As the wave of Chinese cross-border e-commerce continues to surge, cross-border logistics, serving as the "lifeblood" supporting global trade flows, is attracting renewed focus from capital markets. On May 25, the Hong Kong Stock Exchange disclosed that Yanwen Logistics Co., Ltd., a leading domestic cross-border logistics enterprise, formally submitted an application for listing on the Main Board. Shenwan Hongyuan (HK) Limited is acting as the sole sponsor.
This established player, with over two decades of industry experience and ranking second in market share among China's third-party B2C cross-border e-commerce logistics service providers, aims to inject new momentum into its global strategy through capital market access. However, behind its impressive industry ranking, Yanwen Logistics' significant performance volatility over the past three years and its high dependence on e-commerce platforms cast a shadow over its IPO journey.
**Improving Profitability and Restructured Cash Flows** The prospectus reveals that after a significant contraction in 2024, Yanwen Logistics' revenue achieved a degree of recovery growth in 2025, though it has not yet returned to the 2023 peak. This revenue trajectory itself suggests the impact of external market demand fluctuations or internal business restructuring. Notably, while 2025 revenue increased by approximately 14.8% year-on-year to RMB 6.687 billion, it remained about 29.5% lower than the RMB 9.483 billion level in 2023, indicating the company has not fully regained lost market share or business volume.
However, changes on the profit front show more positive signals: Gross profit rose steadily from RMB 344 million in 2023 to RMB 462 million in 2025, with the gross profit margin increasing from 3.63% to 6.91% over the same period, nearly doubling. This improvement suggests that while revenue scale faced temporary pressure, the company likely enhanced profitability per unit of revenue by optimizing its customer mix, adjusting service pricing, or improving operational efficiency.
Further observation of profit before tax shows a jump from RMB 55.29 million in 2023 to RMB 153 million in 2025, an increase of 177%, far exceeding the growth in gross profit. This gap reflects significant achievements in controlling period expenses. Additionally, net cash flow from operating activities shifted from an outflow of RMB 2.57 million in 2023 to a net inflow of RMB 398 million in 2024, further improving to RMB 516 million in 2025. This strong operating cash flow performance, significantly higher than net profit for the same periods, indicates that the company's net profit contains substantial non-cash expenses (such as depreciation and amortization, credit impairment provisions) or that working capital management has improved substantially—particularly cash inflows from changes in the turnover speed of receivables and payables. For a logistics enterprise, this suggests Yanwen Logistics may have strengthened management of customer credit terms while extending payment cycles to suppliers (e.g., trunk line carriers, last-mile delivery providers), thereby obtaining significant cash buffers.
Overall, between 2023 and 2025, Yanwen Logistics completed a financial "soft landing" and restart. While revenue scale contracted, profitability (gross margin, pre-tax margin) achieved dual growth, operating cash flow turned from negative to positive and significantly exceeded net profit, and cash reserves steadily increased. The company has evidently shifted from early-stage extensive growth or passive responses to market changes towards a management model more focused on profit quality and cash flow discipline.
**Strategic Transformation: From Cross-border Trunk Lines to Local Network** Between 2023 and 2025, Yanwen Logistics exhibited significant characteristics of strategic reshaping. According to the prospectus, the company's revenue structure underwent substantial adjustment: Revenue from cross-border e-commerce express services decreased from RMB 7.664 billion in 2023 to RMB 4.651 billion in 2024, recovering to RMB 5.737 billion in 2025, accounting for 80.8%, 80.2%, and 85.8% of total revenue, respectively. The volatility of this business is highly correlated with customer concentration risk—in 2024, some large cross-border e-commerce platforms shifted their logistics procurement model from a centralized single supplier to segmented transportation, directly causing a sharp decline in Yanwen Logistics' core business volume.
Notably, the revenue contribution from the top five customers decreased from 64.0% in 2023 to 18.0% in 2025, with the largest customer's share shrinking from 51.9% to 8.4%. The diversification of the customer structure has, to some extent, reduced the impact of losing a single client, but it also reflects a relative weakening of the company's bargaining power with leading platforms.
More strategically significant is the rapid emergence of domestic last-mile delivery services. Revenue from this business surged from RMB 91 million in 2024 to RMB 387 million in 2025, a year-on-year increase of 322%, with its revenue share jumping from 1.6% to 5.8%. The logic behind this growth lies in Yanwen Logistics initiating the construction of a U.S. domestic last-mile delivery network in March 2024. By the end of 2025, it had established 10 regional sorting centers covering approximately 70% of the U.S. population across 41 states. This marks the company's transition from a pure cross-border trunk line carrier to an integrated logistics service provider driven by both "cross-border + domestic" operations.
