PR Newswire | Mar 10, 2021 06:00PM EST

Results

03/10 17:00 CST

BEST Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2020 Financial ResultsStrategic Refocusing Plan Delivered Positive Results HANGZHOU, China, March 10, 2021

HANGZHOU, China, March 10, 2021 /PRNewswire/ -- BEST Inc. (NYSE: BEST) ("BEST" or the "Company"), a leading integrated smart supply chain solutions and logistics services provider in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2020.

Following the Company's previously announced decision to wind down its Store+ business by the end of 2020, starting with this announcement for the fourth quarter ended December 31, 2020, Store+'s historical financial results for the periods prior to the wind-down will be reflected in the Company's consolidated financial statements as discontinued operations.

Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, "In the fourth quarter of 2020, we executed our strategic refocusing plan and turned our business around amid strong industry competition, attesting to our ability to make quick and decisive changes in our strategies and operational practices. We continued to make improvements to all of our business segments and reduced losses, which put us back on the path to strong growth and profitability. Our Express segment under new management focused on strengthening network stability, optimizing product and cost structure, as well as enhancing service quality. In December 2020, despite a net loss for the quarter, net profit for Express turned positive for the first time since the second quarter of 2020. Our Freight segment continued to strengthen its industry leadership, demonstrating 25.1% year-over-year volume growth while returning to profitability. We also took initiatives to improve our Supply Chain Management performance as we focused on higher-margin customers. Our Global business continued its growth momentum by gaining more cross-border and Southeast Asia businesses, achieving over 400% parcel volume growth year-over-year."

"While the Company suffered major setbacks due to the pandemic in 2020, we have taken decisive actions to steer the Company back to the path of growth and profitability. We firmly believe the worst is behind us and the future is bright. We entered 2021 with optimism and strong momentum, and anticipate strong growth for our business as the year progresses. We are determined to strengthen our market share, optimize cost structure, improve service quality and customer experience, and build out a leading integrated smart supply chain and logistics company to deliver sustainable and powerful future growth," concluded Mr. Chou.

Gloria Fan, BEST's Chief Financial Officer, commented, "We concluded a challenging 2020 with a fourth quarter focusing on strategic initiatives. We took decisive actions to realign our businesses to adapt to the evolving competitive market conditions as well as set a solid foundation for future growth. Our revenue, affected by the challenging pricing environment and reduced by the wind-down of Store+ during the quarter, was RMB9.3 billion. As part of our refocusing strategy, we identified and executed additional measures to manage our costs, expenses and liquidity. In the fourth quarter, we generated net operating cash flow of RMB347 million while maintaining a healthy combined balance of cash and cash equivalents, restricted cash and short-term investments of RMB4.5 billion. As we progress into 2021, we will remain focused on improving our capital structure as well as enhancing our balance sheet and cash flow to support the Company's future growth. Based on current market conditions and current operations, we expect the Company's revenue for the full fiscal year of 2021 to be between RMB34 billion and RMB36 billion. This forecast reflects management's current and preliminary expectation, which is subject to change."

FINANCIAL HIGHLIGHTS[1]

For the Fourth Quarter Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

* Revenue was RMB9,255.4 million (US$1,418.4 million), a decrease of 8.9% year-over-year ("YoY"). The decrease was primarily due to a decrease in average selling price ("ASP") per parcel in Express business, partially offset by an increase in Express parcel volume. * Gross Profit was RMB50.1 million (US$7.7 million), a decrease of 91.1% YoY compared to gross profit of RMB561.5 million in the same period of 2019. The decrease was primarily due to a steeper ASP decrease than unit cost reduction in Express business. Gross Margin was 0.5%, a decrease of 5.0 percentage points ("ppts") YoY. * Net Loss was RMB492.9 million (US$75.5 million), compared to a net income of RMB132.6 million in the same period of 2019. Non-GAAP Net Loss[2][3] was RMB475.7 million (US$72.9 million), compared to non-GAAP net income of RMB146.8 million in the same period of 2019. * Diluted EPS[4] was negative RMB1.26 (US$0.19), compared to RMB0.36 in the same period of 2019. Non-GAAP Diluted EPS(3)(4) was negative RMB1.22 (US$0.19), compared to RMB0.39 in the same period of 2019. * EBITDA[5] was negative RMB305.2 million (US$46.8 million), compared to RMB245.9 million in the same period of 2019. Adjusted EBITDA[3][5] was negative RMB288.0 million (US$44.1 million), compared to RMB259.2 million in the same period of 2019.

^[1] All numbers presented have been rounded to the nearest integer, tenth, orhundredth, and year-over-year comparisons are based on figures before rounding.

^[2] Non-GAAP net income/loss represents net income/loss excluding share-basedcompensation expenses, amortization of intangible assets resulting frombusiness acquisitions, and fair value change of equity investments (if any).

^[3] See the sections entitled "Use of Non-GAAP Financial Measures" and"Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures"for more information about the non-GAAP measures referred to within thisresults announcement.

^[4] Diluted earnings per share, or Diluted EPS, is calculated by dividing netprofit attributable to ordinary shareholders as adjusted for the effect ofdilutive ordinary equivalent shares, if any, by the weighted average number ofordinary and dilutive ordinary equivalent shares outstanding during the period.

