Q4 2024 Earnings Summary
- The company reported strong revenue growth in the fourth quarter of 2024, particularly in its freight brokerage business, which grew by 70% year-over-year due to increased service fee rates, despite a reduction in transaction volume. Additionally, the company anticipates over 60% year-on-year growth in adjusted operating profit for 2025.
- Fulfilled orders increased by 24.3% year-over-year in the fourth quarter, surpassing industry growth, driven by robust new user acquisition, effective operational strategies, and the rapid growth of new business lines like the less-than-truckload (LTL) business. Average shipper monthly active users surpassed 3 million for the first time in December, reflecting the success of their user acquisition strategies.
- The fulfillment rate reached a record high of 37.5% in the fourth quarter, up 5.4 percentage points year-over-year, due to improvements in user mix, precision operational strategies, and supply-demand dynamics. The company expects the fulfillment rate to continue its upward trajectory, enhancing operational efficiency and user satisfaction.
- The company expects its total revenue growth to moderate in 2025 due to strategic adjustments in its freight brokerage business, including reducing the proportion of freight brokerage revenue in the overall mix. This could negatively impact overall revenue growth.
- The company recorded a significant impairment loss of RMB 350 million in Q4 2024 due to a failed investment in an e-commerce platform focused on tire sales and aftermarket auto parts supply chain. This raises concerns about management's past investment decisions and capital allocation strategies.
- The company anticipates order volume growth of at least 15% in 2025, which is lower than the 24% growth achieved in Q4 2024, suggesting a potential deceleration in growth momentum.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Revenues | Q1 2025 | no prior guidance | RMB 2.63 billion to RMB 2.68 billion; growth 15.9%-18.1% | no prior guidance |
Order Volume Growth | FY 2025 | no prior guidance | at least 15% year-over-year | no prior guidance |
Adjusted Operating Profit Growth | FY 2025 | no prior guidance | over 60% year-over-year | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Fulfillment Rate Optimization and Efficiency | Q1–Q3 calls consistently highlighted improvements: record-high rates in Q1 , premium cargo bidding and operational strategies in Q2 , and improved direct shipper mix in Q3. | Q4 achieved a record high of 37.5% with further improvements via user mix optimization and algorithm-driven recommendations. | Consistent improvement with bullish sentiment and technical upgrades driving higher performance. |
Order Volume Growth Trends and Deceleration Concerns | Q1 reported robust 29.6% YoY growth ; Q2 mentioned 22% growth with some deceleration due to extreme weather ; Q3 displayed strong performance with 22.1%–year-on-year growth and muted deceleration concerns. | Q4 delivered 24% YoY growth, with optimism regarding continued growth and minimal mention of deceleration issues. | Sustained strong growth with reduced deceleration concerns in Q4. |
User Acquisition and Shipper Base Expansion | Q1 showed steady growth with 2.14M MAUs and strong new user registrations ; Q2 reported 2.65M MAUs driven by effective online and offline initiatives ; Q3 highlighted 2.84M MAUs and active branding campaigns. | Q4 surpassed 3M MAUs (reaching 2.93M with milestone in December) and introduced the 288-tier Mini Membership to boost growth. | Consistent and accelerating growth in the shipper base with enhanced acquisition strategies. |
Monetization Strategies and Transaction Service Revenue Growth | Q1 reported 61.5% YoY growth with new commission models ; Q2 saw a 63.4% increase and refined strategies ; Q3 reached 68.6% growth with improved monetized order penetration and commission fine-tuning. | Q4 delivered 71.1% revenue growth, with further enhancements in commission metric granularity and a rise in monetization amount per order. | Progressively enhanced monetization with steadily increasing revenue growth and improved commission strategies. |
Freight Brokerage Business Performance and Strategic Revenue Mix Adjustments | Q1 showed a 24.9% YoY growth in freight brokerage revenue and noted a shift towards transaction service income ; Q2 reported 22.7% YoY growth ; Q3 indicated modest 19.7% YoY growth with continued focus on user demand. | Q4 posted a dramatic 70% YoY revenue growth in freight brokerage due to increased service fee rates and proactive strategic adjustments to favor high‐margin transaction services. | Significant positive shift and strategic rebalancing toward a higher-margin revenue mix. |
Growth of Less-Than-Truckload (LTL) Business | Q1 noted rapid order volume growth and low online penetration potential ; Q2 reported 47% YoY growth and set record contributions ; Q3 mentioned LTL as a key contributor to improved fulfillment rates. | Q4 emphasized rapid growth with operational improvements, expanded routes, and strong adoption by SMEs. | Consistent, robust growth with operational enhancements positioning it as a key future driver. |
Impact of Commission Rate Adjustments on Trucker Engagement | Q1 detailed refined commission rules that boosted monetization and trucker engagement ; Q2 noted negative impacts from rate hikes, mitigated via premium cargo bidding and improved matching ; Q3 demonstrated improved trucker incentives and higher commission per order. | Q4 referenced ongoing dynamic fine-tuning of commission metrics without highlighting major issues, implying stabilization of engagement. | Adjustments have evolved from initial challenges to more effective strategies that support stable trucker engagement. |
