[中报]顺丰控股:2021年半年度报告（英文版）
原标题:顺丰控股:2021年半年度报告（英文版） E:\D盘文件\38-信息披露\1-定期报告\2021半年报\半年报\报告制作\设计稿\定稿\20210817 半年报交付\封面封底\封面-完稿-EN.jpg S.F. Holding Co., Ltd. 2021 Semi- Annual Report August 2021 Chapter 1 Important Information, Table of Contents, and Definitions The Company’s Board of Directors, Supervisory Committee, directors, supervisors, and senior management hereby guarantee that the contents of the Semi- Annual Report are true, accurate, and complete, and that there are no misrepresentations, misleading statements, or material omissions, and shall assume individual and joint legal liabilities. Wang Wei, the Company’s responsible person, Chen Fei, the person in charge of accounting work, and Hu Xiaofei, the person in charge of the accounting department (accounting officer), hereby declare and warrant that the financial report within the Semi- Annual Report is true, accurate, and complete. All directors have attended the Board meeting approving the Semi- Annual Report. The Company is required to comply with the disclosure requirements presented in the Shenzhen Stock Exchange for Industrial Information Disclosure No.9 – Listed Companies Engaged in the Express Delivery Services Business. In this Semi- Annual Report, the Company details the possible risk factors and countermeasures that may occur in the future. For more information, refer to “Section X. Possible Risks and Countermeasures” in “Chapter 3. Management Discussion and Analysis.” Investors shall refer to this information. The Company does not plan to issue cash or equity dividends, nor to convert equity reserve into share capital of the Company. Table of Contents Chapter 1 Important Information, Table of Contents, and Definitions ................................ ........ 2 Chapter 2 Company Profile and Key Financial Indicators ................................ ........................... 7 Chapter 3 Management Discussion and Analysis ................................ ................................ ......... 10 Chapter 4. Corporate Governance ................................ ................................ ................................ . 79 Chapter 5. Environmental and Social Responsibilities ................................ ................................ 69 Chapter 6. Significant Events ................................ ................................ ................................ ......... 72 Chapter 7 Share Changes & Shareholder Details I. Changes in Shares ................................ ... 121 Chapter 8 Preferred Shares ................................ ................................ ................................ .......... 125 Chapter 9 Bonds ................................ ................................ ................................ ............................. 126 Chapter 10 Financial Statements ................................ ................................ ................................ .. 127 List of Documents Available for Inspection (1) Financial statements signed and sealed by the legal representative, the person in charge of finance and the person in charge of the accounting department of the Company. (2) The original copies of all documents and announcements of the Company which have been publicly disclosed in newspapers designated by the China Securities Regulatory Commission during the reporting period. (3) The original text of the 2021 Semi-Annual report signed by the chairman of the Board of Directors. (4) The place where the above documents are maintained: the office of the Company’s Board of Directors. Definitions Term Description Reporting period January 1, 2021 to June 30, 2021 The same period of previous year January 1, 2020 to June 30, 2020 The Company, The listed Company, SF Holding, SF S.F. Holding Co., Ltd. RMB Renminbi yuan Mingde Holding Shenzhen Mingde Holding Development Co., Ltd., the controlling shareholder of S.F. Holding Co., Ltd. Taisen Holding Shenzhen S.F. Taisen Holding (Group) Co., Ltd., a wholly- owned subsidiary of S.F. Holding Co., Ltd. Hive Box Technology Shenzhen Hive Box Technology Co., Ltd., a commonly controlled entity of S.F. Holding Co., Ltd. SF Intra- city, Intra- city Industrial Hangzhou SF Intra- city Industrial Co., Ltd. is a subsidiary of S.F. Holdings Co., Ltd. CSRC China Securities Regulatory Commission HK Stock Exchange The Stock Exchange of Hong Kong Limited HK SFC The Securities and Futures Commission of Hong Kong Kerry Logistics Kerry Logistics Network Limited,a company listed on the Main Board of The Stock Exchange of Hong Kong Limite. Stock abbreviation: Kerry Logistics; Stock code: 00636.HK SF REIT SF Real Estate Investment Trust,a joint venture of S.F. Holding Co., Ltd. The SF REIT has been listed on the Main Board of the HK Stock Exchange since May 17, 2021, with the stock code of “2191.HK” and the stock abbreviation of “SF REIT”. Chapter 2 Company Profile and Key Financial Indicators I. Company Profile Stock Abbreviation SF Holding Stock Code 002352 Listed Stock