

 

23,246

 

BEST Inc. Shareholders’ Equity

 

3,920,912

 

1,750,619

 

268,295

 

Non-controlling Interests

 

(5,628

)

(26,015

)

(3,987

)

Total Shareholders’ Equity

 

3,915,284

 

1,724,604

 

264,308

 

Total Liabilities and Shareholders’ Equity

 

19,492,856

 

19,828,157

 

3,038,798

 

 

(12) Including accumulated accretion to redemption value and deemed dividend in relation to redeemable convertible preferred shares of RMB9,493,807, and accumulated loss from operations of RMB8,217,157.

 

20

 

Summary of Unaudited Condensed Consolidated Statements of Cash Flows
(In Thousands)

 

 

 

Three Months Ended December 31,

 

Fiscal Year Ended December 31,,

 

 

 

2019

 

2020

 

2019

 

2020

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

Net cash generated from continuing operating activities

 

606,189

 

346,937

 

53,172

 

1,131,226

 

11,188

 

1,715

 

Net cash used in discontinued operating activities

 

(119,385

)

(122,616

)

(18,792

)

(278,393

)

(242,423

)

(37,153

)

Net cash Generated from/(Used in) operating activities

 

486,804

 

224,321

 

34,380

 

852,833

 

(231,235

)

(35,438

)

Net cash used in continuing Investing Activities

 

(532,859

)

(162,881

)

(24,963

)

(1,918,474

)

(872,353

)

(133,694

)

Net cash generated from/(used in) discontinued Investing activities

 

3,934

 

(1,226

)

(188

)

5,992

 

(580

)

(89

)

Net cash used in investing activities

 

(528,925

)

(164,107

)

(25,151

)

(1,912,482

)

(872,933

)

(133,783

)

Net cash generated from/(used in) continuing financing activities

 

373,080

 

(172,599

)

(26,452

)

2,377,212

 

1,760,684

 

269,837

 

Net cash generated from/(used in) discontinued financing activities

 

80,000

 

(17,500

)

(2,682

)

(365,400

)

(212,500

)

(32,567

)

Net cash generated from/(used in) financing activities

 

453,080

 

(190,099

)

(29,134

)

2,011,812

 

1,548,184

 

237,270

 

Exchange Rate Effect on Cash, Cash Equivalents, and Restricted Cash

 

(36,216

)

(110,778

)

(16,977

)

5,644

 

(192,110

)

(29,442

)

Net Increase/(Decrease) in Cash and Cash Equivalents, and Restricted Cash

 

374,743

 

(240,663

)

(36,882

)

957,807

 

251,906

 

38,607

 

Cash and Cash Equivalents, and Restricted Cash at Beginning of Period

 

3,582,472

 

4,449,784

 

681,959

 

2,999,408

 

3,957,215

 

606,470

 

Cash and Cash Equivalents, and Restricted Cash at End of Period

 

3,957,215

 

4,209,121

 

645,077

 

3,957,215

 

4,209,121

 

645,077

 

Less: Cash and Cash Equivalents, and Restricted Cash held for sales at end of the Period

 

9,270

 

13,530

 

2,074

 

9,270

 

13,530

 

2,074

 

Cash and Cash Equivalents, and Restricted Cash from continuing operations at End of Period

 

3,947,945

 

4,195,591

 

643,003

 

3,947,945

 

4,195,591

 

643,003

 

 

21

 

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

 

The table below sets forth a reconciliation of the Company’s net loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:

 

Table 13 — Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

 

 

 

Three Months Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(13)

 

Total

 

Net Income/(Loss)

 

(263,884

)

11,468

 

(79,027

)

(60,688

)

(37,538

)

12,862

 

(76,128

)

(492,935

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation & Amortization

 

102,688

 

18,121

 

10,095

 

3,753

 

2,405

 

355

 

7,171

 

144,588

 

Interest Expense

 

—

 

—

 

—

 

—

 

—

 

—

 

53,473

 

53,473

 

Income Tax Expense/(Benefit)

 

1,235

 

—

 

(220

)

—

 

—

 

5,253

 

—

 

6,268

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

—

 

—

 

—

 

—

 

—

 

—

 

(16,621

)

(16,621

)

EBITDA

 

(159,961

)

29,589

 

(69,152

)

(56,935

)

(35,133

)

18,470

 

(32,105

)

(305,227

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

1,706

 

2,373

 

1,829

 

2,255

 

625

 

58

 

17,261

 

26,107

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(8,850

)

(8,850

)

Adjusted EBITDA

 

(158,255

)

31,962

 

(67,323

)

(54,680

)

(34,508

)

18,528

 

(23,694

)

(287,970

)

Adjusted EBITDA Margin

 

(2.7

)%

2.0

%

(12.4

)%

(21.6

)%

(3.6

)%

31.7

%

—

 

(3.1

)%

 

 

 

Three Months Ended December 31, 2019

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(14)

 

Total

 

Net Income/(Loss)

 

261,633

 

16,097

 

(68,105

)

(64,395

)

(14,457

)

34,705

 

(32,878

)

132,600

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation & Amortization

 

