2020 2Q Earnings Presentation - Seeking Alpha

2020 2Q Earnings Presentation

August 17th, 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

2nd Quarter 2020 Highlights and Strategic Updates

• Post pandemic recovery faster than expected. Strategically targeted both top-line growth and profitability while enhancing efficiency across multiple

businesses

• Focused on high-quality growth opportunities and accounts with higher margins, while reduced risks by implementing stringent credit control

• Continued healthy volume gain and costs reduction in Express and Freight segments, improved Company’s gross margin by 0.9% YoY despite

challenging market dynamics

• Made strong progress in Store+ which resulted in significant loss reduction

• Strong parcel volume growth in Southeast Asia, further boosted by entry into additional markets of Malaysia, Singapore and Cambodia

• Achieved gross profit of RMB 569.7 million, adjusted EBITDA of RMB 157.7 million, non-GAAP net income of RMB 11.2 million, and more than doubled

non-GAAP diluted EPS YoY to RMB 0.05 amid intensifying competition

• Generated net operating cash flow of RMB722.6 million during the second quarter, well covered our planned capital expenditure of RMB424.1 million

• Maintained strong balance sheet and liquidity. Cash and cash equivalents, restricted cash, and short-term investments totaling RMB5.1 billion at the

end of the second quarter

3

Financial Results

4

Financial Highlights – 2nd Quarter, 2020

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.

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.

5

418 520 570 486

1,441 1,9596.2% 5.9% 6.8%

2.4% 5.2% 5.6%

2Q18 2Q19 2Q20 2017 2018 2019Gross Profit/(Loss) Gross Profit/(Loss) Margin %

6,732 8,788 8,418

19,990

27,961

35,176

2Q18 2Q19 2Q20 2017 2018 2019

RevenueRMB mm

Gross Profit and Gross MarginRMB mm

35.9%FY 2018 – FY 2019 YoY

1

(56) 6 11

(923)(452)

(124)(0.8%)

0.1% 0.1%

(4.6%)(1.6%) (0.4%)

2Q18 2Q19 2Q20 2017 2018 2019

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

Adjusted EBITDA and Adjusted EBITDA MarginRMB mm

Non-GAAP Net (Loss)/Income and Non-GAAP Net Margin3

RMB mm

42148 158

(583)

(18)360

0.6%1.7% 1.9%

(2.9%)

(0.1%)1.0%

2Q18 2Q19 2Q20 2017 2018 2019

Adj. EBITDA Adj. EBITDA Margin

22

9.6%2Q19 – 2Q20 YoY

1

6

Revenue breakdown by segments – 2nd Quarter, 2020

Notes:


RMB % of Revenue RMB % of Revenue

Core Logistics and Supply Chain

Express 5,448 62.1% 5,152 61.1% (5.4%)

Freight 1,306 14.9% 1,365 16.2% 4.5%

Supply Chain Management 600 6.8% 510 6.1% (15.1%)

UCargo 522 5.9% 493 5.9% (5.6%)

Capital 56 0.6% 49 0.6% (12.6%)

Total Core Logistics and Supply Chain 7,933 90.3% 7,568 89.9% (4.6%)

Store+ 791 9.0% 657 7.8% (16.8%)

Global 65 0.7% 193 2.3% 196.7%

Total Revenue 8,788 100.0% 8,418 100.0% (4.2%)

RMBmm (Except for %)

2Q2019 2Q2020

%Change YoY

Cost trend - 2nd 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

7

Adjusted Selling, General & Administrative Expenses and % of Revenue 3

RMB mm

Adjusted Research & Development Expenses and % of Revenue 3

RMB mm

444 491 519

1,3571,817 1,952

6.6%

5.6% 6.1%

6.8% 6.5%

5.6%

2Q18 2Q19 2Q20 2017 2018 2019Selling, General & Administrative Expenses Selling, General & Administrative Expenses as % of Revenue

49 60 48

112

175236

0.7% 0.7% 0.6% 0.6% 0.6% 0.7%

2Q18 2Q19 2Q20 2017 2018 2019Research & Development Expenses Research & Development Expenses as % of Revenue