Exchange Shenzhen Stock Exchange Chinese Name of the Company 顺丰控股股份有限公司 Chinese Name Abbreviation of the Company 顺丰控股 English Name of the Company S.F. Holding Co., Ltd. English Name Abbreviation of the Company SF Holding Legal Representative of the Company Wang Wei II. Contacts and Contact Methods Board Secretary Securities Affairs Representative Name Ling Gan Jing Zeng Address Block B,TK Chuangzhi Tiandi Building, Keji South 1st Road, Nanshan District, Shenzhen, Guangdong Province, P.R.China Block B,TK Chuangzhi Tiandi Building, Keji South 1st Road, Nanshan District, Shenzhen, Guangdong Province, P.R.China Tel No. 0755- 36395338 0755- 36395338 Fax 0755- 36646688 0755- 36646688 sfir@sf- express.com sfir@sf- express.com III. Other Information 1. Corporate Contact Information Were there any changes to the Company’s registered address, office address or postal code, company website, or to the email address during the reporting period? □ Yes √No There were no changes to the Company’s registered address, office address or postal code, company website and the email address during the reporting period. Refer to the Company’s 2020 Annual report for details. 2. Information Disclosure and Location of Report Were there any changes to information disclosure and location during the reporting period? □ Yes √No There were no changes to the name of the newspaper designated for information disclosure, to the address of website designated by the China Securities Regulatory Commission for semi- annual report publication, nor to the storage location of company’s Semi- Annual report during the reporting period. Refer to the Company’s 2020 Annual report for details. 3. Other Relevant Information Were there any changes to other relevant information during the reporting period? □ Yes √No IV. Key Accounting Information and Financial Indicators Does the Company need to adjust its financial information retrospectively or restate its previous year accounting information? □Yes √No Current reporting period The same period of previous year Increase/Decrease over the same period of previous year Revenue (RMB) 88,343,929,823.78 71,129,007,738.21 24.20% Net profit attributable to shareholders of the parent company (RMB) 759,921,074.24 3,761,593,296.43 - 79.80% Net profit after deducting non- recurring profit or loss attributable to shareholders of the parent company (RMB) - 477,088,774.82 3,444,761,400.75 - 113.85% Net cash flow from operating activities (RMB) 4,331,632,843.16 6,931,712,320.10 - 37.51% Basic earnings per share (RMB/share) 0.17 0.85 - 80.00% Diluted earnings per share (RMB/share) 0.17 0.85 - 80.00% Weighted average return on net assets 1.34% 8.51% A decrease of 7.17 percentage points End of the current reporting period End of previous year Increase/Decrease over previous year end Total assets (RMB) 133,393,058,169.57 111,160,042,260.97 20.00% Total equity attributable to shareholders of the parent company (RMB) 56,681,222,769.04 56,443,050,238.39 0.42% V Differences Arising from Chinese and the International Accounting Standards 1. Differences between net profits and net assets disclosed in the financial reports in accordance with international accounting standards and Chinese accounting standards □Applicable √Not applicable There is no difference between the net profits and net assets disclosed in financial reports in accordance with international accounting standards and those disclosed in accordance with Chinese accounting standards in the reporting period. 2. Differences between net profit and net assets disclosed in the financial reports in accordance with overseas accounting standards and Chinese accounting standards □Applicable √Not applicable There is no difference between the net profits and net assets disclosed in the financial reports in accordance with overseas accounting standards and those disclosed in accordance with Chinese accounting standards in the reporting period. VI Non-Recurring Profit or Loss √Applicable □Not applicable Unit: RMB Item Amount Note Investment income from disposal of subsidiaries 942,964,204.15 It mainly represents gains from disposal of subsidiaries to SF REIT, for details, please refer to Note 5(2) of Chapter 10 Financial Statements. Gains or losses on disposals of non- current assets (including offsetting amount for the provision of impairment of assets) - 6,632,153.94 Government grants recognized in profit or loss for the current period (excluding government grants that are closely related to the Company’s business operations, with fixed quotas or amounts in accordance with national uniform standards) 383,344,061.72 It mainly represents fiscal approportion, transportation capacity subsidies, tax refunds and employment stabilization subsidies, etc. Gains generated where investment costs of acquisition of subsidiaries, associates and joint ventures by the Company are less than the Company’s share of the fair value of the investee's identifiable net assets 2,375,341.81 Gains or losses