70,267

 

14,088

 

6,221

 

2,676

 

48

 

(134

)

10,698

 

103,864

 

Interest Expense

 

—

 

—

 

—

 

—

 

—

 

—

 

26,719

 

26,719

 

Income Tax Expense/(Benefit)

 

1,701

 

21

 

215

 

(213

)

—

 

5,172

 

(13

)

6,883

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

—

 

—

 

—

 

—

 

—

 

—

 

(24,149

)

(24,149

)

EBITDA

 

333,601

 

30,206

 

(61,669

)

(61,932

)

(14,409

)

39,743

 

(19,623

)

245,917

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

4,237

 

2,555

 

3,417

 

2,587

 

766

 

72

 

13,814

 

27,448

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(14,155

)

(14,155

)

Adjusted EBITDA

 

337,838

 

32,761

 

(58,252

)

(59,345

)

(13,643

)

39,815

 

(19,964

)

259,210

 

Adjusted EBITDA Margin

 

4.9

%

2.1

%

(9.6

)%

(43.8

)%

(1.5

)%

77.0

%

—

 

2.6

%

 

(13) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

(14) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

22

 

 

 

Fiscal Year Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(15)

 

Total

 

Net Income/(Loss)

 

(755,305

)

(199,826

)

(175,072

)

(251,511

)

(116,782

)

93,981

 

(278,553

)

(1,683,068

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation & Amortization

 

357,507

 

64,643

 

42,121

 

15,955

 

4,017

 

1,647

 

29,112

 

515,002

 

Interest Expense

 

—

 

—

 

—

 

—

 

—

 

—

 

174,607

 

174,607

 

Income Tax Expense/(Benefit)

 

4,571

 

 

 

(178

)

(830

)

 

 

18,561

 

 

 

22,124

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

—

 

—

 

—

 

—

 

—

 

—

 

(74,727

)

(74,727

)

EBITDA

 

(393,227

)

(135,183

)

(133,129

)

(236,386

)

(112,765

)

114,189

 

(149,561

)

(1,046,062

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

14,188

 

11,123

 

11,006

 

8,803

 

3,144

 

511

 

80,876

 

129,651

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(18,688

)

(18,688

)

Adjusted EBITDA

 

(379,039

)

(124,060

)

(122,123

)

(227,583

)

(109,621

)

114,700

 

(87,373

)

(935,099

)

Adjusted EBITDA Margin

 

(2.0

)%

(2.4

)%

(6.4

)%

(29.3

)%

(4.4

)%

54.4

%

—

 

(3.1

)%

 

 

 

Fiscal Year Ended December 31, 2019

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(16)

 

Total

 

Net Income/(Loss)

 

461,490

 

18,684

 

(122,312

)

(167,600

)

(22,056

)

125,966

 

(121,470

)

172,702

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation & Amortization

 

325,950

 

53,684

 

48,405

 

9,510

 

234

 

1,225

 

37,093

 

476,101

 

Interest Expense

 

—

 

—

 

—

 

—

 

—

 

—

 

79,486

 

79,486

 

Income Tax Expense/(Benefit)

 

1,701

 

21

 

357

 

(1,027

)

—

 

18,988

 

(13

)

20,027

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

—

 

—

 

—

 

—

 

—

 

—

 

(95,440

)

(95,440

)

EBITDA

 

789,141

 

72,389

 

(73,550

)

(159,117

)

(21,822

)

146,179

 

(100,344

)

652,876

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

20,209

 

8,531

 

11,110

 

7,480

 

2,498

 

247

 

41,618

 

91,693

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(14,155

)

(14,155

)

Adjusted EBITDA

 

809,350

 

80,920

 

(62,440

)

(151,637

)

(19,324

)

146,426

 

(72,881

)

730,414

 

Adjusted EBITDA Margin

 

3.7

%

1.5

%

(2.8

)%

(45.0

)%

(0.8

)%

71.4

%

—

 

2.3

%

 

(15) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

(16) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

23

 

The table below sets forth a reconciliation of the Company’s net Income/(loss) to non-GAAP net Income/(loss), non-GAAP net Income/(loss) margin for the periods indicated:

 

Table 14 — Reconciliation of Non-GAAP Net Income/(Loss) and Non-GAAP Net Income/(Loss) Margin

 

 

 

Three Months Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(17)

 

Total

 

Net Income/(Loss)

 

(263,884

)

11,468

 

(79,027

)

(60,688

)

(37,538

)

12,862

 

(76,128

)

(492,935

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

1,706

 

2,373

 

1,829

 

2,255

 

625

 

58

 

17,261

 

26,107

 

Amortization of Intangible Assets Resulting from Business

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(8,850

)

(8,850

)

Non-GAAP Net Income/(Loss)

 

(262,178

)

13,841

 

(77,198

)

(58,433

)

(36,913

)

12,920

 

(67,717

)

(475,678

)

Non-GAAP Net Income/(Loss) Margin

 

(4.5

)%

0.9

%

(14.2

)%

(23.1

)%

(3.9

)%

22.1

%

—

 

