If we were to select the top ten key words of China's economy in 2024, "new quality productivity" would undoubtedly have a place, and in all likelihood, it would rank first.

The development of new quality productivity has been mentioned multiple times in the policy arena. "Accelerating the development of new quality productivity" has even been included in the 2024 government work report and listed as one of the top ten work tasks for 2024. In July of this year, the Third Plenary Session also emphasized the "development of new quality productivity."

What is new quality productivity? The key lies in the word "new", which means driven by technological innovation and transforms the traditional economic growth mode and production development path, in line with the advanced productive forces of the new development concept, and needs to exhibit characteristics of high technology, high efficiency, and high quality.

As a fundamental industry of the national economy, the logistics industry connects the stages of production, distribution, circulation, and consumption, and should be one of the core elements of the transformation of new quality productivity.

So, when it comes to the logistics industry, what kind of connotations should be associated with new quality productivity?

The latest interim report from Manbang (Full Truck Alliance) may provide us with some insights.

1. Addressing industry pain points, with double-digit growth in revenue and profits.

This interim report once again exceeded market expectations for Manbang (Full Truck Alliance).

In the first half of the year, Manbang achieved operating revenue of 2.76 billion yuan (RMB), a year-on-year increase of 34.1%. The adjusted operating profit under non-U.S. GAAP reached 0.7 billion yuan, a year-on-year increase of 55.1%. The adjusted net profit under non-U.S. GAAP reached 0.97 billion yuan, a year-on-year increase of 34.3%.

It is not easy to achieve double-digit growth in revenue and profit. According to wind data, the total road freight volume in China in the second quarter of this year was 10.767 billion tons, a year-on-year increase of 3.17%.

Against the complex background of the macro economy, Manbang is able to achieve growth against the trend, thanks to solving the pain points in the industry.

In the past, road freight presented the characteristics of being "disordered and small", with a lack of standardization and irregularities prevailing in the industry.

For cargo owners, they are easily subjected to multi-level price increases and profit squeeze by intermediaries, and the information during transportation cannot be timely feedbacked. For drivers, problems such as opaque freight information, intense industry competition, high empty load rates, and multiple intermediary links reduce their income.

As a freight platform, Manbang mainly matches transactions between cargo owners and drivers, solving the problem of information asymmetry, which conforms to the guidance of "reducing logistics costs for the whole society" emphasized in the top-level design.

The original intention of "reducing logistics costs for the whole society" is not to reduce the profit space of the logistics industry, but to enhance the efficiency of the logistics industry and strengthen the core competitiveness of practitioners, improve the efficiency of economic operation, and benefit both the production end and the consumption end. This is highly consistent with the development of new quality productivity.

From this perspective, the freight platform constructed by Manbang is a sample of the new quality productivity in the logistics industry.

What kind of demonstration has Full Truck Alliance provided?

With the support of the internet dividend and the Matthew effect, the mutual reinforcement between truck owners and drivers on the Full Truck Alliance platform continues to strengthen, establishing a leading position in the road freight platform.

However, against the background of emphasizing the development of new quality productivity, Full Truck Alliance is actively exploring high-quality development and has identified the direction of digitization, intelligence, and greening. Continuously focusing on the construction and vitality of new quality logistics infrastructure.

1) Digitization + Intelligence

As mentioned earlier, the essence of a freight platform lies in matching transactions between cargo owners and drivers.

Full Truck Alliance breaks the information silo and changes the traditional way of cargo sources relying on "acquaintance introductions" by utilizing technologies such as big data, cloud computing, and artificial intelligence. This achieves real-time sharing of logistics information and intelligent matching, greatly improving logistics efficiency and service quality.

For cargo owners, "saving time, effort, and money" is the core demand. Leveraging intelligent algorithms, Full Truck Alliance enables cargo owners' demands to receive driver responses within minutes or even seconds, eliminating intermediary links while providing a variety of transportation solutions to meet differentiated needs of cargo owners.

Especially for 30 million small and medium-sized cargo owners, the need for non-standardized, immediate freight demand requires rapid response capabilities. The platform's matching accuracy and response speed are highly demanding, with transportation costs often accounting for over 10% of total costs, making small and medium-sized cargo owners very sensitive to freight rates. Full Truck Alliance accurately targets small and medium-sized direct customers, enabling small and medium-sized enterprise cargo owners to break free from transportation constraints, focus on their own business operations, reflecting its profound understanding of the needs of small and medium cargo owners. In the second quarter, the proportion of performance orders from direct customers on the Full Truck Alliance platform has reached 48%.

