Best Inc. to Sell Courier Division to Help Reduce Debt
Bloomberg reported Thursday that Best Inc. plans to raise funds and reduce debts by selling a courier subsidiary. The company is negotiating with a financial adviser on a possible divestment and may seek to value the business at up to $1 billion, a source said. Best declined to comment on the matter.
Established in 2007, Best is a leading integrated smart supply chain solutions and logistics services provider in China, whose business sectors cover express delivery, goods delivery, warehouse distribution supply chain management, as well as international and cross-border e-commerce logistics.
In November last year, the firm announced strategic adjustment and organizational change of its business: To concentrate resources in its main business, including express delivery and supply chain; to improve operational efficiency and organizational flexibility; and, to strengthen the core competitiveness of its main business. This is how the company has tried to respond to market changes and enhance its profitability.
Earlier, it was reported that Best sought to list its express delivery and goods delivery business in Hong Kong. In this April, Zhou Shaoning, Chairman and CEO of Best, publicly revealed that Best Express is in the financing stage and will complete its listing as early as 2022.
In February, it was reported that some outlets of Best Express were closed, and it had been a while since delivery was unavailable. In response, Best responded that the company is operating normally, and the suspension was because of the optimization and adjustment of outlets managed by individuals.
In the second quarter of 2021, Best’s revenue decreased by 5% year-on-year to 7.375 billion yuan ($1.142 billion). Also in Q2, it’s net loss totalled 466 million yuan. As one of the four major businesses of the Best, Best Express contributed more than half of the group’s revenue. However, as of the second quarter of this year, Best Express’ market share decreased to 8.38%, while the gross profit margin of its express delivery business decreased by 11%. The firm’s Q2 financial report attributes the main reason as “the average price of each package is lower by 18.0% year-on-year, partially offset by the average cost of package, which is lower by 8.5% year-on-year.”
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