from changes in fair value of financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment gains or losses arising from the disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments, excluding hedging activities related to the normal business operations of the Company 21,622,194.25 Reversal of provision for impairment of receivables and contract assets that have been assessed for impairment individually 18,564,776.44 Net amount of other non- operating income and expenses - 23,918,665.39 Less: Income tax effect 94,158,037.89 Profit or loss attributable to minority shareholders (after tax) 7,151,872.09 Total 1,237,009,849.06 -- Provide explanations for classifying non- recurring profit or loss items defined in the Explanatory Announcement No. 1 for Public Company Information Disclosures – Non- recurring profit or loss, and for classifying non- recurring profit or loss items listed in the Explanatory Announcement No. 1 for Public Company Information Disclosures – Non- recurring profit or loss as recurring profit or loss items. □Applicable √Not applicable The Company has not classified non- recurring profit or loss items defined or listed in the Explanatory Announcement No. 1 for Public Company Information Disclosures – Non- recurring profit or loss as recurring profit or loss items in the reporting period. Chapter 3 Management Discussion and Analysis I. Primary business of the Company during the reporting period Is the Company required to comply with disclosure requirement of a particular industry? Yes Express Delivery Service Industry (I) Industry development 1. China logistics industry has large market size and broad market space, the potential for consolidation is vast Despite of COVID-19’s continious uncertainties on the global economy, China has entered a “new normal” for pandemic prevention control and economy recovered robustly. Driven by the steady growth of industrial logistics in China, growing import and export momentum and the continuously rapid development of new drivers related to people’s livelihood and consumption, the prosperity index of logistics industry in China was in a relatively high range. From 2010 to 2020, the total social logistics expenditure in China increased from RMB7.1 trillion to RMB14.9 trillion, with a compound annual growth rate of 7.7%, In 2020, the total social logistics expenditure accounted for 14.7% of GDP. Among them, the express delivery service industry was a key segment of the gigantic logistics market. According to the data from the State Post Bureau, from 2010 to 2020, the business volume and income from the express delivery service industry increased by 36.3 times and 15.3 times respectively, with shipments delivered totalling 49.39 billion in the first half of 2021, representing a year-on-year increase of 45.8%, the business income totalling RMB 484.21 billion, representing a year-on-year increase of 26.6%, and the average daily handling volume exceeding 300 million in June this year. China’s express delivery market has been the world’s largest for many years, maintaining robust growth momentum. E:\D盘文件\38-信息披露\1-定期报告\2021半年报\半年报\报告制作\设计稿\定稿\20210817 半年报交付\英文图表\页眉页脚 表格图表-英-01.jpg Despite of the broad logistics market in China, the market of the logistics industry in China is still very fragmented compared with that in developed countries. According to the data released by the China Federation of Logistics and Purchasing in November 2020, the total revenue from logistics business of the comprehensively top 50 logistics companies in 2019 was RMB1.1 trillion, but accounted only for 10.7% of China’s total revenue from logistics business of RMB10.3 trillion in 2019, with a low degree of concentration and huge space for future integration. Along with the rapid growth of the express service industry in China in recent years, express service enterprises diverged in terms of business volume, market share, business model and profitability and etc. Leading express enterprises built up cost advantage with scale effect and further expanded their market share, resulting in the gradual withdrawl of certain small and medium sized express enterprises and making the market more concentrated. Data from the State Post Bureau shows that the brand concentration index, CR8, came in at 80.8 in the first half of 2021. Meanwhile, leading express enterprises kept optimizing their services, explored diversified business and built new business lines, such as freight, cold chain and supply chain leveraging on talent, technology and capital, in a bid to expand their network coverage both at home and abroad and build end- to- end integrated logistics service capabilities. Besides, they seek to enhance operation efficiency with technology and developed the “scattered, chaotic and poor” logistics industry in a scaled, standardized and efficient manner. With the continuous development of logistics industry, upgrading information technology brought new technologies for logistics and new business forms sprung up, coupled with the upgrading supply chain, leading an increasingly concentrated logistics industry and making the market divided by several leading large- scale professional logistics companies. 