From a business model perspective, expanding into domestic delivery helps the company enter the more profitable end segment of the cross-border e-commerce logistics value chain. In traditional cross-border direct mail models, last-mile delivery costs typically account for 30% to 50% of total logistics costs and are dominated by local overseas logistics providers. By building its own U.S. domestic network, Yanwen Logistics has the potential to internalize this portion of the profit.
However, this business is currently still in a phase of strategic losses: It recorded gross losses of RMB 15.94 million and RMB 30.96 million in 2024 and 2025, respectively, with gross loss margins of 17.5% and 8.0%. Although the loss margin is narrowing, the absolute loss amount expanded alongside revenue growth, indicating that economies of scale have not yet fully materialized, and the dilution of fixed costs (sorting centers, transport fleets, staffing) requires more time.
The continued contraction of other cross-border service revenue is also noteworthy. This business declined from RMB 1.819 billion in 2023 to RMB 565 million in 2025, a decrease of approximately 69% over three years, with its revenue share dropping from 19.2% to 8.4%. Considering its gross margin performance (5.8% in 2023, 5.2% in 2024, -0.9% in 2025), this business has entered a state of gross loss. This could be the result of the company proactively scaling back low-margin, non-core product lines, or market competition intensifying leading to share loss. Regardless of the cause, the decline of this business has led to the company's operations becoming more concentrated on cross-border e-commerce express services. The degree of reliance on a single business actually increased in 2025, constituting another form of structural risk.
**Industry Comparison and Competitive Landscape** Examining Yanwen Logistics' profitability within the industry context yields more complex conclusions. The company's overall gross margin improved from 3.6% in 2023 to 6.9% in 2025, nearly doubling over three years. The gross margin of its core business, cross-border e-commerce express services, jumped even more significantly from 3.1% to 8.7%. This degree of improvement is notable within the logistics industry.
However, compared to peers in the same industry, this level remains low. Companies similarly focused on the cross-border e-commerce logistics sector generally maintain gross margins in the 15% to 30% range. Yanwen Logistics' overall gross margin of 6.9% is only about one-third of the industry average.
More noteworthy is the net profit margin dimension: The company's net profit margin was 1.6% in 2025, while J&T Express achieved a net profit margin as high as 15.9% in the Southeast Asian market during the same period. The core reason for this significant gap lies in the fundamental difference in business structures: J&T possesses a complete domestic delivery network in Southeast Asia, enabling it to capture profits across the entire chain from collection to last-mile delivery. In contrast, Yanwen Logistics' core business still primarily focuses on cross-border trunk line transportation. This segment faces multiple pressures including aviation fuel price volatility, rigid capacity procurement costs, and intense competition on international routes, resulting in naturally thinner profit margins.
Furthermore, according to Frost & Sullivan data, China's B2C cross-border e-commerce logistics industry is highly fragmented. The combined market share of the top five enterprises was only 8.1% in 2025. Yanwen Logistics ranked second with a 1.8% share, but the industry leader's share was only 3.4%. This extremely fragmented market structure implies fierce price competition, making it difficult for individual companies to significantly enhance pricing power through economies of scale, which structurally suppresses the overall profitability level of the industry.
**Conclusion** In summary, Yanwen Logistics is at a critical juncture in its transition from a "cross-border trunk line carrier" to an "integrated cross-border + domestic logistics service provider." The continuous improvement in the gross margin of its core business validates the effectiveness of cost control and customer structure optimization. The significant reduction in customer concentration has lowered single-platform risk. The rapid expansion of its U.S. domestic network demonstrates the execution capability of its strategic transformation.
However, challenges are equally evident: Overall profitability remains substantially below the industry average. The domestic business is still operating at a loss, with the loss amount expanding alongside scale growth. The highly fragmented competitive landscape of the industry limits the potential for pricing power improvement.
Compared to J&T Express's achieved gross margin of 17.8% and net profit margin of 15.9% in the Southeast Asian market, Yanwen Logistics' localization efforts in the U.S. market are still in the investment phase. The timing of when it can cross the breakeven point and achieve positive profit contribution will be a key variable determining the company's valuation logic. Additionally, the company's reliance on third-party capacity resources (procurement from the top five suppliers accounts for approximately 28% of total procurement) means variable costs constitute a relatively high proportion of its cost structure, limiting the elasticity of scale effect release.
Against the backdrop of extremely low concentration and ongoing price competition in the cross-border e-commerce logistics industry, whether Yanwen Logistics can leverage its "U.S. domestic delivery network" as a differentiated asset to move from the low-margin red ocean of trunk line transportation into the higher-margin blue ocean of last-mile delivery is the core proposition for breaking through its current profitability ceiling.