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The outbreak of the epidemic in 2020 has significantly affected the operation of supply chain service providers due to disruptions in work, business, and transportation capacity. According to statistics from the China Logistics Information Center of the China Federation of Logistics and Purchasing, nearly half of the enterprises are expecting profit declines by more than 30% on a year-on-year basis in the first quarter of 2020. Nearly 60% of the enterprises pointed out that the first quarter inventory would decline, and the inventory turnover would also decrease significantly year-on-year.
IT logistics recorded a 62% surge in contract awards, despite a sluggish market
IT Logistics (“ITL”), a subsidiary of Digital China Holdings Limited (“DC Holdings”, stock code: 00861.HK) is bucking the trend. With its leading technologies and excellent operation & maintenance capabilities, ITL continuously helps fulfil the customers’ delivery needs and protects their interests to the greatest extent, which is greatly recognised by the customers. A sharp jump in online shopping demand during the epidemic has led to high value contract awards by new customers, while the business volume of the existing customers has also increased significantly. The new customers cover industries including FMCG, online education, medicine, etc. At the same time, new business breakthroughs have been made in Cainiao’s overseas business and the Singapore-Malaysia core businesses. As of now, the contract amount of ITL in the first quarter of 2020 has increased by 62% compared with the same period last year.
Substantial investment in technologies is driving operational efficiency and earning growth
ITL’s outstanding performance is the result of its core strategy of “Supply Chain + Big Data +Artificial Intelligence Internet of Things (AIoT)”. The synergy and efficiency between the supply chain’s upstream and downstream is improved through the sustained investments in research and development and continuous development of logistics management software, in combination of the “Software Internet” products of DC Holdings. Riding on the intelligent services based on big data products “KingKoo Data”, the artificial intelligence solutions “Human+Robot” series at execution level, and new IoT product “Jieyun Bao”(捷运宝) and “Jieyun Express”(捷云快签) , ITL provides customers with differentiated services and continues to improve the company’s service competitiveness. By establishing a leading edge in science and technology with independent innovations, the company can provide customers with end-to-end one-stop intelligent supply chain services by internally building a customer-centric operation model, and responding to the market quickly and efficiently.
On February 24, 2020, DC Holdings made an positive profit alert announcement that the company expected to record a substantial year-on-year growth of more than 50% in profit attributable to equity holders of the Company, with the profit exceeding HK$230 million for the year ended 31 December 2019. The Board considered that the expected significant increase in profit of the Group was mainly due to the sustained growth and the continuous improvement in the operational efficiency of the Group’s different business segments. Many analysts expected that the rapid development of the smart industry chain sector would be key to the overall profit growth of DC Holdings.