2019 Second Quarter Corporate Presentation...2019 Second Quarter Corporate Presentation August 13,...

2019 Second Quarter Corporate PresentationAugust 13, 2019

2

Disclaimer

This presentation has been prepared by BEST Inc. (the “Company”) solely for informational purposes and have not been independently verified. No representations or warranties, express or

implied, are made by the Company or any of its affiliates, directors, officers, employees, advisors, or representatives with respect to, and no reliance should be placed, on the accuracy, fairness

or completeness of the information presented or contained in these materials. None of the Company nor any of its affiliates, directors, officers, employees, advisers or representatives accepts

any responsibility or liability whatsoever for any loss howsoever arising from any information presented or contained in or derived from these materials. The information presented or contained

in these materials is as of the date hereof and is subject to change without notice and its accuracy, fairness or completeness is not guaranteed.

This presentation contains forward-looking statements. All statements, other than statements of historical facts, contained in this presentation, including, without limitation, statements

regarding our strategy and market opportunities, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-

looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and

similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are forward-looking

statements within the meaning of the U.S. securities laws. These forward-looking statements are made only, and are based on estimates and information available to the Company, as of the

date of this presentation, and are not guarantees of future performance. These forward-looking statements are based on a number of assumptions which are subject to known and unknown

risks, uncertainties and other factors that are beyond the Company’s control, such as the political, social, legal and economic environment in which the Company will operate in the future.

Accordingly, actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements and future results could materially differ

from historical performance. Further information regarding these and other risks is included in the Company’s filings with the SEC. The Company undertakes no obligation to update or revise

these forward-looking statements for events or circumstances that occur subsequent to the date of this presentation.

Nothing herein constitutes an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company in any jurisdiction or any inducement to enter into investment

activity, or may form the basis of or be relied on in connection with any contract or commitment whatsoever.

This presentation contains certain financial measures that are not recognized under generally accepted accounting principles in the United States (“GAAP”), such as “Non-GAAP Net Loss/Profit”

, “Non-GAAP Net Loss/Profit Margin”, “EBITDA”, “EBITDA Margin”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted Total Operating Expenses”, “Adjusted Selling Expenses”, “Adjusted

General and Administrative Expenses” and “Adjusted Research and Development Expenses”. Such non-GAAP financial measures have limitations as analytical tools. The presentation of such

non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. These non-GAAP

measures may differ from the non-GAAP information used by other companies and therefore their comparability may be limited.

2Q 2019 Results Review

2nd Quarter 2019 financial highlights

4

Strong revenue growth; solid gross profit, adjusted EBITDA, and non-GAAP net income improvement; compared with 2nd Quarter 2018:

Revenue was RMB8.8 billion, a YoY increase of 30.5%, revenue ex-Store+ was RMB8.0 billion, a YoY increase of 34.8%

– Revenue from Express was RMB5.4 billion, a YoY increase of 30.4%

– Revenue from Freight was RMB1.3 billion, a YoY increase of 26.8%

– Revenue from SCM was RMB598.7 million, a YoY increase of 20.1%

– Revenue from Store+ was RMB790.6 million, a YoY decrease of 1.0%

– Revenue from Others was RMB646.7 million, a YoY increase of 183.1%

Gross profit was RMB520.1 million, a YoY increase of 24.5%, gross profit margin was 5.9%, a YoY decrease of 0.3 percentage points; gross profit ex-

Store+ was RMB437.0 million, a YoY increase of 23.5%, gross profit margin ex-Store+ was 5.5%, a decrease by 0.5 percentage points YoY

Adjusted EBITDA was RMB148.2 million, representing a YoY improvement of RMB106.6 million, adjusted EBITDA margin was 1.7%, a YoY increase of

1.1 percentage points; adjusted EBITDA ex-Store+ was RMB247.2 million, adjusted EBITDA margin ex-Store+ was 3.1%

Non-GAAP net income was RMB6.5 million, representing a YoY improvement of RMB62.0 million; non-GAAP net income ex-Store+ was RMB107.0

million

Net cash generated from operating activities was RMB334.2 million; CAPEX was RMB380.9 million

Notes:

All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.

2nd Quarter 2019 business highlights

5

Continued the strong momentum from 1Q, focused on market share gain, investing in networks and services, accelerating technology adoption, improving

operating efficiency and productivity, and enhancing customer experience

Express parcels delivered reached 1.91 billion, a YoY increase of 49.0%, 1.72x market growth; market share increased to 12.2% from 10.5% YoY;

continued to reduce unit costs and expenses significantly, cost per parcel reduced by 11.6% YoY to RMB2.73, highlighted by reductions in

transportation and labor costs

Freight volume delivered reached 1.73 million tonnes, a YoY increase of 26.6%; gross margin improved by 1.2 percentage points YoY to 6.4%; continued

to expand last-mile coverage by adding 6,171 service stations YoY to 17,380 as of June 30, 2019

SCM number of orders fulfilled reached 86.7 million, a YoY increase of 41.7%; managed 370 Cloud OFCs, over 2.8 million square meters of warehouses

as of June 30, 2019, gross margin improved by 1.1 percentage points YoY to 8.7%

Store+ number of branded stores reached 3,106 as of June 30, 2019, a YoY increase of 315.2%; number of membership stores exceeded 438,000 as of

June 30, 2019, a YoY increase of 10.3%; gross margin improved by 2.5 percentage points YoY to 10.5%

UCargo number of transactions reached over 114,000, a YoY increase of 19.4%, revenue generated from external customers reached RMB521.8

million, accounting for 5.9% of the Company’s total revenue

Global continued to expand nationwide express and fulfilment operation in Thailand; readied to launch nationwide express operations in Vietnam

Capital provided cumulative total financing solutions to 9,465 trucks as of June 30, 2019, a YoY increase of 84.6%

Notes:


(375)(534) (532)

486

1,441

418520

(12.2%)

(10.2%)

(6.0%)

2.4%

5.2%

6.2% 5.9%

2014 2015 2016 2017 2018 2Q2018 2Q2019

Gross Profit/(Loss) Gross Profit/(Loss) Margin %

Strong top-line growth and profit improvement

6

6,7328,788

3,0665,256

8,844

19,990

27,961

2014 2015 2016 2017 2018 2Q2018 2Q2019

39.9%FY 2017 – FY 2018 YoY

73.8%2014-2018 Revenue CAGR

Notes:


1. Starting in 2017, the Company revised its arrangements with franchisees and the scope of its service. As a result, the Company became the principal that is directly responsible for last-mile delivery of all parcels and freight processed through its network, and the Company is liable to senders for damage to or loss of parcels and freight in connection

with last-mile delivery. Therefore, in consideration of such expanded scope of services and increased responsibilities, the Company included the last-mile delivery service fee in its revenue.

