Market Research Report : Logistics market in china 2014 - Sample

Logistics Market – China

November 2014

2 LOGISTICS MARKET IN CHINA 2014.PPT

Executive Summary

Market

Drivers & Challenges

Competition

Logistics market value in China is expected to reach USD 55.1 tn by 2018 from USD 28 tn in 2012, growing at a CAGR of 11.9%

Industrial products accounted for a major share of 91.4% of the logistics market value in 2012

Trends

Development of National Transport Infrastructure

Market Consolidation

Logistics Outsourcing

Inland Expansion of Third Party Logistics

Rising Investments

Drivers:

- Healthy Economy

- Rising Income and Increasing Domestic Consumption

- Growing E-commerce Business

- Manufacturers’ Shift to the West

- Strong Retail Sales

- Opportunity from Cold Chain Logistics

- Opportunity from Pharmaceutical Logistics

Government Initiatives

Reorganization of Logistics-Related Administrative Institutions in 2008

Fragmented Regulatory Framework

Development Plan of Commercial Logistics (2011)

Logistics Key Focus Areas under the 12th Five Year Plan (2010-2015)

Medium-and Long-term Development Plan of Logistics Industry (2012-2020)

Seven point plan for (2014-2020)

Challenges:

- Rise in Logistics Costs Due to Low Efficiency

- Lack of Modern Logistics Facilities

- Inadequate Warehouse Space

- Regional Protectionism

- Constraints in Human Resources

- Preference Towards Self Management

Major Players

Sinotrans Ltd. FedEx Corporation DHL Logistics Pvt. Ltd.


•Macroeconomic Indicators

•Introduction

•Market Overview

•Drivers & Challenges

•Government Initiatives

•Trends

•Mergers & Acquisitions

•Competitive Landscape

•Strategic Recommendations

•Appendix

4

SAMPLE

LOGISTICS MARKET IN CHINA 2014.PPT

Macroeconomic Indicators (1/3)

Current Account Balance

Exchange Rate: Half Yearly

0

100

200

300

400

USD bn

20--

f6

20--

e5

20--

d4

20--

c3

20--

b2

20--

a1

5/1/14 4/1/14

6.08

3/1/14 2/1/14 1/1/14

USD/INR

e3

e1

e2 d3

d1

d2

c3

c1

c2

b3

b1

b2

a3

a1 a2

Period Low Period Average Period High


Logistics Industry Framework

Note: LTL refers to less than truckload, FTL refers to full truckload, 3PL refers to Third-Party Logistics, 4PL refers to Fourth-Party Logistics and SCM refers to Supply Chain Management

Regulator (Government Authorities,

Industry Association) Road/ Highway

Providers

Sea and Inland Ports

Railways

Equipment Providers

Postal / Mail Services

Cargo Airlines

Trucking Companies

LTL / FTL

Shipping Companies

Cargo Rail Companies

Courier

Express

Parcel

Load Logistics Provider (LLP)

Contract Logistics (3PL) Value Added Services, Warehousing,

Transportation, Distribution

4PL

Freight Forwarding Road LTL / FTL, Air Freight,

Sea Freight, Rail Freight

Professional Services Consulting, IT Systems Integrators,

SCM Application Providers

Airports

Logistics related Financial Services

Infrastructure

Carriers

Delivery Type

Service Providers

SAMPLE


Logistics market in China is exhibiting rapid development with annual double digit growth expected through 2012-18

• Logistics industry is acting as a bridge between the value

chain from production to sales

• It plays a key role in China’s smooth economic

development

• In 2012, the logistics demand coefficient which is the

logistics industry’s value to GDP ratio, was 3.4, which is

higher than the coefficient in 2011, implying a steady

growth in the logistics market

• Booming manufacturing sector is the main factor behind

China’s economic development

Industrial products have the maximum value in the country’s

total logistics value

• Logistics industry is highly dependent on transport

facilities for its growth

Growth in the logistics industry will accelerate the network

and density of the five major segments of the market –

express, road freight, air freight, contract logistics and

international freight forwarding

Logistics Market Value and Growth Logistics Market – Overview

r

q

p

0

USD tr

11.9%

20--

a7

20--

a6

20--

a5

20--

a4

20--

a3

20--

a2

20--

a1

Logistics Market Value Category-wise

x3 x5

x4 x2

x1

Segment 4

Segment 5

Segment 3

Segment 2

Segment 1

2012


Drivers & Challenges – Summary

Drivers

Healthy Economy

Rising Income and Increasing Domestic Consumption

Growing E-commerce Business

Manufacturers’ Shift to the West

Strong Retail Sales

Opportunity from Cold Chain Logistics

Opportunity from Pharmaceutical Logistics

Challenges

Rise in Logistics Costs Due to Low Efficiency

Lack of Modern Logistics Facilities

Inadequate Warehouse Space

Regional Protectionism

Constraints in Human Resources

Preference Towards Self Management

8

SAMPLE


Government has implemented certain measures to reorganize the regulatory structure of the logistics industry