2. The trend of empowering different industries to build digital, intelligent, efficient and flexible supply chains through technology advancement is providing new opportunities for logistics companies In recent years, big data, cloud computing, artificial intelligence and other technologies have been widely practiced in logistics scenarios. Through the extensive application of RFID, sensors, GPS, cloud computing and other information technologies in logistics transportation, warehousing, packaging, loading and unloading, and distribution processing , distribution, information service and other links, the intelligentization, automation and visualization of the logistics system have been realized, which greatly improves the logistics efficiency. The proportion of total social logistics costs to GDP is generally used to measure the level of social logistics costs and modernization. The lower the proportion, the higher the overall social logistics efficiency and the higher the modernization level of the logistics industry. From 2010 to 2020, the proportion of total social logistics costs to GDP in China dropped from 17.8% to 14.7%, a decrease of 3.1 percentage points. The reason is that on the one hand, the logistics industry has moved from low concentration and decentralized competition to intensification and scale by giving full play to the effect of large-scale operation; on the other hand, the improvement of logistics technology and intelligent level has shortend the logistics operation time and labor intensity, improved the overall transport quality and efficiency, and the logistics industry has achieved remarkable results in cost reduction and efficiency enhancement. However, this proportion is still at a relatively high level compared with 6%~8% in developed countries in Europe and the United States, and there is still much room for improvement in the overall operational efficiency of China's logistics industry. On March 16, 2021, 13 departments including the National Development and Reform Commission jointly issued the "Opinions on Accelerating the Promotion of High-Quality Development of Manufacturing Services (《关于加快推动制造服务业高质量发展 的意见》)" (Fa Gai Chan Ye [2021] No. 372), which proposed the need to accelerate the upgrading of professional and comprehensive service capabilities for manufacturing industry and improve the overall quality and level of the manufacturing industry chain; use 5G, big data, cloud computing, artificial intelligence, blockchain and other new-generation information technologies to vigorously develop intelligent manufacturing； develop a modern logistics service system, facilitate the integration and sharing of information resources; promote the real-time collection and interconnection of information in upstream and downstream links such as procurement, production and circulation, and improve the level of integrated operation of production, manufacturing and logistics; promote the application of perception technology in key nodes of the manufacturing supply chain; promote the intelligentization of supply chain system in key industries, and gradually realize the visualization of supply chain; with a focus on the construction of “One Belt and One Road”, encourage professional services such as supply chain management to go out in concert with manufacturing industry, and enhance the ability to allocate resources in the global service market, etc.. It can be seen that, at the critical stage of the gradual improvement of the new generation of information technology and infrastructure, the vigorous development of intelligent manufacturing and the promotion of industrial upgrading in China, the logistics industry in China is facing historic opportunities and key time windows to contribute to the promotion of manufacturing value chain, drive digital visualization of supply chain, build modern logistics service standards, and enhance the global influence and competitiveness of China's manufacturing supply chain. In particular, the epidemic has rapidly change the behavior of end consumers to online consumption, and the online penetration rate of commodities has continued to increase with new forms of online retail such as traditional e-commerce platforms, live streaming e-commerce, short video e-commerce and community group buying emerging in an endless stream, and under the background of the significant increase of customer acquisition cost on online platforms, brands are also paying more attention to private domain traffic. Therefore, the new business model with decentralized channel flow, fragmented orders and online and offline integration will put forward higher requirements for brand owners' ability to perceive and respond to market changes, be flexible and respond efficiently in the