On the evening of October 30th, Deppon released the third quarter earnings report for 2019. The financial report shows that the operating income in the first three quarters of 2019 was 2.049 billion pounds, up 14.93% year-on-year; the net profit attributable to shareholders of listed companies was 12 million pounds, down 75.7% year-on-year, net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses. It was -10,128,600 pounds, down 129.25% year-on-year. Basic earnings per share of £0.0133.

According to Deppon's previous 2019 semi-annual report, Deppon's third-quarter net profit was 672,000 pounds, down 96.03% year-on-year, and the non-net profit was -1024.35 million pounds, down 188.22% year-on-year.

In the first three quarters of 2019, the company's gross profit was 193.41 million pounds, down 23.62% year-on-year; the gross profit margin was 9.44%, down 4.76 percentage points year-on-year.

For the reasons behind the profit, Deppon Express explained in the third quarterly report that the main reason for the cost increase in the third quarter was that the company continued its strategy of “rushing revenue” in the first half of the year, maintaining investment in manpower and capacity, aiming to improve the full link timeliness. And customer experience, further enhance core competitiveness, attract customers, and increase revenue growth.

According to the above chart, the operating income for January-September 2018 was 1.783 billion pounds, up 9.6% year-on-year; the net profit attributable to shareholders of listed companies was 0.51 billion pounds, up 28.32% year-on-year. Compared with last year in the third quarter of 2019, revenues have increased, but net profit has fallen sharply. According to insiders of Deppon Express, in the second half of the year, Deppon Express adjusted its strategy in a timely manner, transforming “rushing income” into “quality” in the second half of the year, increasing investment control and improving service quality, and reducing costs and efficiency.

Deppon's revenue is mainly derived from the revenue of express delivery, express business and other businesses. According to the financial report, in the first three quarters of 2019, the express business revenue was 1.147 billion pounds, an increase of 38.24%; the express business income was 863 million pounds, down 6.06% year-on-year; the other business income was 40 million pounds, an increase of 13.24%.

In the second quarter of 2019, Deppon's express business revenue was 742 million pounds, up 49.86% year-on-year; express business revenue was 555 million pounds, down 9.70% year-on-year; other business revenue was 25 million pounds, up 5.86% year-on-year.

In other words, in the third quarter of 2019, Deppon's revenue from the express delivery business was 405 million pounds, the express business revenue was 308 million pounds, and other business income was 15 million pounds. As can be seen from the specific revenue, Deppon is very determined on the road of transformation of large-size express delivery.

Deppon continues to make adjustments to focus on the bulk of the express delivery field. Beginning in July 2018, Deppon Logistics officially announced its name change to Deppon Express, which will open a new chapter for large-size express delivery with new services. At the same time, Deppon has also launched a large-piece express product after its name change - 3-60kg for large parts; 2019 In March, Deppon launched a brand new upgraded visual identity, highlighting up to 60kg, 100% free upscale courier service. It can be seen that Deppon has a "good intention" in the field of large-size express delivery.

However, its performance is not satisfactory. As we all know, Deppon has not been flat since its listing in 2018. The frequent changes in personnel, the unsatisfactory speed of the express business, the disappointment of customers' £16,700 parcels, the thunder of wealth management products, the decline in performance, and the decline in market value are all putting pressure on Deppon.

The secretary of the board of Deppon shares has stated that the stock market share price is affected by multiple factors. At present, the company is fully committed to the large-scale express delivery business and is in the investment period. In the short-term, the overall gross profit margin of the company has declined with the increase in the proportion of express revenue. However, in the long run, with the gradual emergence of the scale benefits of the express delivery business, the gross profit margin is expected to be gradually restored.

However, Deppon, who is from the express business, wants to transform into a large-volume express field. Deppon needs to clear its own focus, make a choice between express and express, and improve the quality of service. If there is no fundamental reversal, Deppon Express The performance will continue to be squeezed.

The express delivery market as a whole has entered a medium-speed growth stage, and the low-cost consumption war is still continuing. The large-scale expansion of the Tongda system is full of smoke of low-cost consumption war. Deppon has not established the main channel advantage in the express delivery market, which is relatively competitive. In the period of not fully achieving high timeliness and high quality, it is difficult to benefit from the big market leader.

In the market where the crowds compete, if a company is only one step ahead, it is easy for the opponent to be dragged back to the low-cost war. It is possible to gain an advantage by taking 10 steps. To gain a lead, Deppon needs capital leverage to improve service quality and experience.

Deppon Express is in a period of transitional pain in the short term. Looking forward to the future, with the return of the founders and the adjustment of its own business strategy, it is expected that the company's profitability will gradually improve.

For the current Deppon, the transformation has always been difficult, and I hope that Debon can rely on its own talent + team competitiveness to survive the transition period.

Reprinted from the network