RevenueRMB mm

Gross Profit/(Loss)RMB mm

Strong track record of top-line growth across segments; in the second quarter revenue grew 30.5% YoY, gross profit grew 24.5% YoY, gross profit increased

by RMB102.4 million

24.5%2Q18 – 2Q19 YoY

196.8%FY 2017 – FY 2018 YoY

1 1

30.5%2Q18 – 2Q19 YoY

Strong volume growth, ongoing network optimization, and increased technology application drive lower costs and operating leverage; adjusted operating

expenses as a percentage of revenue improved by 1.0 percentage points YoY

7

Continuously improving operating leverage

349 554

868

1,470

1,992

493 551

11.4%

10.5%

9.8%

7.4% 7.1%

7.3%

6.3%

2014 2015 2016 2017 2018 2Q2018 2Q2019

% of Revenue

Cost of RevenueRMB mm

Adjusted Operating Expenses1

RMB mm

3,440 5,791

9,377

19,504

26,520

6,315 8,268

112.2%

110.2%

106.0%

97.6%

94.8%

93.8% 94.1%

2014 2015 2016 2017 2018 2Q2018 2Q2019

% of Revenue

Notes:


1. Adjusted operating expenses represent total operating expenses excluding SBC.

(718)

(1,059)

(1,363)

(923)

(452)

(56)

6

(23.4%) (20.2%)

(15.4%)

(4.6%)

(1.6%)

(0.8%)0.1%

2014 2015 2016 2017 2018 2Q2018 2Q2019

Non-GAAP Net Income/(Loss) Non-GAAP Net Income/(Loss) Margin

Profitability inflection point

8

Notes:


1. Before the completion of the Company’s IPO in September 2017, no SBC expense had been recognized. Upon completion of the I PO, the Company immediately recognized a substantial amount of SBC expense associated with vested share-based awards, especially in the third quarter of 2017.

2. Non-GAAP net loss represents net loss excluding SBC expense, amortization of intangible assets resulting from business acquis itions and fair value change of equity investments.

Adjusted EBITDA and Adjusted EBITDA MarginRMB mm

Non-GAAP Net Income/(Loss)2

RMB mm

2Q2019 recorded positive non-GAAP net income for the first time during a second quarter; adjusted EBITDA improved by 256% YoY while adjusted EBITDA

margin improved by 1.1 percentage points

1 1

(629)

(905)

(1,120)

(583)

(18) 42

148

(18.3%)

(17.2%)

(12.7%)

(2.9%)(0.1%)

0.6%

1.7%

2014 2015 2016 2017 2018 2Q2018 2Q2019

Adj. EBITDA Adj. EBITDA Margin

(329) (312)

(789)

26

637

432 334

2014 2015 2016 2017 2018 2Q2018 2Q2019

Operating CashflowsRMB mm

CAPEXRMB mm

212

398

628

750

1,078

230

381

6.9%

7.6% 7.1%

3.8%

3.9%

3.4%

4.3%

2014 2015 2016 2017 2018 2Q2018 2Q2019

% of Revenue

Improving cash flow generation with minimal capex spent

9

Asset-light model drives solid cash flow generation. CAPEX is expected to be within 3-4% of revenue annually; company invested RMB369.8 million in

automation in 2Q 2019.

Notes:




1

*Decrease in operating cash flow in 2Q was due to seasonal cash flow cycle which is offset over the six

month period. Net cash flow for the first six months in 2019 was RMB128.7 million compared to

negative RMB178.1 million for the same period in 2018, an improvement of RMB306.8 million.

*

10

RMBmm(Except for %)

GAAP to non-GAAP measures reconciliation

Notes:


1. In the second quarter of 2019, the Company recorded share-based compensation (“SBC”) expense of RMB25.7 million, of which approximately RMB0.3 million was allocated to cost of revenue, RMB1.8 million was allocated to selling expenses, RMB21.8 million was allocated to general and administrative expenses, and RMB2.4 million was

allocated to research and development expenses.

Non-GAAP Net Income/(Loss) FY17 FY18 2Q18 2Q19

Net Loss (1,228) (508) (94) (22)

Add:

Share-based Compensation Expense1 299 109 35 26

Amortization of Intangible Assets

Resulting from Business Acquisitions 7 12 3 3

Non-GAAP Net (Loss)/Income (923) (452) (56) 6

Non-GAAP Net (Loss)/Income Margin (4.6%) (1.6%) (0.8%) 0.1%

EBITDA and Adjusted EBITDA FY17 FY18 2Q18 2Q19

Net Loss (1,228) (508) (94) (22)

Add:

Depreciation & Amortization 364 462 107 151

Interest Expense 47 75 22 15

Income Tax Expense 10 12 3 4

Subtract:

Interest Income (75) (103) (32) (26)

EBITDA (882) (62) 6 122

Add:

Share-based Compensation Expense1 299 109 35 26

Adjusted EBITDA (583) (18) 41 148

Adjusted EBITDA Margin (2.9%) (0.1%) 0.6% 1.7%

11

Financial highlights by segment – 2nd Quarter 2019

Notes:


1. Others include BEST Global, BEST Capital, BEST UCargo and other new initiatives.

2. EBITDA represents net loss excluding depreciation, amortization, interest expense and income tax expense and minus interest income. Adjusted EBITDA represents EBITDA excluding share-based compensation (SBC) expense and fair value change of equity investments.

3. See the slide entitled “GAAP to Adjusted/Non-GAAP Measures Reconciliation” for more information about the non-GAAP measures used in this presentation.

4. Ex-Store include BEST Express, BEST Freight, BEST Supply Chain Management and Others.

RMBmm (Except for %) 2Q2017 2Q2018 2Q2019 %Change YoY

Revenue 4,856 6,732 8,788 30.5%

Express 3,076 4,177 5,446 30.4%

Freight 782 1,030 1,306 26.8%

Supply Chain Management 376 499 599 20.1%

Store+ 594 798 791 (1.0%)

Others1 28 228 647 183.1%

Gross Profit 133 418 520 24.5%

Gross (Loss)/Profit Margin 2.7% 6.2% 5.9% -0.3ppts

Express 3.6% 5.5% 4.5% -1.0ppts

Freight (7.8%) 5.2% 6.4% +1.2ppts

Supply Chain Management 9.4% 7.6% 8.7% +1.1ppts

Store+ 5.7% 8.0% 10.5% +2.5ppts

Others1 48.3% 14.4% 8.9% -5.5ppts

Adjusted EBITDA 2, 3 (135) 42 148 256.0%

Ex-Store+ 4 289

Store+ (99)

Unallocated (42)

Adjusted EBITDA Margin (2.8%) 0.6% 1.7% +1.1ppts

Business Overview

Participant in vast, fast-growing target addressable markets

13

Logistics market size of China, US and Southeast Asia(1)