overall supply chain. How to achieve consumer insight, accurate marketing forecasting, omnichannel operation, demand-matching production, fast inventory turnover, and establish a DTC (Direct to Customer) flexible supply chain system with efficient response has become the key to win the market for brands. The entire supply chain, from commodity supply to reaching consumers, will be reshaped: the production- and channel-centric "push" model is evolving towards a consumer-centric "pull" model, and the planned, high-volume traditional logistics delivery model will shift to a more flexible and agile approach. In this process, third-party logistics enterprises deeply cooperate with brand owners and penetrate into every link of their supply chain services. With rich practical experience in logistics scenarios, combined with big data and algorithm technology, AIoT, and software and hardware system integration capabilities, they help brand owners build digital, visual and intelligent supply chain systems. The transformation of supply chain from the traditional cost center to the consumer-centric enterprise value creation will be a new opportunity for third-party logistics enterprises and customers to work together to achieve win-win results, upgrade their industries and services, and gain a broader market share in the future. 3. Under the guidance of government policies, express delivery industry is looking to move on from price war to a more orderly market, and shifting from homogeneous competition to providing comprehensive logistics services After many years of rapid development, China has grown into the world’s largest express delivery market by business volume. According to the data from the State Post Bureau, from 2010 to 2020, shipments delivered by Chinese express delivery companies increased to 83.36 billion from 2.34 billion, representing a CAGR of approximately 42.9%, and the business volume of express delivery is expected to reach 95.5 billion in 2021. During the 13th Five-Year Plan, China’s parcel delivery volume has surpassed that of the United States, Japan and Europe combined, and accounts for more than 50% of total global growth, making it the powerhouse and stabilizer for the international post industry. The Chinese express delivery industry is currently going through a transition from the growth stage toward the maturity phase, and the concentration of the market is increasing. E- commerce market remains the primary driving force of express industry growth, but there exists severe homogeneous competition among e- commerce delivery services – most e- commerce delivery businesses rely heavily on price competition to grow market share. Meanwhile, with the entry of new entrants supported by the capital markets, low- price strategy has become a main way to occupy the e- commerce delivery market share rapidly for new entrants. To this end, the original competitive landscape of e- commerce delivery industry was hit hard, and the price war among the e- commerce delivery industry was increasingly intensified. This has resulted in a consistent decline of the overall express delivery price per shipment in recent years – from RMB24.60 per shipment in 2010 to RMB10.55 per shipment in 2020. E:\D盘文件\38-信息披露\1-定期报告\2021半年报\半年报\报告制作\设计稿\定稿\20210817 半年报交付\英文图表\页眉页脚 表格图表-英-05.jpg In this year, regulatory authorities have promulgated a number of policies to rectify the chaos in express delivery industry. In Yiwu, Zhejiang, where has huge express shipments and fierce price competition, the regulatory authorities have issued caution letters to some express delivery companies, requiring them not to dump by reducing the price far below the cost, and related outlets have been requested to suspend their operation. On April 22, in the 70th executive meeting of the Government of Zhejiang Province, Zhejiang Express Delivery Industry Development Regulation (Draft) (《 浙江省快递业促进条例（草案） 》 ) was approved, which stipulates that express delivery operators shall not provide express delivery services at a price below the cost; e- commerce platform operators shall not use technologies and other means to impede the normal services provided by express delivery operators. On June 23, seven departments including the Ministry of Transport and the State Post Bureau jointly published the Opinions on the Protection of the Legal Rights and Interests of the Couriers (《 关于做好快递员群体合法权益保障工作的意见 》 ), which proposes specific measures against unfair market competition, differentiated regional delivery charges and other issues, and requires to ensure reasonable remuneration for couriers and fulfill the responsibilities of express delivery companies. The gradual improvement of relevant laws and regulations will facilitate the orderly operation and reasonable competition of the participants in express delivery market, and the industry will head into a stage of high- quality development. Meanwhile, with the increasing business scenarios diversity and supply chain