Oversold rebound, GoGoX surges by 91.5%.
After its stock price plummeted into confusion, GoGoX (02246.HK) became the most dazzling "darling" of the Hong Kong stock market on May 3rd.
On May 3rd, GoGoX's stock price suddenly staged a significant rebound with a surge in volume, soaring by more than 120% at one point in the afternoon, and eventually closing up by 91.55%, making it the champion of the day's stock market gain list in Hong Kong.
At the end of last month, GoGoX's stock price continued to plummet to a historical low, with the lowest reported price at 0.24 Hong Kong dollars, and its market value was left with a meager 150 million Hong Kong dollars, almost completely evaporating from its peak of over 14.5 billion Hong Kong dollars, which is nothing short of regrettable.
In terms of news, there have been no significant positive developments for GoGoX that could have stimulated the stock price recently. The reasons for this sudden surge in GoGoX's stock price are a matter of much debate in the market.
Some netizens speculated, "Has GoGoX entered the field of autonomous driving?" Others remarked, "From 23 dollars to 20 cents, there's little resistance to a surge; this is the charm of a rebound from an oversold situation." Market insiders have indicated that as the Hong Kong stock market is bullish, companies with low market capitalization are garnering attention from capital, increasing the likelihood of being hyped.
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In the fiercely competitive and hotly contested field of intra-city freight, looking back at the performance reports GoGoX has submitted to the market in recent years, as well as changes in shareholder holdings and management shifts within the company, the current state of GoGoX is a cause for deep concern among investors.
Left far behind by Huolala, with a continuous two-year decline in order volume, GoGoX, originally known as "58 Suyun," is a freight platform under the 58 Group, primarily offering intra-city freight services such as cargo transportation, moving, and delivery for corporate and individual users.According to the prospectus disclosed by Lalamove last month, in terms of closed-loop freight GTV (Gross Transaction Value) in the first half of 2023, Kuaidi Dache (Gogovan) ranks only fourth in China's logistics trading platform, with a market share of 1.9%. The "super one" is the industry's flagship enterprise, Lalamove, with a market share as high as 61%.
In 2023, against the backdrop of increased market demand, the domestic same-city freight market achieved steady growth. Lalamove seized this opportunity to successfully expand its market, with significant increases in active users, active drivers, and global order volume in 2023. The GTV increased by 28.8% year-on-year to $9.414 billion, driving a 28.8% increase in revenue to $1.334 billion.
Not only did Kuaidi Dache not benefit from the market growth dividend, but it also fell behind in the competition.
Although the number of registered consignors and drivers has been increasing year by year in recent years, consignors seem to be losing interest in Kuaidi Dache.
As shown in the chart above, Kuaidi Dache's consignment order growth has been weak in recent years, and it has fallen for two consecutive years in 2022 and 2023, with GTV falling for four consecutive years. Compared with Lalamove's strong operational data, Kuaidi Dache appears quite lonely, reflecting a decline in the latter's competitiveness.
This is also reflected at the operational performance level. In 2023, Kuaidi Dache faced the dilemma of declining revenue and continued to incur huge losses. The revenue in that year decreased by 2.6% to 753 million yuan, and although the annual loss narrowed, it still recorded a huge loss of 1.101 billion yuan, with a cumulative loss of more than 5 billion yuan from 2018 to 2023.
On the other hand, Lalamove showed a strong growth trend, with a revenue growth rate of nearly 30% in 2023, and turned from loss to profit, recording a net profit of $970 million, with an adjusted net profit of $390 million. That year, Lalamove's revenue scale was about 12 times that of Kuaidi Dache, and the latter was significantly outpaced by the former.
Caught in the dilemma of shareholder reduction and management turmoil
While the operational performance is unbearable to look at, Kuaidi Dache has also encountered troubles in other aspects. On the one hand, it has been continuously reduced by the major shareholder Alibaba (09988.HK) (BABA.US), and on the other hand, the management has experienced a major earthquake.
Wind data shows that since September 2022, Alibaba has reduced its stake in Kuaidi Dache 9 times, involving a total of about 13.89 million Hong Kong dollars. After the last reduction at the beginning of this year, Alibaba's stake in Kuaidi Dache has been reduced to 4.88%, while the holding ratio on September 15, 2022, was 13.99%.Regarding the reasons for Alibaba's multiple divestments from Kuaidi Dache, some industry insiders have suggested that Alibaba may lack confidence in Kuaidi Dache. Specifically, Alibaba's divestment from Kuaidi Dache is likely based on concerns about the latter's own development prospects, coupled with Alibaba's current strategic adjustments, which will focus more on promising investment businesses, and it is expected to accelerate the pace of divestment.
It is not hard to imagine that as the second-largest shareholder of Kuaidi Dache, Alibaba's frequent divestments of Kuaidi Dache shares will undoubtedly hit investor confidence and exacerbate the decline in Kuaidi Dache's stock price.
Another major factor leading to the collapse of Kuaidi Dache's stock price may be related to the instability of the company's management and board members.
Data shows that since 2022, Kuaidi Dache has seen a total of eight board members and executives resign, including Chairman and Executive Director Chen Xiaohua, who resigned at the end of last year, and Executive Director and Chief Financial Officer Hu Gang. The "major earthquake" among the board and executives will inevitably pose significant challenges to Kuaidi Dache's management and decision-making.
However, some logistics industry insiders believe that the changes at the top, such as the chairman, are a "self-help" action by Kuaidi Dache, as the competitive landscape of the same-city freight race has changed, and Kuaidi Dache still needs significant adjustments to turn the situation around.
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