US$ bn

Fast-growing logistics sub-sectors in ChinaRMB bn

1,602 1,634 1,672

1,829

2,010

1,451 1,482 1,393

1,495

1,636

226 249 281 313 348

2014 2015 2016 2017 2018

China USA SEA

733

1,194

2019E 2023E

Express

1,611 2,270

2019E 2023E

Less than truckload Freight

We are a key player in the world’s largest and fastest-growing logistics markets and its sub-sectors

Source: Frost and Sullivan

Note:

1. 2018 year-end exchange rate, US$ / RMB = 6.6174

4,087 5,247

2019E 2023E

Full truckload Freight

1,571 2,111

2019E 2023E

Supply chain management

299

1,002

2019E 2023E

Truckload service brokerage platform

492

2,084

2019E 2023E

FMCG B2B platform

Before

Monoline logistics companies create islands of

disparate online and offline information

Our vision is to leverage technology and an integrated supply chain and logistics platform…

BEST provides one-stop online-offline

smart supply chain solutions

Our Platform

B2B2CO2O

Online

B2C

B2B

Supply Chain

Systems

Last-mile

Express

Trucking

Cross-border

Offline

14

15 Source: Council of Supply Chain Management Professionals (CSCMP), Frost and Sullivan, iResearch, State of Logistics Report, National Bureau of Statistics of China and China Federation of Logistics & Purchasing.

0%

5%

10%

15%

20%

25%

30%

1991 1996 2001 2006 2011 2016

Warehousing Transportation Administration

Development of China Logistics Market Logistics Costs as % of GDP

Warehousing: 31.3% 34.6%

Transportation: 55.4%

51.9%

Development of US Logistics Market Logistics Costs as % of GDP

0%

3%

6%

9%

12%

15%

18%

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016

Warehousing: 49.1%30.2%

Transportation: 47.2%

63.4%

Total: 16.1% of GDP

Total: 8.0% of GDP

Total: 24.0% of GDP

14.8% of GDP

OutsourcingTechnology Standardization Consolidation

K E Y D R I V E R S O F T H E T R A N S F O R M A T I O N

…to transform China’s inefficient supply chain and logistics industry

Administration: 3.7%

6.4%

Administration: 13.3%

13.5%

2018

2018

Market leading growth

16

CAGR 2016–2018

(vs. Industry)

2Q2019

(vs. Industry)

Express

Started operation in 2010, currently is the 4th largest express provider by volume(1)

Market share grew from 2.0% in 2014 to 10.8% in 2018

Parcel volume grew from 1.0 billion in 2014 to 5.4 billion in 2018

58.9% vs 27.3% 49.0% vs. 28.4%

Freight Started operation in 2012, currently is the 2nd largest LTL provider by volume(2)

Freight volume grew from 0.5 million tonne in 2014 to 5.4 million tonnes in 201834.9% vs 19.8%(2) 26.6%(3)

Supply Chain Management

Started operation in 2009, leading 3PL supply chain management service provider

for fashion & apparel and FMCG segments

Number of orders fulfilled grew from 10.0 million in 2014 to 246.7 million in 2018

29.3% vs. 9.5%(2) 20.1%(3)

Store+

Started operation in 2015, one of the leading online and offline FMCG platforms

for convenience stores

Number of orders fulfilled grew from 687,692 in 2016 to 3,055,042 in 2018

125.4% vs 177.8%(2) (1.0)%(3)

UCargo

Started operation in 2015 to source transportation needs for internal BUs, opened

platform to external customers in March 2018

Number of transactions increased from 17,626 in 2016 to 466,278 in 2018

N/A vs 100.0%(2) 246.5 %(3, 4)

We have consistently outperformed and outgrown the industry with strong momentum in gaining market share from competitors

Note:

1. In terms of parcel volume

2. According to Frost & Sullivan industry research

3. Industry data not available

4. Growth is calculated based only on revenue generated by transactions with external customers

By Volume By Revenue

Sender /

Recipient

Sender /

Recipient

Express

17

Asset-light business utilizing our network, franchisee partners and 3rd party transportation service providers to provide express delivery of parcels

Highlights

Fast growth and market share gain: continual significant above-market growth, moving from 6th (6.9% market share) in 2016 to 4th (10.8% market share) in 2018; YoY

growth by parcel volume was 49.0% in 2Q 2019, market share improved to 12.2% as of June 30, 2019 from 10.5% as of June 30, 2018

Continuous reduction in unit cost: Cost per parcel decreased by 11.6% YoY, driven by a decrease in transportation cost per parcel by 17.7% to RMB0.71, labor cost per parcel

by 31.5% to RMB0.23, lease cost per parcel by 15.0% to RMB0.09 and other costs per parcel by 25.2% to RMB0.14

Operating efficiency enhancement: leveraged critical scale and network to optimize operations, reduced the number of hubs and sortation centers to 97 as of June 30, 2019

from 128 as of June 30, 2018

Technological advancements: 75 automated sorting and 732 dimensions and weight scanning systems in operation, digital waybill usage was 100% as of June 30, 2019

Strategies

Brand building: continue to improve service quality and enhance customer experience

Network optimization: further reduce total number of hubs and sortation centers to around 90 by end of 2019 to lower transportation, labor, lease and other costs

Technology application: continue to invest in automation technology to increase productivity

Market share gain: target minimum parcel volume growth to be 1.5x of industry growth in 2019

Pick-Up/DeliverySorting and Transporting

Service

Stations

Service

Stations

Hubs and

Sortation Centers

Line-Haul Transportation and

Feeder Services*

Hubs and

Sortation Centers

Pick-Up / Delivery

Operated by BEST Operated by Franchisee Partners *All transportation outsourced to 3rd party transportation service providers

Notes:


5.3%

6.8% 6.9%

9.4%

10.8% 10.5%

12.2%

2014 2015 2016 2017 2018 2Q2018 2Q2019

18

Express – fast growth and market share gain

735

1,4022,166

3,769

5,470

1,280

1,907

128.0%

90.8%

54.4% 74.1%

45.1%

39.6%

49.0%51.9%

48.1%

51.3%

28.0%

26.6% 25.0%28.4%

2014 2015 2016 2017 2018 2Q2018 2Q2019

BEST Express Volume BEST Express YoY Industry YoY

65.2%2014-2018 CAGR

Note: Data as of June 30, 2019.

Source: iResearch, State Post Bureau of China.

