New stock preview | Gross profit doubles, domestic business still in deficit, why is there a mix of joy and sorrow in Yanwen Logistics' IPO answer sheet?

With the continuous surge of Chinese cross-border e-commerce going global, as the "blood vessels" supporting global trade circulation, the cross-border logistics track is now attracting a new round of focus from the capital market. On May 25th, the Hong Kong Stock Exchange disclosed that Yanwen Logistics Co., Ltd., a leading domestic cross-border logistics company, officially submitted its listing application to the Hong Kong Stock Exchange. Shenwan Hongyuan Group Hong Kong will serve as the exclusive sponsor. This established player in the industry, which has been deeply involved in the industry for over 20 years and ranks second in market share among third-party B2C cross-border e-commerce logistics service providers in China, is attempting to inject new energy into its global strategy by going public. However, behind its impressive industry rankings, Yanwen Logistics' drastic performance fluctuations over the past three years and its high dependence on e-commerce platforms have cast a shadow of uncertainty over its IPO journey. Profit quality improvement and cash flow restructuring According to the prospectus, Yanwen Logistics' revenue scale experienced a significant contraction in 2024, followed by a partial recovery in 2025, but it has not yet returned to the levels of 2023. This revenue trajectory itself implies fluctuations in external market demand or internal business restructuring. Despite a 14.8% increase in revenue to 6.687 billion RMB in 2025 from 2024, it is still approximately 29.5% lower than the 9.483 billion RMB level in 2023, indicating that the company has not fully regained lost market share or business volume. However, the profit side shows a more positive signal: gross profit steadily increased from 344 million RMB in 2023 to 462 million RMB in 2025, while the gross profit margin rose from 3.63% to 6.91% over the same period, almost doubling. This improvement indicates that the company, despite temporary revenue pressure, may have enhanced its profitability per unit of income by optimizing its customer structure, adjusting service pricing, or improving operational efficiency. Furthermore, looking at the pre-tax profit, it leaped from 55.29 million RMB in 2023 to 153 million RMB in 2025, an increase of 177%, surpassing the gross profit increase. This gap reflects the significant achievements the company has made in controlling its operating expenses. In addition, the net operating cash flow was negative at 2.57 million RMB in 2023, but swiftly turned into a net inflow of 398 million RMB in 2024, further increasing to 516 million RMB in 2025. This strong performance in operating cash flow, far exceeding net profit during the same period, indicates that the company's net profit contains a large amount of non-cash expenses (such as depreciation and amortization, credit impairment provisions) or the significant improvement in working capital management - particularly changes in accounts receivable turnover impacting cash inflow. For a logistics company, this implies that Yanwen Logistics may be strengthening its management of client credit periods while extending the payment cycle to suppliers (such as long-haul transporters, end delivery providers), thereby gaining significant cash reserves. Overall, Yanwen Logistics has completed a financial "soft landing" and restart between 2023 and 2025. While the revenue scale has contracted, profitability (gross profit margin, pre-tax profit margin) has seen an increase, the operating cash flow has turned from negative to positive and significantly surpassed net profit, and cash reserves have steadily increased. The company clearly shifted from early-stage rapid growth or passive responses to market changes to a management model that places more emphasis on profit quality and cash flow discipline. From cross-border trunk lines to local networks Strategic transformation: can structural breakthroughs be successful? Observing Yanwen Logistics from 2023 to 2025 reveals significant features of strategic reshaping. According to the prospectus, the company's revenue structure underwent drastic adjustments: revenue from cross-border e-commerce express services dropped from 7.664 billion RMB in 2023 to 4.651 billion RMB in 2024, then rose to 5.737 billion RMB in 2025, accounting for 80.8%, 80.2%, and 85.8% of total revenue, respectively. This business fluctuation is highly related to the risk of customer concentration - in 2024, some large cross-border e-commerce platforms switched their logistics procurement model from centralized single supplier to segmented transport, directly leading to a sharp decrease in Yanwen Logistics' core business volume. It is noteworthy that the revenue share of the top five customers has decreased from 64.0% in 2023 to 18.0% in 2025, with the largest customer share shrinking from 51.9% to 8.4%. The diversification of the customer structure has to some extent reduced the impact of losing a single customer, but also reflects the company's relatively weakened bargaining power with top platforms. More strategically significant is the sudden rise of the local last-mile delivery service. Revenue from this business skyrocketed from 91 million RMB in 2024 to 387 million RMB in 2025, a 322% year-on-year increase, with its revenue share jumping from 1.6% to 5.8%. The logic behind this growth is that Yanwen Logistics launched the construction of a local delivery network in the U.S. in March 2024 and had established 10 regional sorting centers by the end of 2025, covering approximately 70% of the U.S. population across 41 states. This signifies the company's transformation from a simply cross-border trunk transportation provider to a comprehensive logistics service provider driven by both "cross-border + local". From a business model perspective, the expansion of local delivery services helps the company