Not only that, as a platform, Full Truck Alliance also joins the freight trading parties and provides a guarantee trading service model to further enhance the confidence of the shipper.

In the second quarter, the monthly active shipper of Full Truck Alliance reached a new high of 2.65 million, a year-on-year increase of 32.8%.

For drivers, being able to quickly find enough orders in the increasingly saturated freight track is the key, and Full Truck Alliance's massive shipper orders are the drivers' top choice. In addition, Full Truck Alliance can help drivers reduce empty driving rates, empty load rates, and vacancy rates and make more money through good route planning.

As of the second quarter, the number of active driver users who have fulfilled tasks in the past 12 months reached 3.98 million, continuing to grow.

In addition, in order to select better quality trading parties, Full Truck Alliance has established a comprehensive evaluation mechanism. On the one hand, it constructs a shipper credit evaluation system based on indicators such as the completion volume, transaction rate, and cancellation rate. On the other hand, it allows high-quality capacity to obtain more high-quality orders through "grabbing good goods in seconds + driver level system + driver behavior score", improves the quality of supply-side services, and promotes the healthy development of the entire platform ecosystem.

With the increasingly smooth information chain between shippers and drivers, combined with the selection of good operating mechanisms, the platform ecosystem thrives. The number of fulfilled orders on the platform during the reporting period reached 49.1 million, reaching a new historical high, with a year-on-year growth rate of 25%, exceeding the national road freight volume growth rate.

2) Greenization

From the perspective of Full Truck Alliance's establishment process, digitization and intelligence are its inherent genes, and greenization reflects its profound insight into the future development of the logistics industry.

If we talk about the certain development directions in the next thirty years, green and low-carbon will definitely be one of them.

In recent years, industries from all walks of life have been following the guidance of carbon neutrality to achieve transformation and upgrading. As a major energy consumer, the logistics industry consumes a huge amount of energy and produces a large amount of carbon emissions. According to the China Green Logistics Development Report (2023), the logistics industry accounts for about 9% of the country's total carbon emissions.

Taking the overall situation of carbon neutrality into consideration, the logistics industry's green and low-carbon transformation is imminent.

In order to achieve the green transformation of the logistics industry, Manbang (Full Truck Alliance) is promoting the use of new energy vehicles and optimizing transportation structures. In the first half of the year, the proportion of new energy vehicles in Manbang's fulfilled orders was close to 20%, and the growth rate of new energy vehicle orders doubled.

Increasing the proportion of new energy vehicles is not only a reflection of social responsibility, but also a necessary measure for long-term development. According to the latest data released by the China Passenger Car Association on August 8th, the penetration rate of new energy vehicles in the domestic market reached 51% in July, surpassing traditional fuel vehicles for the first time. With the increasing penetration rate of new energy vehicles, incorporating new energy transportation capacity into the operating system ahead of time will undoubtedly gain a competitive advantage and help the company adapt to the era of new energy transportation capacity in advance.

In fact, Manbang can provide drivers with optimal cargo transportation plans and improve vehicle utilization efficiency through technologies such as big data and cloud computing. Essentially, this also reduces the carbon emissions per unit of cargo.

III. Conclusion

Stimulated by better-than-expected performance, Manbang's stock rose more than 5% on the evening of the day when the financial report was released on the 21st. At the same time, several major banks released reports expressing bullish views on Manbang's future profit improvement.

China International Capital Corporation's report pointed out that as the proportion of online trading business revenue with higher gross margin increases, the company's profit margin will continue to improve, giving a target price of $12.2; Huaxing Capital also has a similar view, believing that Manbang, with its strong execution, can offset macroeconomic negative factors, thereby maintaining profit growth and giving a target price of $15.1.

In addition, several top institutions have expressed a positive attitude towards Manbang's future development with substantial investments. In the second quarter of this year, top institutions' asset management departments such as JPMorgan, Morgan Stanley, Nomura Securities, and Goldman Sachs all significantly increased their holdings of Manbang. Fidelity International and China International Capital Corporation also continued to increase their holdings this quarter. Europe's top foreign banks, Nordea Bank and Swiss renowned asset management company Pictet, also returned to position in Manbang this quarter.

While institutional voting is certainly of reference value, the more important issue is that as a leader in the industry, Manbang is able to continue to innovate, constantly explore new formats and models in the logistics industry, and provide a high-score answer for the development of new quality production forces in the logistics industry.