Outperforming Industry Growthmm Parcels

Continuously Gaining Market ShareMarket Share (%)

5.5 ppts2014-2018

1.7 ppts2Q2018-2Q2019

1.72x2Q Industry Growth

3.52 2.88 2.62

1.83 1.48 1.50 1.17

1.47 1.61 1.58

1.56

3.30 3.09 3.08

2.73

2014 2015 2016 2017 2018 2Q2018 2Q2019

Cost per Parcel Last-mile delivery service fee

19

Express – volume growth, network optimization, technology application drive unit economics improvement

Parcel Volumemm

Revenue per ParcelRMB

Gross Profit/(Loss) per ParcelRMB

(0.45)

(0.23) (0.13)

0.09 0.14

0.18 0.13

(14.7%)

(8.7%) (5.2%)

2.7% 4.4% 5.5% 4.5%

2014 2015 2016 2017 2018 2Q2018 2Q2019

Gross Profit/(Loss) per Parcel Gross Profit/(Loss) Margin*

735 1,402

2,166

3,769

5,470

1,280 1,907

2014 2015 2016 2017 2018 2Q2018 2Q2019

Cost of Revenue per ParcelRMB

3.07 2.65 2.49

1.92 1.63 1.68 1.30

1.47 1.61 1.58

1.56

3.39 3.24 3.26 2.86

2014 2015 2016 2017 2018 2Q2018 2Q2019Revenue per Parcel Last-mile delivery service fee

45.1%FY 2017 – FY 2018 YoY

65.2%2014-2018 CAGR

6.4%FY 2017 – FY 2018 YoY

19.5% (ex-LM)2014-2018 CAGR

11.6%2Q18 – 2Q19 YoY

4.4%FY 2017 – FY 2018 YoY

14.6% (ex-LM)2014-2018 CAGR

12.4%2Q18 – 2Q19 YoY

55.6%FY 2017 – FY 2018 YoY

28.4%2Q18 – 2Q19 YoY

*Gross Profit Margin is calculated based on revenue per parcel including last-mile delivery service fee starting from 2017Notes:




1

1

49.0%2Q18 – 2Q19 YoY

1.97 1.48 1.29

1.01 0.87 0.87 0.71

2014 2015 2016 2017 2018 2Q2018 2Q2019

0.29 0.23

0.43

0.22 0.18 0.19 0.14

2014 2015 2016 2017 2018 2Q2018 2Q2019

0.23 0.22 0.20

0.13 0.11 0.11 0.09

2014 2015 2016 2017 2018 2Q2018 2Q2019

1.02 0.94 0.70

0.47 0.33 0.34

0.23

2014 2015 2016 2017 2018 2Q2018 2Q2019

20

Transportation Cost per ParcelRMB

Labor Cost per ParcelRMB

Other Costs per ParcelRMB

Lease Cost per ParcelRMB

Express – continuous reduction in cost per parcel

13.8%FY 2017 – FY 2018 YoY

18.5%2014-2018 CAGR

17.7%2Q18 – 2Q19 YoY

15.4%FY 2017 – FY 2018 YoY

16.8%2014-2018 CAGR

15.0%2Q18 – 2Q19 YoY

29.8%FY 2017 – FY 2018 YoY

24.6%2014-2018 CAGR

31.5%2Q18 – 2Q19 YoY

18.2%FY 2017 – FY 2018 YoY

11.2%2014-2018 CAGR

25.2%2Q18 – 2Q19 YoY

Notes:


Sender /

Recipient

Sender /

Recipient

Freight

21

Asset-light business utilizing our network, franchisee partners and 3rd party transportation service providers to provide LTL and FTL delivery

Highlights

Strong volume growth: freight volume increased from 678,000 tonnes in 2014 to 5,430,000 tonnes in 2018; increased by 26.6% YoY to 1,730,000 tonnes in 2Q19

Ongoing network optimization: number of hubs and sortation centers reduced by 20.5% YoY to 101 which resulted in improved operational efficiency with lower

transportation and labor costs, while shortened delivery time

Significant margin improvement: gross profit/loss per tonne improved from negative RMB107 in 2014 to positive RMB29 in 2018; gross profit margin improved by 1.2

percentage points YoY to 6.4% in 2Q19

Service coverage expansion: total number of franchised last-mile service stations increased by 55.1% YoY to 17,380 as of June 30, 2019 from 11,209 as of June 30, 2018

Strategies

E-commerce focus: increase percentage of e-commerce related transactions to improve product mix and profit margin

Network optimization: optimize number of hubs and sorting centers to around 90 by 2020 to further reduce costs and shorten delivery time

Dynamic routing integration with Express: centralize dynamic route planning to further reduce transportation costs

Customer experience and service quality enhancement: continue to increase number of service stations and provide value-added services to customers

Pick-Up/DeliverySorting and Transporting

Service

Stations

Service

Stations

Hubs and

Sortation Centers

Line-Haul Transportation and

Feeder Services*

Hubs and

Sortation Centers

Pick-Up / Delivery

Operated by BEST Operated by Franchisee Partners *All transportation outsourced to 3rd party transportation service providers

Notes:


499 613 639 656 585 578 545

123 142 136 161

779 727 714 707

2014 2015 2016 2017 2018 2Q2018 2Q2019

Cost per Tonne Last-mile delivery service fee

22

(107)

(164)

(101)

(43)

29 39 49

(27.3%)

(36.5%)

(18.8%)

(5.8%)

3.8% 5.2% 6.4%

2014 2015 2016 2017 2018 2Q2018 2Q2019

Gross Profit/(Loss) per Tonne Gross Profit/(Loss) Margin*

678

1,507

2,982

4,316

5,430

1,366 1,730

2014 2015 2016 2017 2018 2Q2018 2Q2019

392 449 538 604 614 618 594

132 142 136 161

736 756 754 755

2014 2015 2016 2017 2018 2Q2018 2Q2019

Revenue per Tonne Last-mile delivery service fee

Freight – growth in e-commerce and consumption drives demand for LTL services

Freight Volume000’s tonnes

Revenue per TonneRMB

Cost of Revenue per TonneRMB

Gross Profit/(Loss) per TonneRMB

25.8%FY 2017 – FY 2018 YoY

68.2%2014-2018 CAGR

26.6%2Q18 – 2Q19 YoY

7.2%FY 2017 – FY 2018 YoY

4.1% (ex-LM)2014-2018 CAGR

5.7%2Q18 – 2Q19 YoY

2.7%FY 2017 – FY 2018 YoY

11.9% (ex-LM)2014-2018 CAGR

0.1%2Q18 – 2Q19 YoY

22.5%2Q18 – 2Q19 YoY

9.6pptsFY 2017 – FY 2018 YoY

Notes:


*Gross Profit Margin is calculated based on revenue per tonne including last-mile delivery service fee starting from 2017

1

1

303 402 436 423 382 382 352

2014 2015 2016 2017 2018 2Q2018 2Q2019

39 40 31

48 45 41 45

2014 2015 2016 2017 2018 2Q2018 2Q2019

48 57

66 63 57 55 55

2014 2015 2016 2017 2018 2Q2018 2Q2019

110 114 107 113 101 101 94

2014 2015 2016 2017 2018 2Q2018 2Q2019

23

Transportation Cost per TonneRMB

Labor Cost per TonneRMB

Other Costs per TonneRMB

Lease Cost per TonneRMB

Freight – ongoing reduction of unit costs

9.7%FY 2017 – FY 2018 YoY

8.0%2Q18 – 2Q19 YoY

9.5%FY 2017 – FY 2018 YoY

1.5%2Q18 – 2Q19 YoY

10.6%FY 2017 – FY 2018 YoY

7.2%2Q18 – 2Q19 YoY

6.3%FY 2017 – FY 2018 YoY

9.7%2Q18 – 2Q19 YoY

Notes:


