In the first half of the year, the economy continued to be active, and the freight logistics industry assumed the responsibility of helping the circulation of economic factors and became the most direct beneficiary.
The financial report released by the digital freight platform Manbang on August 23 shows that in the second quarter of 2023, its platform unit volume and user volume have achieved significant growth, and driven the platform performance to a new high.
The market scale continues to expand, online transactions are becoming more active, and the digital freight industry is undoubtedly on the rise. Manbang’s series of proactive measures have also further increased the platform’s market share. The high-quality development of digital freight still depends on the support and guidance of leading platforms.
Behind the new high performance, the core position of user value is prominent
The financial report shows that Manbang’s core performance indicators set a new record in the second quarter since its listing. It recorded operating income of 2.06 billion yuan, a year-on-year increase of 23.5%; it recorded Non-GAAP net profit of 720 million yuan, a year-on-year increase of 170.8%, both of which were the highest in a single quarter since its listing.
This is consistent with Manbang’s expected strategy for 2023. Previously, when releasing the 2022 annual report, Manbang management made it clear in a conference call that the focus this year is on acquiring customers and increasing the monetization rate. There is obviously an important connection between the two. The focus put forward by Manbang management is to improve product functions, optimize user experience, strengthen platform ecological governance and user rights protection, "attract more small and medium-sized enterprise users (medium and low-frequency direct customers) through online channels, and promote new users" While fulfilling the contract for the first time, we are committed to improving the conversion rate of converting non-paying users into paying members." - Using a good platform environment and attractive income expectations to stimulate users' willingness to actively embrace the platform is a benign ecological path. . Currently, Manbang has proven the value of its strategy.
From the perspective of platform operation, the core demands of users mentioned by Zhang Hui, Chairman and CEO of Manbang Group - "More, faster, more economical" are exactly Manbang's focus.
In the second quarter, Manbang’s average monthly active cargo owners reached 2 million, a year-on-year increase of 30.5%. The number of active contract fulfillment drivers in the past 12 months reached 3.75 million, both reaching record highs. At present, the main transactions in the freight industry have shifted online, and more supply and volume are concentrated on the Manbang platform. The abundant supply of goods and transportation capacity form a positive cycle in which cargo owners and drivers attract each other.
On the other hand, Manbang always insists on optimizing the platform algorithm to fundamentally promote the improvement of order receiving and contract fulfillment efficiency. In the second quarter, Manbang launched measures such as a streamlined delivery process, standardized premium car products, and more efficient driver order taking and recommendation strategies. Both its products and operations focus on efficiency, which is highly perceived by users.
In addition, Manbang has never stopped dealing with typical problems such as repeated low-price supply, which has become an important rule for Manbang to eliminate bad user experience from the source. On the basis of a series of price misfill reminders and malicious price comparison blocking rules, Manbang also launched a fully upgraded "Fire Eyes" product in July to further improve the algorithm's identification of the entire link and the platform's The ability to analyze transaction processes puts drivers and cargo owners in a healthy quotation system and transaction environment. Public data shows that since this year, Manbang has blocked more than 40,000 heavy goods per day, and the heavy goods rate has dropped by 30%.
Good ecological management measures save users a lot of energy and process costs, and they also go "two-way" with Manbang. In the second quarter, Manbang 688 shipper members and non-member shippers increased by 25% and 40% respectively.
In this growth process, relying on the attractiveness created by the high-quality ecosystem of the platform, Manbang has gradually completed the replacement of the inefficient offline regular customer model, and the quality of performance has also been improved. Judging from the data, while achieving good user indicators, the expenses are basically the same year-on-year, and the costs have not increased significantly. On the one hand, this shows that the user stickiness of the platform is high and the operational efficiency has been improved. On the other hand, the scale effect is further enhanced.
In the second quarter, Manbang's fulfillment order volume and fulfillment rate hit new highs - the number of fulfillment orders reached 40.2 million, a year-on-year increase of 44.5%. The average fulfillment rate in the second quarter increased by 10 percentage points year-on-year to 30%, among which 688 cargo owners had an average fulfillment rate in the second quarter. Over 50%. The initiative for growth comes from the strength of the platform.
Digital freight resonates with multiple factors and accelerates high-quality development
Starting from the performance of Manbang, focusing on the two major roles of cargo owners and drivers, the flywheel effect driven by the platform's ecological advantages has been very significant. CITIC Securities pointed out in the research report that Manbang’s focus on platform ecological governance and protection of user rights has become the key to its leading share, thereby building competition barriers based on dual-end resources.
Internal value is solid and the external environment is providing tailwinds. Macroeconomics is only one aspect. In the long term, Manbang is facing its own "tailwinds" in terms of policy trends and capital market preferences.
At the policy level, the logistics industry and platform economy are important levers to promote production value and the growth of domestic demand. The situation has become clear at the national policy level to strengthen support for the private economy, platform economy, and digital economy.
Taking recent news as an example, on August 21, the State Council conducted its third special study with the theme of "accelerating the development of the digital economy and promoting the deep integration of digital technology and the real economy." The freight industry is a typical industry where the digital economy and the real economy deeply intersect, and digital freight is a representative industry among them.
The "China Digital Freight Development Report" released by the China Federation of Logistics and Purchasing shows that my country's overall digital freight market size will be approximately 700 billion yuan in 2022, with a market penetration rate of only about 15%. Digital freight still has ample room to play a role in improving the quality and efficiency of the real economy. The key is to proactively explore and strengthen business communication.
This is another major benefit held by Manbang. As an export-oriented platform that extensively connects economic factors and production factors, Manbang has always insisted on taking the initiative to penetrate into the real economy and use the advantages of digital freight to improve the operating efficiency of the real economy.
For example, at the agricultural level, Manbang continues to solve problems such as difficulty in finding a car and transportation for special agricultural products such as Shandong Jinxiang garlic, Guizhou pepper, and Lunwan orange, and takes advantage of the trend to promote local employment. At the level of local characteristic industries, Manbang has provided transportation assistance for the Nankang furniture industry belt in Ganzhou, Jiangxi. Manbang data shows that in the first half of the year, local furniture transportation volume in Nankang increased by 17.8% compared with the second half of last year, and increased by 56.4% month-on-month in June. Manbang's intra-city freight brand "Xingxing" provides differentiated services for large-scale industrial scenarios such as furniture and clothing.
It is worth mentioning that through extensive absorption of market demand, Manbang platform ecology has more basis for improvement. The deepening connection with the real economy has made Manbang's business base more solid and its demand more reliable.
On this basis, Manbang’s prospects have been widely favored by the capital market. Since the release of the financial report, Manbang’s share price has risen by more than 10%. In terms of long-term layout, old shareholders of Manbang such as Sequoia and Fidelity International, and long-term investors such as Jing Lin who bought during the IPO, all increased their holdings of Manbang in the second quarter. Among them, Invesco, the top international long-term institution that liquidated its positions due to the cyber security review of Manbang in the third quarter of 2021, re-purchased a position of approximately US$110 million in the second quarter, proving that the value of Manbang's layout has been highlighted.
Considering that the US$500 million open market repurchase plan announced by Manbang in March will still continue and have a positive impact on the market, Manbang's solid performance will undoubtedly resonate with capital sentiment and further enhance its capital market priorities. class.
In 2023, benefiting from the relatively active economy, the penetration rate of the digital freight industry will accelerate. Manbang has verified the correctness of its strategy in the first half of the year. In the second half of the year, its accumulated strength will be further released to bring outstanding performance to the market.
Source: US Stock Research Institute