Increased Sales and Marketing Expenses for User Acquisition | Q1 reported RMB 340.1M compared to RMB 245.7M in prior year ; Q2 had RMB 372.3M vs. RMB 281.8M ; Q3 saw spending rise to RMB 412.5M from RMB 290.8M. | Q4 recorded sales and marketing expenses of RMB 471.8M, continuing the upward trend in acquisition spending. | Consistently increasing expenditure reflecting a persistent focus on aggressive user acquisition. |
Saturation in the 1688 Member Shipper Segment | Q3 explicitly mentioned that the 1688 member segment had nearly reached saturation with flat membership growth. | Q4 did not mention the 1688 segment, shifting focus instead to new membership models such as the 288-tier Mini Membership. | Earlier concerns about saturation have been de-emphasized, indicating a strategic shift toward alternative segments. |
Capital Allocation and Investment Decisions (Failed E-Commerce Investment and Impairment Loss) | Q1 through Q3 did not mention any issues in this area. | Q4 introduced a RMB 350M impairment loss from a failed e-commerce investment, marking a new cautionary note on capital allocation. | A new negative development that signals a more cautious approach to investments going forward. |
Macroeconomic Challenges and Extreme Weather Impacts | Q2 highlighted both macroeconomic challenges and extreme weather (prolonged rains, flooding, drought) affecting demand ; other periods either did not mention or minimized these factors. | Q4 did not mention macroeconomic or extreme weather issues, suggesting less emphasis or improved conditions in the discussion. | Reduced emphasis in Q4 suggests either an improved external environment or a strategic decision to focus on internal drivers. |
Adjusted Operating Profit Guidance for 2025 | No mention in Q1–Q3 earnings calls. | Q4 introduced guidance with confidence in over 60% YoY growth in adjusted operating profit for 2025. | A new forward-looking bullish projection that signals management’s confidence in future profitability. |
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Growth Strategy
Q: What is the overall development strategy for this year?
A: The company expects to maintain steady business growth in 2025, with order volume growth of at least 15% year-over-year. They aim to optimize the revenue structure by reducing the proportion of the freight brokerage business to ensure sustainable development and effectively manage risk. The transaction service business will become the core engine of revenue growth, and they are confident in achieving over 60% year-over-year growth in adjusted operating profit for 2025.
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Impairment Loss
Q: What caused the RMB 350 million impairment loss in Q4?
A: The impairment loss stemmed from an investment in an e-commerce platform focused on tire sales and aftermarket auto parts, which has been facing ongoing operating losses. As recovery is unlikely, a full impairment provision of RMB 350 million was made in Q4. This was a one-off event, and no other impairments are anticipated in the foreseeable future.
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Order Volume Growth
Q: What drove the strong order volume growth in Q4?
A: Robust new user acquisitions and effective operational strategies led to strong order volume growth. Shipper MAUs surpassed 3 million in December, with average shipper MAUs growing over 30% year-over-year in 2024. The company remains confident in expanding the shipper user base at a healthy pace.
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Fulfillment Rate Increase
Q: What were the drivers behind the fulfillment rate improvement?
A: The fulfillment rate reached 37.5% in Q4, up 5.4% year-over-year and 3% sequentially, due to continuous user mix improvement, precision operation strategies, and improved supply and demand dynamics. The contribution from direct shippers reached 50%, enhancing fulfillment rates. The company expects the fulfillment rate to continue its upward trend.
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Shipper Membership Growth
Q: How did shipper membership progress in Q4?
A: Active shipper members surpassed 1.5 million in Q4, driven by the optimized membership tiering system and targeted subsidies. The introduction of the 288-Tier Mini membership attracted small and medium-sized direct shippers, contributing most new shipper members. The company is confident in further expanding its paying member base.
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LTL Business Performance
Q: How did the LTL business perform in Q4?
A: The Less-Than-Truckload (LTL) business maintained rapid growth, driven by deeper penetration into offline markets and optimization of carpooling features. By offering a streamlined carpooling model that reduces cargo damage risk, the company attracted small and medium-sized direct shippers. They plan to expand route operations and strengthen their position in the LTL market.
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Freight Brokerage Revenue
Q: What drove the freight brokerage revenue growth in Q4?
A: Freight brokerage revenue grew by 70% year-over-year, primarily due to an increase in service fee rates from about 6% to 7% in October 2024. This adjustment offset the decline in transaction volume. The company plans to prudently manage this business, focusing on serving high-value shippers while monitoring tax rebate policies.