Supply Chain Management

24

• Integrated supply chain solutions including warehouse and inventory planning, online and offline fulfillment and transportation solutions, intra-city

same-day delivery, and SaaS platform for merchants

Highlights

Solid growth: number of orders fulfilled increased from 20 million in 2014 to 247 million in 2018; increased by 41.7% YoY to 86.7 million in 2Q19

Improved margins: Gross margin improved by 1.0 percentage points YoY to 8.7% as a result of focusing on fashion & apparel and FMCG segments

Significant scale: managed 370 warehouses across China and over 2.8 million square meters of facilities, of which franchisees owned and operated 259 Cloud OFCs and 1.2

million square meters of facilities as of June 30, 2019

Strong growth in franchised Cloud OFC business: orders fulfilled by franchised Cloud OFCs increased by 78.5% YoY to 36.6 million in 2Q19, accounting for 42.3% of total

number of orders fulfilled

Strategies

One-stop solution: accelerate integration with other business units to offer integrated supply chain solutions to more customers

Fashion & Apparel and FMCG segments focus: continue to expand market leading position in these two segments

New products and services offering: provide SaaS platform to merchants to digitize their supply chain; build out intra-city delivery network in major cities; develop fresh

produce supply chain to enable rural villages to sell fresh produce directly to consumers

Online

Merchants

Offline

OtherTransportation

ServiceProviders

Consumers

BEST CloudOFCs

CustomerWarehouses

Membership Storesand Branded Stores

Customer StoresDistributors

B2C

B2B

O2O

Notes:


442 721

1,161 1,389 1,719

1,380 1,607 45 201

561

995

1,090

1,008 1,235

487

922

1,722

2,384 2,809

2,388 2,842

2014 2015 2016 2017 2018 2Q2018 2Q2019

Self-Operated Cloud OFCs Franchised Cloud OFCs

47 52 93 99 115 110 111 18 54

140

228 237 238 259

65 106

233

327 352 348 370

2014 2015 2016 2017 2018 2Q2018 2Q2019


25

28 33 58

98 104

38 52

5.1%4.0%

4.7%

6.1%5.0%

7.6%8.7%

2014 2015 2016 2017 2018 2Q2018 2Q2019

Gross Profit Gross Profit Margin

Supply Chain Management – extensive nationwide network and services

Number of Orders fulfilledmm

Gross ProfitRMB mm

Total Warehouse GFA000’s sqm

Cloud OFCs

1945

88132

164

41 501

9

33

48

82

20 3720

54

121

180

247

6187

2014 2015 2016 2017 2018 2Q2018 2Q2019


36.7%FY 2017 – FY 2018 YoY

87.3%2014-2018 CAGR

41.7%2Q18 – 2Q19 YoY

7.6%FY 2017 – FY 2018 YoY

52.6%2014-2018 CAGR

6.3%2Q18 – 2Q19 YoY

6.0%FY 2017 – FY 2018 YoY

38.8%2014-2018 CAGR

36.3%2Q18 – 2Q19 YoY

17.8%FY 2017 – FY 2018 YoY

55%2014-2018 CAGR

19.0%2Q18 – 2Q19 YoY

Notes:


Store+

26

Smart supply chain for convenience stores and last-mile services for consumers

Highlights

Rapidly growing network: number of branded stores increased to 3,106 from 748 YoY, number of membership stores increased by 10.3% YoY to 438,140

Significant increase in orders fulfilled for branded stores: the total number of store orders fulfilled was 755,756; of which 214,417 orders, accounting for 28.4% of total

orders, was fulfilled for branded stores, representing a 13.3 percentage-point increase YoY in 2Q19

Strong margin improvement: improved gross margin from negative 0.1% in 2015 to positive 9.0% in 2018; improved by 2.5 percentage points YoY to 10.5% in 2Q19

2C last mile services: rolled out Store+ membership programs, online-to-offline and last-mile services, including parcel pick-up/drop-off, home delivery, community group-

buying etc.

Strategies

Branded stores expansion: expand franchised BEST-Neighbor stores to critical scale to improve gross margin and reduce fulfillment costs per order

Membership store quality enhancement: improve margins and reduce fulfillment costs further by enhancing the quality of membership stores and their orders

Technology application: deploy data analytics to deepen cooperation with brands and stores to optimize merchandise procurement, improve operating efficiency, and roll out

new services

Last-mile services to consumers: expand membership program, online-to-offline and last-mile services to grow 2C business

Online

Merchants

Offline

Membership

and Branded

Stores

Last-Mile Services

Consumers

Merchandise and services flow

Data flow

Notes:


282 351 272 34594

1,489

476

2,761

376

1,840

748

3,106

2017 2018 2Q2018 2Q2019

Self-Operated Stores Franchised Stores

3,556

247,631

363,755

423,636 397,289

438,140

2015 2016 2017 2018 2Q2018 2Q2019

242,237

698,673

131,632 214,417

2,161,301

2,521,568

738,959 541,339 10,151

687,692

2,403,538

3,220,241

870,591 755,756

2015 2016 2017 2018 2Q2018 2Q2019

Branded Stores Membership Stores Total

27

Store+ – rapid network expansion, strong margin improvement

Number of Branded Stores Number of Membership Stores

Gross Profit/(Loss) per OrderRMB

Number of Orders Fulfilled

(1)

(14)

64 84 73

110

(0.1%) (1.7%)

6.9%

9.0% 8.0%

10.5%

2015 2016 2017 2018 2Q2018 2Q2019Gross Profit/(Loss) per order Gross Profit/(Loss) Margin

389.4%FY 2017 – FY 2018 YoY

315.2%2Q18 – 2Q19 YoY

27.1%FY 2017 – FY 2018 YoY

570.2%2015-2018 CAGR

13.2%*

2Q18 – 2Q19 YoY

16.5%FY 2017 – FY 2018 YoY

392.1%2015-2018 CAGR

10.3%2Q18 – 2Q19 YoY

31.1%FY 2017 – FY 2018 YoY

49.7%2Q18 – 2Q19 YoY

Notes:


* Decrease in store orders was due to ongoing efforts to improve the quality of orders from membership stores

Other service offerings

28

Highlights Strategies

UCargo

Significant increase in transaction volume since opening the platform

to external customers in March 2018. Number of transactions

increased from 17,626 in 2016 to 466,278 in 2018

The number of total transactions increased by 19.4% YoY to 114,538,

of which external transactions increased by more than 3.6 times to

94,406 in 2Q 2019

Continue to roll out new solutions such as multimodal,

LTL, clean energy vehicles, etc.