• In 2008, there was a major reorganization at the ministry level to streamline government bodies

associated with the transport system

• Ministry of Transport was established by consolidating the functions of a number of government

departments regulating civil aviation, postal services, communications and urban public

transportation

According to China’s new Postal Law which became effective on 1st Oct 2009, only China’s state owned post

offices can deliver domestic letters and documents

– This law also imposes a minimum capital requirement of ~USD72,963, indicating the exit of small players from the market

Reorganization of Logistics-Related Administrative Institutions in 2008

Ministry of Communications

Civil Aviation Administration of China

Urban traffic management under the

Ministry of Construction

Functions merged

State Bureau of Civil Aviation

State Post Bureau

Under

Purview of

Ministry of Transport


`

Development of National Transport Infrastructure

Logistics Outsourcing

Rising Investments

Market Consolidation

Inland Expansion of 3PLs

Key Trends

Trends – Summary

10

SAMPLE Porter’s Five Forces Analysis

Competitive Rivalry

Bargaining Power of Suppliers

Bargaining Power of Buyers

Threat of Substitutes

Threat of New Entrants

Impact x

Impact x

Impact x

Impact x

Impact x


11

SAMPLE Key Ratios of Top 3 Companies – Operational Basis (FY 2013) (1/3)

Competitive Benchmarking (2/5)

0

10

20

30

40

%

Company C

b3 a3

Company B

b2 a2

Company A

b1

a1

Operating Margin Net Margin

• Company A recorded operating margin of x1%, higher than that of Company B which recorded operating margin of y2% but lower than that of Company C which recorded operating margin of z3%

• Net margin for Company A , Company B and Company C are a1%, b2% and c3% respectively, wherein Company A has the highest net margin among these three companies


12

SAMPLE


Public: Domestic Company – Company 1 (1/5)

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Name Designation

Person 1 MD and Executive Director

Person 2 VC and VC of Share Transfer Committee

Person 3 Director

Person 4 Director

Head Office Mumbai

Category Products/Services

13

SAMPLE Financial Snapshot Key Ratios

Financial Summary

• The company earned a net profit of INR x1 mn in FY 2013, as compared to net profit of INR x2 mn in FY 2012

• The company reported total income of INR y1 mn in FY 2013, registering an increase of y2% over FY 2012

• The company earned an operating margin of z1% in FY 2013, an increase of z2percentage points over FY 2012

• The company reported debt to equity ratio of a1 in FY 2013, an increase of a3% over FY 2012

Key Financial Performance Indicators

Indicators Value (20/03/2014)

Particulars y-o-y change

(2013-12) 2013 2012 2011 2010

Profitability Ratios Operating Margin

Net Margin

Profit Before Tax Margin

Return on Equity

Return on Capital Employed

Return on Working Capital

Return on Assets

Return on Fixed Assets

Cost Ratios Operating costs (% of Sales)

Administration costs (% of Sales)

Interest costs (% of Sales)

Liquidity Ratios Current Ratio

Cash Ratio

Leverage Ratios Debt to Equity Ratio

Debt to Capital Ratio

Interest Coverage Ratio

Efficiency Ratios Fixed Asset Turnover

Asset Turnover

Current Asset Turnover

Working Capital Turnover

Capital Employed Turnover

Improved Decline

Net Profit/Loss Total Income

e

d

c

b

a

s

r

q

p

2013

a4

z4

2012

a3

z3

2011

a2

z2

2010

a1

z1

Public: Domestic Company – Company 1 (2/5)


14

SAMPLE Public: Domestic Company – Company 1 (3/5) Key Business Segments Key Geographic Segments

A%

B%

C%

2013

b4%

2012

b3%

2011

b2%

2010

b1%

a1% C%

B%

A%

2010

y1%

x1%

2013

x4%

2012

x3%

2011

x2%

Region 2 Region 1

Business Highlights

Segment 2 Segment 1

Description News

Overview • The company has operations in Country A, Country B and Country C that offers treatment for acute and

chronic diseases in primary, secondary and tertiary care sectors

Services

• Specializes in 50 specialties comprising cardiac sciences, oncology, radiology and imaging, gastroenterology, neurosciences, orthopedics, critical care services and in minimally invasive surgeries and transplantation

• Operates retail pharmacy outlets all across the country


15

SAMPLE Public: Domestic Company – Company 1 – SWOT Analysis (5/5)


T O

W S


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Market Research Report : Logistics market in china 2014 - Sample