Logistics Firm Best Inc. Shows Net Loss Narrowed; Shares Decline 5%
Alibaba-backed Chinese supply chain servicer posted a loss of $14.2 million for the second quarter, sending its stock down 5 percent Wednesday.
The stock of Best Inc. (NYSE: BSTI) fell more than 5 percent in trading Wednesday after the company, an Alibaba-backed Chinese supply chain servicer, posted a loss of $14.2 million for the second quarter.
Shares of the Hangzhou-based firm closed at $8.81 per American depositary share, down 50 cents, despite the company's diminished net loss and increased sales reported for the second three months compared with the same period of 2017.
Shares of Best fell more than 5 percent Wednesday to $8.81 per ADS
after the logistics company posted its second-quarter results.
Net loss in the first quarter was nearly 54 percent lower year-over-year, while revenue increased 39 percent to $1 billion, thanks to strong growth across all segments of Best's business. Earnings per share for the quarter were 4 cents.
"Our revenue growth continues to outpace industry peers and we achieved positive EBITDA for the first time this quarter," ex-Googler Johnny Chou, chairman, founder, and chief executive officer of Best, said in a statement Wednesday. The company reported its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was US$6.3 million, improved from a negative $20.3 million a year ago.
"We continue to benefit from healthy growth in the Chinese e-commerce industry and the growing sophistication of our customers," Chou added. "The deeper penetration of New Retail has made our integrated supply chain and logistics solutions more essential than ever."
Best reported that its parcel volume has increased 40 percent year-over-year, higher than the average growth rate of 25 percent in China's market. Gross profit per parcel grew to 3 cents, a 47 percent improvement from a year ago. The company also said its focus on service quality has placed it among companies with the lowest number of complaints, as reported by China's State Post Bureau.
The company faces stiff competition from Chinese logistics firms such as S.F. Holding, YTO Express, and STO Express, all of which recently went public in China, the world's biggest logistics market. Best trades its shares on the New York Stock Exchange since September 2017.
Chinese e-commerce giant Alibaba Group Holding Ltd. (NYSE: BABA) holds a 23 percent stake in Best.
For the third quarter, the company said it expects revenue to be in the range of between 7 billion yuan and 7.2 billion yuan. For the full year, Best is expecting revenue in the range of 26.6 billion yuan to 27 billion yuan.