Provide after-market services such as bulk purchases,

insurance, maintenance and repairs to drive revenue

growth and margin

Capital

Financial services provider to participants in our ecosystem to help

them grow their businesses, and improve the overall efficiency of our

network

Have provided financing solution to 9,465 trucks as of June 30, 2019

Deepen strategic cooperation with truck manufacturers

to expand financing offerings

Provide supply chain financing solutions to ecosystem

participants

Global

International service coverage in 18 countries and regions outside of

China via partners and our own networks

Continued to grow nationwide express and fulfilment operation in

Thailand, as well as readied to launch nationwide express operations

in Vietnam in 2Q 2019

Capture enormous growth opportunities in Southeast

Asia, invest and roll out networks in Vietnam, Indonesia

and others

Develop more cross-border solutions to cover more

countries

Cloud

Backbone to BEST’s integrated services and smart solutions

Strong proprietary technology and big data analytics capabilities drive

operational excellence and enhance value creation across ecosystem

Invest in human capital and new technologies; continue

to create more solutions and improve company’s

operational efficiency

Monetize SaaS platform

29

Others service offerings – new growth engines

Notes:


4 4

68

138

33

57

2015 2016 2017 2018 2Q2018 2Q2019

32 49

198

1,236

228

647

2015 2016 2017 2018 2Q2018 2Q2019

RevenueRMB mm

Gross ProfitRMB mm

523.5%FY 2017 – FY 2018 YoY

238.0%2015-2018 CAGR

183.1%2Q18 – 2Q19 YoY

103.3%FY 2017 – FY 2018 YoY

225.5%2015-2018 CAGR

74.2%2Q18 – 2Q19 YoY

213

4,228

8,591

5,126

9,465

2016 2017 2018 2Q2018 2Q2019

17,203 103,713

318,727

70,144 20,132

423

7,874

147,551

25,781 94,406 17,626

111,587

466,278

95,925 114,538

2016 2017 2018 2Q2018 2Q2019

Internal External

UCargo- Number of Transactions

317.9%FY 2017 – FY 2018 YoY

414.3%2016-2018 CAGR

19.4%2Q18 – 2Q19 YoY

180,000

261,414222,362

295,440

3,027

4,514

3,947

4,830

2017 2018 2Q2018 2Q2019 2017 2018 2Q2018 2Q2019

Agents Trucks

UCargo - Registered Agents and TrucksEnd of Period

45.2%FY 2017 – FY 2018 YoY

32.9%2Q18 – 2Q19 YoY

49.1%FY 2017 – FY 2018 YoY

22.4%2Q18 – 2Q19 YoY

UCargo – Revenue Generated from External CustomersRMBmm

18

151

257

467 444

522

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

30

Others service offerings – rapid expansion of networks and growth in transaction volume

Notes:


Capital - Trucks FinancedEnd of Period

103.2%FY 2017 – FY 2018 YoY

535.1%2016-2018 CAGR

84.6%2Q18 – 2Q19 YoY

246.5%2Q18 – 2Q19 YoY

Senior management Experience

Johnny Chou Shaoning

Founder, Chairman and CEOGoogle, UTStarcom, AT&T Bell Laboratory, Master in Science and Engineering Princeton University

George Chow

Director, Chief Strategy and Investment OfficerCredit Suisse, UBS, Merrill Lynch, MBA in Finance Stern School of Business, New York University

Felix Dong Feng

GM of BEST Capital service lineHangzhou Guangfa Bank, Southwestern University of Finance and Economics

Andy Liu Bo

Senior Vice President, GM of Store+ service lineUTStarcom, Motorola, China University of Mining and Technology

Mary Liu Jimei

Senior Vice President of Human Resources and AdministrationUTStarcom, Ting Hsin International Group, Central South University, University of Texas

Tony Liu Tao

Senior Vice President, GM of Freight service line

Shandong Zitong International Logistics, Zhilian Logistics, Shandong University of Finance and

Economics

Jenny Pan Xiaojie

Principal Accounting OfficerState Street Corp Zhejiang, KPMG China, South China University of Technology, Zhejiang University

Ted Yuan Xingjun

Vice President, GM of UCargo service line

Hangzhou PoolMaster Logistics, UTStarcom, Hangzhou Kelong Electrical Appliances, City University

of Leeds

Mandy Zhang Mangli

Senior Vice President, GM of SCM service line

UTStarcom, Zhejiang Province Economics and Construction Development Consulting Company,

Hangzhou Wireless Equipment Factory, Zhejiang University

Fred Zhang Yanbing

Senior Vice President of Engineering, GM of Cloud service line

UTStarcom, China TravelSky, National University of Defense Technology, Karlsruhe Institute of

Technology

Richard Zhou Jian

Senior Vice President, GM of Global service line

UTStarcom, Shanghai Ziimoo Communication Technology, Cellon (Shanghai) Communication

Technology, Huazhong University of Science and Technology

Victor Zhou Shaohua

Senior Vice President, GM of Express service lineUTStarcom, Motorola, China Mobile, Beijing University of Posts and Telecommunications

Diverse and experienced management team

31

Positioned to continue strong growth momentum

32

We are focused on maximizing long-term value propositions to businesses and consumers through comprehensive integrated services and enhanced

experience driven by technology and service quality

Technology enabled networks well-positioned to capture opportunities from demand for integrated supply chain solutions and services as a result of

strong growth in e-commerce, online-to-offline integration, and ongoing industry consolidation

Asset-light business model ensures solid operating cash flow with minimal CAPEX spent and a high return on capital

Outperforming industry growth in key sub-sectors

New businesses provide growth engines with strong revenue and margin contribution

Significant gross profit, EBITDA, net income improvement YoY

Adjusted EBITDA and margin to continue to improve

Adjusted net income is at an inflection point, strive to turn positive for full year 2019

Supplemental Materials

Business Model

Financial Statements

Integrated logistics and supply chain networks

Express Freight SCM Store+

Express parcel delivery LTL and FTL delivery Smart online-offline supply chain

management

S2B2C smart supply chain for

convenience stores and last-mile

services for consumers

• Youngest and one of the fastest growing

express networks among major players,

ranked within the top 4 by parcel volume

• 100% province and city, 99% district and

county coverage

• Asset-light model with 5,300+ franchisee

partners operating 36,000+ service

stations, self-operate 97 hubs and

sortation centers, 100% of facilities

leased, 100% transportation needs

outsourced

• Leading and among the fastest growing

LTL service providers in China. Ranked

number 2 by LTL volume

• 100% province and 99% city coverage

• Asset-light model with 4,800+ franchisee

partners operating 17,000+ service

stations, self-operate 101 hubs and

sortation centers, 100% of facilities


outsourced

• Provides value-added services to

customers

• Leading 3PL supply chain management

services provider offers customized

solutions and services to multinationals,

corporates and SMEs

• Solutions include warehouse and inventory

planning, online and offline fulfillment and

transportation solutions, intra-city same-

day delivery, and SaaS platform for

merchants

• Nationwide coverage with 370 Cloud Order

Fulfillment Centers (OFCs), 2.8 million

square meters of GFA

• Asset-light model with 259 franchised

cloud OFCs operated 1.2 million square

meters of facilities, 100% of facilities


outsourced

• Addresses pain points in the traditional

retail industry such as high channel costs

and inefficient supply chain management

• Offers online merchandise sourcing and

store management services for

convenience stores; and provides online to

offline, and last-mile services to

consumers

• Covers 24 provinces and 41 tier 1 and 2

cities; 3,100+ branded stores and

438,000+ membership stores as of June

30, 2019

• Integrated with SCM - fulfillment and

transportation services provided by SCM

Business model: technology enabled integrated smart logistics and supply chain platform