1

7,8496,315 8,268

19,504

26,520

33,21793.8%

94.1%

93.2%

97.6%

94.8%94.4%

2Q18 2Q19 2Q20 2017 2018 2019Cost of Revenue As % of Revenue

Cost of Revenue and % of RevenueRMB mm

Adjusted Operating Expenses and % of Revenue 3

RMB mm

2 2

493 551 567

1,470

1,9922,188

7.3% 6.3%

6.7% 7.4% 7.1%

6.2%

2Q18 2Q19 2Q20 2017 2018 2019Operating Expenses Operating Expenses as % of Revenue

2

(RMB mm, ex cept for %)

Revenue 5,152 1,365 510 493 49 7,568 657 193 8,418

YoY Growth (5.4%) 4.5% (15.1%) (5.6%) (12.6%) (4.6%) (16.8%) 196.7% (4.2%)

Gross Profit 278 122 49 13 45 507 85 (22) 570

YoY Growth 13.5% 46.3% (7.5%) (42.3%) 13.0% 14.4% 2.6% n/m 9.6%

Gross Profit Margin 5.4% 8.9% 9.7% 2.6% 90.8% 6.7% 13.0% (11.4%) 6.8%

YoY Growth +0.9ppts +2.5ppts +0.8ppts -1.6ppts +20.6ppts +1.1ppts +2.5ppts -2.2ppts +0.9ppts

Adjusted EBITDA1 189 73 6 (18) 41 291 (67) (48) (18) 158

YoY Growth (12.4%) 136.3% (60.5%) n/m 25.7% (2.5%) n/m n/m n/m 6.4%

Adjusted EBITDA1 Margin 3.7% 5.4% 1.1% (3.6%) 82.5% 3.8% (10.2%) (24.8%) 1.9%

YoY Growth -0.3ppts +3.0ppts -1.3ppts -4.5ppts +25.1ppts 0.0ppts +2.6ppts +25.0ppts +0.2ppts

Total

Total Core

Logistics

and Supply

Chain

Core Logistics and Supply Chain

8

Notes:


1. 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 (SBC) expense and fair value change of equity investments. See the slide entitled “GAAP to Adjusted/Non-GAAP Measures Reconciliation”

for more information about the non-GAAP measures used in this presentation.

Segment Reporting

432

334

723

26

637

853

2Q18 2Q19 2Q20 2017 2018 2019

Operating CashflowsRMB mm

CAPEXRMB mm

230

381424

750

1,078

1,498

2Q18 2Q19 2Q20 2017 2018 2019

Operating cash flow and capital expenditure

As of June 30, 2020, cash and cash equivalents, restricted cash and short-term investments were RMB5.1 billion, compared to RMB4.2 billion as of March

31, 2020

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

9

3.8%*

*As a % of Revenue

3.9%* 4.3%*

3.4%* 4.3%* 5.0%*

RMBmm(Except for %)

GAAP to non-GAAP measures reconciliation

Notes:


1. In the second quarter of 2020, the Company recorded share-based compensation (“SBC”) expense of RMB39.7 million, of which approximately RMB0.7 million was allocated to cost of revenue, RMB2.9 million was allocated to selling expenses, RMB33.6 million was allocated to general and administrative expenses, and RMB2.5 million was

allocated to research and development expenses.

10

Non-GAAP Net (Loss)/Profit FY18 FY19 2Q19 2Q20

Net Loss (508) (219) (22) (31)

Add:

Share-based Compensation Expense1 109 99 26 40

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)/Profit (452) (124) 6 11

Non-GAAP Net (Loss)/Profit Margin (1.6%) (0.4%) 0.1% 0.1%

EBITDA and Adjusted EBITDA FY18 FY19 2Q19 2Q20

Net Loss (508) (219) (22) (31)

Add:

Depreciation & Amortization 462 493 151 122

Interest Expense 75 79 15 41

Income Tax Expense 12 18 4 4

Subtract:

Interest Income (103) (95) (26) (18)

EBITDA (63) 276 122 118

Add:

Share-based Compensation Expense1 109 99 26 40

Add/(Subtract):

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

Adjusted EBITDA (18) 361 148 158

Adjusted EBITDA Margin (0.1%) 1.0% 1.7% 1.9%

Business Update

11

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

2Q20 Recap

Executed strategy of balanced growth and profitability

Successful in maintaining position as one of the top-tier players in the market despite intensified market conditions

Parcel volume increased by 19.3% YoY to 2.3 billion, representing market share of 10.7%

Cost reduction of 21.5% YoY outpaced ASP reduction of 20.7% YoY. Gross margin per parcel improved by 0.9ppts YoY