complexity, customers will have increasing needs of the outsourcing service of overall supply chain management, and will be no longer satisfied with single delivery service of express delivery companies. In line with the diversification trend of customer needs, leading companies in the domestic express delivery industry also have started to actively expand diversified businesses to meet customers’ needs. In recent years, leading companies of express delivery industry have been committed to expanding new tracks to march into new fields and tried to integrate new business forms to offer services. With diversified first- mover advantage, leading companies in the industry established competitive advantage in comprehensive logistic service capability. It is expected that with the specialization and internationalization of the segregation of duties in the industry, one- stop comprehensive solution capabilities will be the core competitiveness of courier and logistics companies in the future. 4. Due to strong demand for cross-border logistics services, Chinese corporates need to cooperate with Chinese logistics players with international end-to-end supply chain services capabilities Thanks to effective pandemic prevention and control measures, China took the lead in resuming work and production under the global pandemic, highlighting its advantages in the complete manufacturing industry chain and boosting the import and export trade volumes. According to statistics released by the General Administration of Customs in July this year, total value of China exports and imports of goods in the first half of 2021 reached RMB18.07 trillion, representing a increase of 27.1% over the same period last year, of which exports reached RMB9.85 trillion, representing a increase of 28.1%. Meanwhile, the pandemic also accelerated the trend towards an online shift of global trade and consumption and promoted the rapid growth of cross-border e-commerce industry. According to data from the General Administration of Customs, in the first half of 2021, China's imports and exports from cross-border e-commerce companies developed with a good momentum, recording total value of RMB886.7 billion, representing a year-on-year increase of 28.6%. The General Administration of Customs and other government departments have also introduced a series of measures to deepen cross-border trade facilitation reform and optimize the business environment at ports. With the benefits from the industry and policies, China's import and export is expected to maintain good growth. With the booming cross-border trade and the continuous support of national policies such as“the Belt and Road” initiatives, Chinese brands also leveraged on the historic opportunity to expand overseas markets and promote brands internationalisation. However, they also faced risks of complex and volatile international environment and high uncertainties, which proposed great challenges to the safe and stable operation of the industry chain and supply chain.This prompted brand owners to re-examine the safety and reliability of their international supply chain layout, and the global industry chain will be restructured. Therefore, building the foundations for an independent and controllable express logistics and supply chain will be the key to assisting the globalisation of China`s industry chain, and the enhanced competitiveness and voice of brand owners will drive domestic cross-border logistics companies to expand their business with brands, so as to accelerate the globalization of China's logistics supply chain and bring enormous opportunities for the international supply chain business of China’s express logistics companies. In addition, with the increasing penetration rate of global online consumption and the rapid growth of cross-border e-commerce, cross-border logistics is shifted towards fragmented demand, increasing cargo volume and direct customer proportion and changing industry services from partial process to door-to-door full process. However, cross-border logistics still has common pain points at the current stage, such as slow timeframe, uncertain delivery time, various chain participants, opaque routing, low customs clearance efficiency and price fluctuations. The instability of fulfillment services affects consumers' shopping experience and limits the business expansion of cross-border e-commerce to some extent and increases the operational risks of enterprises. Therefore, brand owners are urgently seeking for the cross-border logistics service providers with stable and efficient end-to-end international supply chain solutions. In particular, with the shortage of logistics warehouse resources due to the pandemic, international express logistics service enterprises that have stable international cargo air resources as well as strong localized operation capabilities of custom clearance, overseas warehouses and landed distribution, and can provide efficient and agile one-stop fulfillment services will be more competitive. With the globalization of China’s manufacturing supply chain and the rapid development of cross-border e-commerce, comprehensive cross-border logistics service providers with strong international logistics network and core scarce resources will continue to gain market share and gradually develop into leading players. 