34

Our mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain

Notes: As of June 30, 2019


Integrated logistics and supply chain networks (cont’d) Financial services Technology platform

UCargo Global Capital Cloud

Truckload service brokerage platform International e-commerce logistics Financial services for BEST’s ecosystem Proprietary cloud-based SaaS services

and applications platform

• Provides customized solutions to

customers and sources truckload capacity

from transportation service providers to

match demand from both the external

customers and internal business units

• Executes real-time bidding, en route

monitoring, service quality evaluation,

insurance and settlement

• Provides value-added services such as

bulk purchase of vehicles, insurance, ETC,

parts sales and general maintenance, etc.

• Nationwide network, 4,800+ service

providers and agents with access to

295,000+ trucks as of June 30, 2019

• Provides international logistics solutions

including inbound and outbound door-to-

door international express, LTL, fulfilment,

reverse logistics and freight forwarding

through our own networks and global

partners

• Covered 18 countries and regions outside

of China as of June 30, 2019

• Operated 3 Cloud OFCs in the US,

continued to expand nationwide express

and fulfilment operation in Thailand, and

readied to launch nationwide express

operations in Vietnam as of June 30, 2019

• Operated 110,000+ square meters of

facilities outside of China as of June 30,

2019

• Provides financial services and support to

participants in our ecosystem to help them

grow their businesses, while improve the

overall efficiency of our network

• Offers finance leases to help our

franchisee partners and transportation

service providers acquire trucks and other

logistics equipments

• Centralizes sourcing of products and

services used by our franchisee partners

and transportation service providers such

as bulk procurement of trucks and

accessories to obtain group discount to

reduce costs

• Strong proprietary technology and big data

analytics capabilities drive operational

excellence and enhance value creation

across ecosystem

• Powers the technology solutions and

applications for our ecosystem. Offers

integrated web and mobile portal for

merchants, consumers, franchisee

partners, transportation service providers

and employees

• Provides access to a wide range of

application and services such as SMS,

OMS, TMS, WMS, billing and payment

settlement, CRM and customer data

tracking and analytics

• 820+ engineers, and 800,000+ external

users of our SaaS platform as of June 30,

2019

Business model: technology enabled integrated smart logistics and supply chain platform (cont’d)

35

We have built comprehensive logistics and supply chain infrastructures and operations, powered by our proprietary cloud-based SaaS technology, and

supported by our financial services platform

Notes: As of June 30, 2019


Income statementFor the year Ended December 31, For the three months Ended June 30,

(RMB ‘000 Unless Noted Otherwise) 2016 2017 2018 2018 2019

Revenue

Express 5,388,833 12,786,279 17,702,869 4,177,173 5,446,395

Freight 1,604,573 3,178,044 4,102,610 1,029,676 1,305,785

Supply Chain Management 1,241,356 1,600,952 2,074,414 498,521 598,674

Store+ 560,226 2,226,034 2,845,002 798,480 790,558

Others 49,149 198,253 1,236,084 228,470 646,718

Total Revenue 8,844,137 19,989,562 27,960,979 6,732,320 8,788,130

Cost of Revenue

Express (5,671,356) (12,435,550) (16,915,801) (3,948,228) (5,202,070)

Freight (1,906,930) (3,362,652) (3,946,032) (975,846) (1,222,296)

Supply Chain Management (1,183,245) (1,502,570) (1,970,105) (460,451) (546,778)

Store+ (569,557) (2,072,912) (2,589,883) (734,571) (707,497)

Others (45,479) (130,327) (1,098,021) (195,577) (589,422)

Total Cost of Revenue (9,376,567) (19,504,011) (26,519,842) (6,314,674) (8,268,063)

Gross (Loss)/Profit (532,430) 485,551 1,441,137 417,646 520,067

Selling Expenses (370,017) (694,852) (893,859) (205,736) (213,222)

General and Administrative Expenses (521,237) (928,188) (1,020,671) (271,108) (301,169)

Research and Development Expenses (80,326) (139,009) (184,581) (51,499) (62,517)

Other Operating Income 104,047 – – - -

Total Operating Expenses (867,533) (1,762,049) (2,099,111) (528,343) (576,908)

Loss from Operations (1,399,963) (1,276,498) (657,974) (110,697) (56,841)

Interest Income 24,386 75,056 102,821 31,675 26,024

Interest Expense (21,379) (47,154) (75,060) (21,836) (14,696)

Foreign Exchange (Loss) (1,864) (6,320) (6,533) (4,318) (2,198)

Other Income 44,409 56,035 171,370 17,650 33,076

Other Expense (8,542) (18,507) (30,672) (2,681) (3,225)

Loss Before Income Tax and Share of Net Income/(Loss) of Equity Investees (1,362,953) (1,217,388) (496,048) (90,207) (17,860)

Income Tax Expense (570) (9,856) (11,887) (3,440) (4,410)

Loss Before Share of Net Income/(Loss) of Equity Investees (1,363,523) (1,227,244) (507,935) (93,647) (22,270)

Share of Net Income/(Loss) of Equity investees 43 (816) (456) (101) (101)

Net Loss (1,363,480) (1,228,060) (508,391) (93,748) (22,371)

Net Loss Attributable to Non-controlling Interests – (167) (403) - (3,077)

36 Notes:


Balance sheet

(RMB ‘000 Unless Noted Otherwise) As of June 30,

2018

As of September 30,

2018

As of December 31,

2018

As of March 31,

2019

As of June 30,

2019

ASSETS

Current Assets

Cash and Cash Equivalents 1,770,238 610,962 1,630,444 1,469,631 1,575,254

Restricted Cash 1,314,505 1,135,259 1,278,326 1,351,466 1,223,996

Accounts and Notes Receivables 772,044 858,658 1,046,844 945,990 1,026,171

Inventories 179,580 164,268 151,031 168,830 175,294

Prepayments and Other Current Assets 1,677,633 1,892,305 1,904,846 1,880,370 1,999,878