Covered 100% of districts and counties across China, self operated 87 hubs and sortation centers, managed 4,190 line hauls and 47,397 franchisee operated service stations

Strategies

Balanced volume and profitability growth: targeting continued high growth and 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

12

1,2801,907 2,275

3,769

5,470

7,576

10.5% 12.2%

10.7% 9.4%

10.8%

11.9%

2Q18 2Q19 2Q20 2017 2018 2019

BEST Express Volume Market Share

1.50 1.17 0.94 1.98

1.48 1.22

1.58 1.56

1.20

1.32 1.61

1.52

3.08 2.73

2.14

3.30 3.09

2.74

2Q18 2Q19 2Q20 2017 2018 2019

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

Express

Parcel Volumemm

Revenue per Parcel 2

RMB

Gross Profit per ParcelRMB

0.18

0.13 0.12 0.09

0.14 0.14

5.5% 4.5%

5.4%

2.7%

4.4% 4.7%

2Q18 2Q19 2Q20 2017 2018 2019

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

Cost of Revenue per ParcelRMB

3.26 2.86

2.26

3.39 3.24 2.88

2Q18 2Q19 2Q20 2017 2018 2019

*Gross 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

13

33

3

1

0.87 0.71

0.57

1.01 0.87

0.76

2Q18 2Q19 2Q20 2017 2018 2019

0.190.14

0.08

0.37

0.18 0.13

2Q18 2Q19 2Q20 2017 2018 2019

0.11 0.09 0.08

0.13 0.11

0.10

2Q18 2Q19 2Q20 2017 2018 2019

0.34 0.23 0.21

0.47

0.33 0.24

2Q18 2Q19 2Q20 2017 2018 2019

Transportation Cost per ParcelRMB

Labor Cost per ParcelRMB

Other Costs per ParcelRMB

Lease Cost per ParcelRMB

Express – Cost trend

Notes:


14

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

2Q20 Recap

Continued to solidify its leadership position and achieved growth rate significantly higher than industry-wide average

Freight volume increased by 28.9% YoY to 2.23 million tonnes

Cost reduction of 21.1% YoY outpaced ASP reduction of 18.9% YoY. Gross margin per tonne improved by 2.5ppts YoY to 8.9%

Covered 96% of districts and counties across China, self operated 97 hubs and sortation centers, managed 2,180 line hauls and 17,379 franchisee operated service stations

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

15

578 545 419

656 585 542

136 161

139

123 142 165

714 707

557

779 727 707

2Q18 2Q19 2Q20 2017 2018 2019

Cost per Tonne Last-mile delivery service fee

39 48 55

(43)

29 42

5.2% 6.4%

8.9%

(5.8%)

3.8% 5.5%

2Q18 2Q19 2Q20 2017 2018 2019

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

1,366 1,730 2,230

4,316

5,430

6,980

2Q18 2Q19 2Q20 2017 2018 2019

754 755

612 736 756 749

2Q18 2Q19 2Q20 2017 2018 2019

Freight

Freight Volume000’s tonnes

Revenue per Tonne 1

RMB

Cost of Revenue per TonneRMB

Gross Profit/(Loss) per TonneRMB

Notes:


1. 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

2

16

2

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

2Q20 Recap

Focused on expanding franchised cloud OFC business while targeting projects with higher margins and clients with strong credit profile

Number of orders fulfilled increased by 28.5% YoY to 111.3 million, of which the total number of orders fulfilled by franchised Cloud OFCs increased by 46.4% YoY to 53.7 million

Gross margin improved by 0.8ppts YoY to 9.7%

Continue to expand nationwide network, increasing total number of self operated and franchised Cloud Order Fulfilment Centers by 13.0% YoY to 418, with GFA of 3.4 million square

meters

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

Focus on Fashion & Apparel and FMCG segments: 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

17

BEST CloudOFCs

CustomerWarehouses

BondedWarehouses

BEST FranchiseOFCs

1,380 1,607 1,609 1,389 1,719 1,705

1,008 1,235

1,802

995 1,090

1,548 2,388

2,842

3,412

2,384

2,809

3,253

2Q18 2Q19 2Q20 2017 2018 2019

Self-Operated Cloud OFCs Franchised Cloud OFCs

110 111 92 99 115 108

238 259 326 228 237

293

348 370

418

327 352

401

2Q18 2Q19 2Q20 2017 2018 2019


38 52 49

98

104

138

7.6%8.7%

9.7%

6.1%5.0%

6.3%

2Q18 2Q19 2Q20 2017 2018 2019

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)