(5.1

)%

 

 

 

Three Months Ended December 31, 2019

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(18)

 

Total

 

Net Income/(Loss)

 

261,633

 

16,097

 

(68,105

)

(64,395

)

(14,457

)

34,705

 

(32,878

)

132,600

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

4,237

 

2,555

 

3,417

 

2,587

 

766

 

72

 

13,814

 

27,448

 

Amortization of Intangible Assets Resulting from Business

 

—

 

—

 

—

 

933

 

—

 

—

 

—

 

933

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(14,155

)

(14,155

)

Non-GAAP Net Income/(Loss)

 

265,870

 

18,652

 

(64,688

)

(60,875

)

(13,691

)

34,777

 

(33,219

)

146,826

 

Non-GAAP Net Income/(Loss) Margin

 

3.9

%

1.2

%

(10.6

)%

(45.0

)%

(1.5

)%

67.2

%

—

 

1.4

%

 

(17) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

(18) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

24

 

 

 

Fiscal Year Ended December 31, 2020

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(19)

 

Total

 

Net Income/(Loss)

 

(755,305

)

(199,826

)

(175,072

)

(251,511

)

(116,782

)

93,981

 

(278,553

)

(1,683,068

)

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

14,188

 

11,123

 

11,006

 

8,803

 

3,144

 

511

 

80,876

 

129,651

 

Amortization of Intangible Assets Resulting from Business

 

—

 

—

 

—

 

2,782

 

—

 

—

 

—

 

2,782

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(18,688

)

(18,688

)

Non-GAAP Net Income/(Loss)

 

(741,117

)

(188,703

)

(164,066

)

(239,926

)

(113,638

)

94,492

 

(216,365

)

(1,569,323

)

Non-GAAP Net Income/(Loss) Margin

 

(3.8

)%

(3.7

)%

(8.6

)%

(30.9

)%

(4.5

)%

44.8

%

—

 

(5.2

)%

 

 

 

Fiscal Year Ended December 31, 2019

 

(In RMB’000)

 

Express

 

Freight

 

Supply Chain

 

Global

 

UCargo

 

Capital

 

Unallocated(20)

 

Total

 

Net Income/(Loss)

 

461,490

 

18,684

 

(122,312

)

(167,600

)

(22,056

)

125,966

 

(121,470

)

172,702

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

20,209

 

8,531

 

11,110

 

7,480

 

2,498

 

247

 

41,618

 

91,693

 

Amortization of Intangible Assets Resulting from Business

 

—

 

—

 

—

 

3,660

 

—

 

—

 

—

 

3,660

 

Subtract:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

—

 

—

 

—

 

—

 

—

 

—

 

(14,155

)

(14,155

)

Non-GAAP Net Income/(Loss)

 

481,699

 

27,215

 

(111,202

)

(156,460

)

(19,558

)

126,213

 

(94,007

)

253,900

 

Non-GAAP Net Income/(Loss) Margin

 

2.2

%

0.5

%

(5.1

)%

(46.4

)%

(0.8

)%

61.5

%

—

 

0.8

%

 

(19) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

(20) Unallocated expenses are primarily related to corporate administrative expenses and other miscellaneous items that are not allocated to individual segments.

 

25

 

The table below sets forth a reconciliation of the Company’s Diluted EPS to non-GAAP Diluted EPS for the periods indicated:

 

Table 15 — Reconciliation of Diluted EPS and Non-GAAP Diluted EPS

 

 

 

Three Months Ended December 31,

 

Fiscal Year Ended December 31,

 

 

 

2020

 

2020

 

(In ‘000)

 

RMB

 

US$

 

RMB

 

US$

 

Net Loss Attributable to Ordinary Shareholders

 

(487,609

)

(74,730

)

(1,657,352

)

(254,004

)

Add:

 

 

 

 

 

 

 

 

 

Share-based Compensation Expenses

 

26,107

 

4,000

 

129,651

 

19,869

 

Amortization of Intangible Assets Resulting from Business Acquisitions

 

—

 

—

 

2,782

 

426

 

Subtract:

 

 

 

 

 

 

 

 

 

Gain from appreciation of investments

 

(8,850

)

(1,356

)

(18,688

)

(2,864

)

Non-GAAP Net Loss Attributable to Ordinary Shareholders for Computing Non-GAAP Diluted EPS

 

(470,352

)

(72,086

)

(1,543,607

)

(236,573

)

Weighted Average Diluted Shares Outstanding During the Period

 

 

 

 

 

 

 

 

 

Diluted

 

385,575,665

 

385,575,665

 

387,492,906

 

387,492,906

 

Diluted (Non-GAAP)

 

385,575,665

 

385,575,665

 

387,492,906

 

387,492,906

 

Diluted EPS

 

(1.26

)

(0.19

)

(4.28

)

(0.66

)

Add:

 

 

 

 

 

 

 

 

 

Non-GAAP adjustment to net loss per share

 

0.04

 

—

 

0.30

 

0.05

 

Non-GAAP Diluted EPS

 

(1.22

)

(0.19

)

(3.98

)

(0.61

)

 

26