Short-term Investments 1,197,342 2,082,201 1,007,329 926,706 1,083,465

Lease Rental Receivables 270,745 388,479 613,439 677,952 153,737

Amounts Due from Related Parties 117,470 104,943 197,488 114,158 715,180

Total Current Assets 7,299,557 7,237,075 7,829,747 7,535,103 7,952,975

Non-current Assets

Property and Equipment, Net 1,544,692 1,818,441 2,064,657 2,088,339 2,410,140

Intangible Assets, Net 145,196 139,636 143,810 136,257 129,905

Long-term Investments 144,877 228,334 214,339 214,304 214,203

Goodwill 457,514 457,514 469,076 469,076 469,076

Non-current Deposits 68,131 69,186 77,043 100,372 103,052

Other Non-current Assets 59,715 46,551 45,531 44,526 69,525

Lease Rental Receivables 67,520 82,955 90,638 113,397 163,026

Restricted Cash 950,379 1,114,904 1,431,441 1,396,821 1,352,958

Operating lease right-of-use assets - - - 4,442,251 4,036,752

Total Non-current Assets 3,438,024 3,957,521 4,536,535 9,005,343 8,948,637

Total Assets 10,737,581 11,194,596 12,366,282 16,540,446 16,901,612

37 Notes:


Balance sheet (cont’d)

38 Notes:


(RMB ‘000 Unless Noted Otherwise) As of June 30,

2018

As of September 30,

2018

As of December 31,

2018

As of March 31,

2019

As of June 30,

2019

Liabilities and Shareholders’ Equity

Current liabilities

Securitization Debt - - - - 145,359

Short-term bank loans 1,297,000 1,454,900 1,782,900 2,135,000 2,271,500

Accounts and notes payable 2,248,970 2,326,568 2,851,557 2,767,388 2,849,868

Income tax payable 1,728 3,356 5,767 8,401 4,969

Customer advances and deposits and deferred revenue 1,091,020 1,200,973 1,219,230 1,127,295 1,329,016

Accrued expenses and other current liabilities 1,916,563 1,946,259 2,238,785 1,857,933 2,016,272

Capital lease obligation 2,851 2,851 2,851 1,953 1,884

Operating Lease Liabilities - - - 1,026,425 776,510

Amount due to related parties 10,511 13,265 12,429 25,324 597

Total current liabilities 6,568,643 6,948,172 8,113,519 8,949,719 9,395,975

Non-current liabilities:

Securitization Debt - - - - 67,272

Capital lease obligation 3,070 872 745 2,207 2,095

Deferred tax liability 30,136 29,425 25,356 24,583 23,843

Non-current liabilities 79,126 79,126 86,504 90,282 91,032

Operating lease liabilities - - - 3,588,439 3,380,525

Total non-current liabilities 112,332 109,423 112,605 3,705,511 3,564,767

Total liabilities 6,680,975 7,057,595 8,226,124 12,655,230 12,960,742

BEST Inc. Shareholders’ Equity 4,056,606 4,134,237 4,138,115 3,882,282 3,941,012

Non-controlling Interests - 2,764 2,043 2,934 (142)

Total Shareholders’ Equity 4,056,606 4,137,001 4,140,158 3,885,216 3,940,870

Total Liabilities and Shareholders’ Equity 10,737,581 11,194,596 12,366,282 16,540,446 16,901,612

Statement of cashflows

For the year Ended December 31, For the three months Ended June 30,


Net Cash Generated (used in)/from Operating Activities (788,794) 25,602 637,204 432,412 334,242

Net Cash Generated from/(used in) Investing Activities 677,074 952,503 (1,230,953) (369,276) (638,496)

Net Cash Generated from/(used in) Financing Activities 4,110,498 3,730,859 557,149 (331,583) 304,705

Exchange Rate Effect on Cash and Cash Equivalents, and Restricted Cash (18,751) (18,751) 53,179 75,231 27,331

Net Increase/(Decrease) in Cash and Cash Equivalents, and Restricted Cash 2,636,517 (368,213) 16,579 (193,216) 27,782

Cash and Cash Equivalents, and Restricted Cash at Beginning of Period 291,064 3,380,532 2,982,829 3,345,479 2,934,494

Cash and Cash Equivalents, and Restricted Cash at End of Period 2,927,581 3,012,319 2,999,408 3,152,263 2,962,276

39 Notes:


Reconciliation of adjusted EBITDA and non-GAAP net income

40

Reconciliation of Adjusted EBITDA



Net Loss (1,363,480) (1,228,060) (508,391) (93,748) (22,371)

(+) Depreciation & Amortization 246,311 363,909 461,612 106,515 151,250

(+) Interest Expense 21,379 47,154 75,060 21,836 14,696

(+) Income Tax Expense 570 9,856 11,887 3,440 4,410

(-) Interest Income (24,386) (75,056) (102,821) (31,675) (26,024)

EBITDA (1,119,606) (882,197) (62,653) 6,368 121,961

Share-based Compensation Expenses – 298,963 109,107 35,251 26,212

Fair Value Change of Equity Investments – – (64,628) - -

Adjusted EBITDA (1,119,606) (583,234) (18,174) 41,619 148,173

Reconciliation of Non-GAAP Net Income



Net Loss (1,363,480) (1,228,060) (508,391) (93,748) (22,371)

Share-based Compensation Expense – 298,963 109,107 35,251 26,212

Amortization of Intangible Assets Resulting from Business Acquisitions – 6,580 12,003 2,981 2,644

Fair Value Change of Equity Investments – – (64,628) - -

Non-GAAP Net (Loss)/Income (1,363,480) (922,517) (451,909) (55,516) 6,485

Notes:


Reconciliation of adjusted EBITDA and non-GAAP net income by segment

For the three months Ended June 30, 2019

(RMB ‘000 Unless Noted Otherwise) BEST (ex-Store+) Store+ Unallocated Total

Net Income/(Loss) 132,766 (104,158) (50,979) (22,371)

(+) Depreciation & Amortization 138,542 3,666 9,042 151,250

(+) Interest Expense - - 14,696 14,696

(+) Income Tax Expense 4,844 (434) - 4,410

(-) Interest Income - - (26,024) (26,024)

EBITDA 276,152 (100,926) (53,265) 121,961

Share-based Compensation Expenses 13,337 1,922 10,953 26,212

Adjusted EBITDA 289,489 (99,004) (42,312) 148,173

Breakdown and Reconciliation of Adjusted EBITDA by Segments

41 Notes:


For the three months Ended June 30, 2019

(RMB ‘000 Unless Noted Otherwise) BEST (ex-Store+) Store+ Unallocated Total

Net Income/(Loss) 132,766 (104,158) (50,979) (22,371)

Share-based Compensation Expense 13,337 1,922 10,953 26,212

Amortization of Intangible Assets Resulting from Business Acquisitions

Fair Value Change of Equity Investments 906 1,737 - 2,643

Non-GAAP Net Income/(Loss) 147,010 (100,499) (40,026) 6,484

Breakdown and Reconciliation of Non-GAAP Net Income

Thank you!

2019 Second Quarter Corporate Presentation...2019 Second Quarter Corporate Presentation August 13,...

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