Number of Cloud OFCsEnd of Period

41 50 58132 164 199

20 37 54

48

82

158

6187

111

180

247

357

2Q18 2Q19 2Q20 2017 2018 2019


Notes:


18

19

Transportation Service Provider

FleetDrivers

Truckload Demand

Key Accounts, SME,

Agents and Brokers

Service Quality

Evaluation

Parts Sales &

General MaintenanceReal-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

2Q20 Recap

Number of registered drivers on the UCargo Mobile app more than doubled YoY to 244,234

Number of transactions increased by 19.8% YoY to 137,257

Discontinuation of several Key Account customers to minimize credit exposure

Strategies

Strategic focus on brokerage business: bring more SMEs and drivers directly onto the UCargo app and transact on 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

12,373

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

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

20

58,358

100,954

156,255 189,129

209,357

244,234

1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

151

522 493

892

2,574

2Q18 2Q19 2Q20 2018 2019

UCargo – Revenue from External TransactionsRMB mm

70,144 20,132 20,902

318,727

87,067

25,781 94,406 116,355

147,551 532,040

95,925 114,538 137,257

466,278

619,107

2Q18 2Q19 2Q20 2018 2019

Internal Transactions External Transactions

2Q20 Recap

Developing a partnership model to accelerate the growth of membership and franchise stores onto Store+ platform, while improving efficiency of the supply chain and reduce

fulfillment costs

Continue to execute its strategy of enhancing order quality to improve margin. Gross margin improved by 2.5ppts YoY to 13.0%, Adjusted EBITDA margin improved by 2.6ppts YoY to

negative 10.2%

Number of order fulfilled decreased by 1.6% YoY to 767,502

Number of membership stores and number of branded stores reached 436,636 and 3,850 respectively

Strategies

Partnership Model: work with partners for customers acquisition, sales/marketing, fulfilment and delivery, in order to scale the business and improve profitability

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

Store+

Online

Merchants

Offline Consumers

Merchandise and services flowServices and data flow

Membership

and Branded

Stores

Last-Mile Services

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

21

& Partners

272 345 335 282 351 346

476

2,7613,515

941,489

3,268

748

3,106

3,850

376

1,840

3,614

2Q18 2Q19 2Q20 2017 2018 2019

Self-Operated Stores Franchised Stores

397,289 438,140 436,636

363,755 423,636 414,136

2Q18 2Q19 2Q20 2017 2018 2019

870,591 755,756 767,502

2,403,538

3,091,269 2,919,568

2Q18 2Q19 2Q20 2017 2018 2019

Store+

Number of Branded Stores Number of Membership Stores

Gross Profit & Gross MarginRMB mm

Number of Orders Fulfilled

64 83 85

153

255

322

7.5%

10.5%

13.0%

6.9% 9.0%

11.4%

2Q18 2Q19 2Q20 2017 2018 2019

Gross Profit Gross Margin

Notes:


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

22

23

Countries and Regions with Physical Network

Cross Border E-Commerce Logistics

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

Global

2Q20 Recap

Continued strong momentum in Southeast Asia

oRobust parcel volume growth in Thailand and Vietnam

oLaunched express delivery networks in Malaysia, Cambodia and Singapore

Strategies

Capture enormous growth opportunities in Southeast Asia: continue to expand

networks in Thailand, Vietnam, Malaysia, Cambodia and Singapore, as well as plan

to roll out networks in Indonesia and the Philippines in the future

Develop more cross-border services and solutions

Notes:


* QoQ % Growth

24

Global

237 783

2,607

5,157

8,840

16,100

1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

Parcel Volume in Southeast Asia‘000 Parcels

Looking Ahead

Committed to delivering high-quality growth in a challenging market environment

Maintain a balanced growth strategy and strive for profitability by leveraging technology-enabled integrated supply chain and logistics service model

Continue to emphasize on e-commerce related services, invest in technology application and automation, capture revenue and cost synergies across

multiple business units, and enhance service quality

Continue to evaluate various strategic options for future development with the goal of creating a capital structure that is aligned with the growth goals of

our businesses

25

Thank you!

26

Empower Business Enrich Life

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2020 2Q Earnings Presentation - Seeking Alpha