5. Green (environmental- friendly) express services have evolved from conceptual ideas to actual implementation, and are expected to develop further alongside the green supply chain to create additional "green value" China at the United Nations (UN) General Assembly made it clear that "China will increase its nationally determined contributions, adopt more forceful policies and measures, strive to peak its carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060". Since the target was proposed, the intensity of carbon neutrality policies has increased significantly, with ministries and commissions following up with detailed policies. In January 2021, the State Post Bureau proposed to accelerate the green transformation of express packaging, and continuously improve the industry regulations, standards and policy system in line with the concept of green development. It was also proposed to vigorously implement the "2582" Project in 2021, among others, special treatment will be carried out for excessive packaging bags of heavy metals and certain substances. In March 2021, the Measure on Express Mail Package Management promulgated by the Ministry of Transport was formally implemented. The Measure specifies the unified management responsibility of delivery corporate headquarters, regulates that delivery enterprise shall strictly implement the package management system, purchase and use packing materials approved by the national regulations, prefer to adopt a reusable and easily recyclable packaging, optimize the express mail packaging, reduce the use of packaging and encourage delivery companies to recycle packaging. In July 2021, the "Fourteenth Five-year Plan for Circular Economy Development" was rolled out. By 2025, e-commerce express will basically realize non-secondary packaging, and the scale of recyclable express packaging applications will reach 10 million. It is foreseeable that we are moving forward to a sustainable future. The supply chain industry will definitely adapt to this huge change of green industry, realize carbon emission management and accelerate the low-carbon transformation of warehousing, packaging, transportation and delivery through scientific and technological means as well as advanced low-carbon technologies. We will also further extend the green value to the supply chain, reduce customer carbon emissions, help customers to create green value, and jointly step into the industry with science and technology, efficient, clean and green. (II) Primary business, products and its use, operating models etc. of the Company E:\D盘文件\38-信息披露\1-定期报告\2021半年报\半年报\报告制作\英文版\SF IR21 jpg file 1\2021年中报-产品体系--e.jpg SF Holding is the largest integrated logistics service provider in China, the fourth largest express enterprise worldwide in terms of market capitalization, and is committed to becoming a data and technology- driven company providing independent third party solutions. It empowers customers with leading technology and provides customers with smart and integrated supply chain solutions covering various industries and application scenarios. With a focus on the logistics ecosystem, the Company horizontally expands its diversified businesses while vertically deepens its product stratification, so as to meet the needs of different market segments, and cover the complete supply chain of customers. The main businesses and services provided include: Express delivery business, including high- quality door- to- door express delivery products that meet the rapid delivery needs of individual and corporate customers, and cost- effective economic express products that serve the majority of merchants in the e- commerce market, and provide professional integrated warehousing management and warehousing allocation services; Freight business, including door- to- door transportation and delivery services for large- size parcels, less- than- truck- load (“LTL”), and large- volume heavy cargo for the mid- to- high- end market, as well as economical freight services for the main market; Cold Chain and Pharmaceuticals business , including professional cold chain integrated services based on storage, sorting, packaging, trunk transportation, urban distribution, and door- to- door delivery with multi- temperature controlled storage for businesses in the fresh and frozen food industry, as well as the plarmaceutical logistics and transportation services that serve various market entities such as manufacturers, distribution companies, disease control centers, hospitals, pharmacies, and pharmaceutical e- commerce companies; Intra- city instant delivery business , including instant logistics and deliery services for brand customers and small and medium- sized businesses to provide catering takeaway, near- field e- commerce, local retail and other scenarios, as well as providing local life services of help taking, help sending, help buying, and help handling affairs for individual users; International business, including high- efficiency standard express to meet the needs of cross- border express delivery, cost- effective economic express to meet the needs of cross- border e- commerce, and integrated international supply chain services covering LTL and overseas warehouses that serve customers' international operations; Supply chain business, driven by technology and based on SF’s well- established logistics network and product matrix, it integrates the advanced supply chain management experience of SF DSC (formerly known as “SF DHL”) and New Havi, to provide customers with intelligent software and hardware system integration services that help them realize digital supply chain transformation, as well as a complete set of supply chain solutions for supply chain planning, layout optimization, operation execution and implementation. After years of development, by virtue of the Company’s high penetrating delivery network covering China and major countries and regions in the world, the Company has quickly extended to freight, cold chain, intra- city delivery, supply chain and other fields through internal incubation and merger and acquisition, so as to build a complete integrated comprehensive logistics service system. We can not only provide end- to- end quality logistics services, but also provide integrated supply chain solutions throughout the procurement, production, distribution, sales and aftersales for customers. Based on the diverse needs of different industries, customers and scenarios, SF Holding adheres to the “customer- centric, demand- driven and experience- based” product design philosophy that focuses on each industry’s unique characteristics, and starts from the application scenarios of customers to drill into their requirements for different use cases within the end- to- end whole process and other individual requirements of customers. Thus SF Holding is able to design suitable products, services and solutions for customers while creating differentiated competitive advantage, and such product design in turn drives internal resource allocation, optimizes the product mix and enables the development of the solution capability. In addition, SF Holding always attaches importance to research and development (R&D) of technology and adheres to the forward- looking layout. The Company has technology and practical application ability that stay ahead of peers in the cutting- edge fields such as artificial intelligence (AI), big data, robotics, Internet of Things (IoT), logistics map and blockchain. Relying on the diversified business development of the Company, its services have gradually penetrated into the end- to- end value chain parts of the whole process of manufacturing and commercial retail in all walks of life, therefore accumulating extensive logistics scenarios and massive data. In combination with the R&D and application of continuously innovative logistics technology, we realise the digitalized and efficient operation of the whole process within the Company, which assists to the growth of diversified businesses and provide customers with high quality and accurate delivery services. Moreover, with the continuous accumulation of extensive scientific and technological capabilities and experience, we conduct continuous iteration and upgrading to work out leading technology products and smart logistics solutions. With science and technology as the entry point, we work with industry customers to implement digital transformation of supply chain in addressing problems such as information silo, inventory fragmentation, response lag, prediction error, low efficiency and so on under the traditional supply chain mode, and truly realise real- time information collection, interconnection and online visibility of the whole supply chain. We carry out front- end procurement, production, inventory and sales under the accurate prediction of direct to customer (DTC), establish flexible supply chain systems capable of real- time response, flexible and efficient, which not only to helps our clients achieve cost reduction and benefit increase, but also promotes the transformation of customer supply chain from cost- based to value- based and becomes the key to core competitiveness. At present, the Company has exported scientific and technological services and overall supply chain solutions in FMCG, shoes and apparel, cosmetics, 3C, home furnishing, auto parts and other industries, which truly contributes to industrial upgrading and high- quality development. SF Holding is also a smart logistics operator with network scale advantages, boasting an operating model with strong （未完）  |