tap into the more profitable end segments of the cross-border e-commerce logistics value chain. In traditional cross-border direct mail models, the last-mile delivery costs typically account for 30% to 50% of the total logistics costs and are usually dominated by local logistics providers overseas. By establishing its own local network in the U.S., Yanwen Logistics is expected to internalize these profits. However, this business is currently still in a strategic loss-making phase: recording gross losses of 15.94 million RMB and 30.96 million RMB in 2024 and 2025 respectively, with gross loss rates of 17.5% and 8.0%. While the magnitude of losses is narrowing as revenue expands, the absolute value of losses is increasing with scale, indicating that economies of scale have not fully manifested, and the amortization of fixed costs (sorting centers, transportation fleets, personnel) will take more time. The continuous decline in revenue from other cross-border services is also worth noting. This business went from 1.819 billion RMB in 2023 to 565 million RMB in 2025, a decrease of about 69% over three years, with its revenue share sliding from 19.2% to 8.4%. Combined with the performance of gross profit margin (5.8% in 2023, 5.2% in 2024, -0.9% in 2025), this business has entered a state of gross loss. This may be the result of the company actively downsizing low-profit, non-core product lines, or it may be due to intensified market competition leading to market share loss. Regardless of the reason, the decline of this business has made the company's operations more concentrated on cross-border e-commerce express services, and its dependence on a single business has actually increased to some extent in 2025, posing another form of structural risk. Placing Yanwen Logistics' profit performance within the industry's coordinate system, the conclusion becomes more complex. The company's overall gross profit margin increased from 3.6% in 2023 to 6.9% in 2025, nearly doubling in three years, with the gross profit margin of its core business, cross-border e-commerce express services, jumping from 3.1% to 8.7%. This improvement is significant in the logistics industry. However, compared to similar companies in the same industry focusing on cross-border e-commerce logistics, their gross profit margins generally range from 15% to 30%. Yanwen Logistics' overall gross profit margin of 6.9% is only about one-third of the industry average. Of particular note is the net profit margin dimension: the company's net profit margin was 1.6% in 2025, while during the same period, Speed Rabbit Express achieved a net profit margin of 15.9% in the Southeast Asian market. The core reason for this significant difference lies in the inherent differences in business structure: Speed Rabbit has a complete local delivery network in Southeast Asia, enabling them to capture full-chain profits from collection to end delivery, while Yanwen Logistics' core business remains focused on cross-border trunk transportation, facing multiple pressures such as fluctuations in aviation fuel prices, inflexible procurement costs for transportation, and intense competition on international routes, naturally leading to thinner profit margins. In addition, according to Frost & Sullivan data, the Chinese B2C cross-border e-commerce logistics industry is highly fragmented, with the top five enterprises holding a combined market share of only 8.1% in 2025, with Yanwen Logistics ranking second with a 1.8% share, but the market leader's share is only 3.4%. The highly fragmented market structure indicates fierce price competition, making it difficult for companies to significantly increase pricing power through economies of scale, fundamentally suppressing the industry's overall profitability level. In conclusion, Yanwen Logistics is currently at a crucial stage in its transformation from a "cross-border trunk carrier" to a "cross-border + local comprehensive logistics service provider". The continued improvement of the core business's gross profit margin validates the effectiveness of cost control and customer structure optimization, the significant decrease in customer concentration reduces the risk of a single platform, and the rapid expansion of the U.S. local network demonstrates execution in strategic transformation. However, challenges are also evident: the overall profitability level is still significantly below the industry average, the local business remains in a state of loss, and as the scale expands, the absolute value of losses increases, indicating that economies of scale have not been fully demonstrated, and it will take more time for the amortization of fixed costs. The high dependency on third-party capacity resources (the top five suppliers' purchase amounts account for approximately 28%) means that variable costs make up a high proportion of the cost structure, and the elasticity of economies of scale is relatively limited. In the background of extremely low concentration in the cross-border e-commerce logistics industry and ongoing price competition, whether Yanwen Logistics can penetrate the more profitable end delivery blue ocean from the low-margin trunk transportation red ocean successfully through its "U.S. local delivery network" as a differentiating asset, when it can cross the breakeven point and achieve positive profit contribution, will be the key variable determining the company's valuation logic. Furthermore, the company's reliance on third-party capacity resources implies a high proportion of variable costs in the cost structure, which limits the elasticity of economies of scale release. In an industry with extremely low concentration in cross-border e-commerce logistics and ongoing price competition, whether Yanwen Logistics can use its "U.S. local delivery network" as a differentiating asset to break into the more profitable end delivery blue ocean from the low-margin trunk transportation red ocean is a critical issue in determining its valuation logic.