^[5] EBITDA represents net loss excluding depreciation, amortization, interestexpense and income tax expense and minus interest income. Adjusted EBITDArepresents EBITDA excluding share-based compensation expenses and fair valuechange of equity investments (if any).

For the Fiscal Year Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

* Revenue was RMB29,995.0 million (US$4,596.9 million), a decrease of 7.3% YoY. The decrease was primarily due to a decrease in ASP per parcel in Express business, partially offset by an increase in Express parcel volume. * Gross Profit was RMB238.1 million (US$36.5 million), a decrease of 85.5% YoY compared to gross profit of RMB1,637.3 million in fiscal year 2019. The decrease was primarily due to a steeper ASP decrease than unit cost reduction in Express and Freight businesses. Gross Margin was 0.8%, a decrease of 4.3 percentage points YoY. * Net Loss was RMB1,683.1 million (US$257.9 million), compared to a net income of RMB172.7 million in fiscal year 2019. Non-GAAP Net Loss was RMB1,569.3 million (US$240.5 million), compared to non-GAAP net income of RMB253.9 million in fiscal year 2019. * Diluted EPS was negative RMB4.28 (US$0.66), compared to RMB0.49 in fiscal year 2019. Non-GAAP Diluted EPS was negative RMB3.98 (US$0.61), compared to RMB0.70 in fiscal year 2019. * EBITDA was negative RMB1,046.1 million (US$160.3 million), compared to RMB652.9 million in fiscal year 2019. Adjusted EBITDA was negative RMB935.1 million (US$143.3 million), compared to RMB730.4 million in fiscal year 2019.

BUSINESS HIGHLIGHTS[6]

* The Company made significant changes in the fourth quarter of 2020 across its business segments. The initial positive results brought about by these changes affirms the Company's strategic direction targeting a sustainable recovery. * The Company continues to evaluate strategic options aimed at enhancing its balance sheet and profitability.

^[6] All numbers presented have been rounded to the nearest integer, tenth, orhundredth, and year-over-year comparisons are based on figures beforerounding.

BEST Express -The strategic refocusing plan announced in November 2020 focused on optimizing product structure, improving network stability and flexibility, as well as enhancing service quality and customer experience. These initiatives have already resulted in an encouraging recovery, demonstrated by improving parcel unit economics. Despite a net loss for the quarter, it achieved net profit for the month of December. During the quarter, parcel volume increased by 6.0% YoY, representing a market share of 9.5% during the quarter. Gross margin contracted by 7.2 ppts due to a decline in ASP per parcel of 20.4% YoY, partially offset by a decrease in average cost per parcel of 14.3% YoY. In fiscal year 2020, total parcel volume increased by 12.7% YoY to 8.54 billion, representing a market share of 10.2%.

BEST Freight -Freight continued strong post-pandemic recovery and delivered a strong quarter with a higher-than-industry-average growth rate while returning to profitability. The Company continued to emphasize the e-commerce aspect of its freight services, solidify its leadership position and brand recognition, and improve operating efficiency. Freight volume increased by 25.1% YoY in the fourth quarter of 2020. Gross margin was 5.5%, having recovered to pre-COVID level, and improved by 4.5 ppts quarter-over-quarter ("QoQ"), as pricing in the fourth quarter continued to rebound. Average cost per tonne and ASP both decreased by 16.7% YoY. In fiscal year 2020, total Freight volume increased by 20.2% YoY to 8.4 million tonnes.

BEST Supply Chain Management -The total number of orders fulfilled by Cloud OFCs increased by 11.7% YoY to 136.1 million in the fourth quarter of 2020 and the total number of orders fulfilled by franchised Cloud OFCs increased by 15.1% YoY to 67.1 million. The number of franchised OFCs increased by 22.2% YoY to 358 in the fourth quarter of 2020. In fiscal year 2020, the total number of orders fulfilled by Cloud OFCs increased by 21.4% YoY to 433.2 million and the total number of orders fulfilled by franchised Cloud OFCs increased by 35.9% YoY to 214.7 million. In the fourth quarter of 2020, gross margin for Supply Chain Management decreased by 6.3 ppts YoY, primarily due to one-off costs incurred by closing down Store+-related operations, and pricing pressure associated with certain legacy key account customers, which are in the process of being discontinued.

BEST Global -In the fourth quarter of 2020, Global continued to expand cross-border and Southeast Asia business and margin improvement. In the fourth quarter, parcel volume in Thailand increased by 25.0% QoQ to 12.3 million, while parcel volume in Vietnam increased by 35.9% QoQ to 14 million. Global's gross margin expanded by 7.4 ppts YoY. In fiscal year 2020, total parcel volume in Thailand increased by 612.8% YoY to 37.3 million, and total parcel volume in Vietnam increased by 852.0% YoY to 33.8 million.

BEST UCargo -As of December 31, 2020, the number of registered drivers on the UCargo mobile app increased by 70.6% YoY to over 320,000. In the fourth quarter, the total number of transactions on the trucking brokerage platform increased by 19.0% YoY to 255,139. In fiscal year 2020, the total number of transactions on the trucking brokerage platform increased by 19.2% YoY to 738,131.

BEST Capital -As of December 31, 2020, BEST Capital had provided financing solutions to 13,410 trucks in total.

BEST Store+ - The Company has completed the wind-down of its Store+ business in accordance with the announcement on November 15, 2020.

Key Operational Metrics

Three Months Ended % Change YoY

December 31, December 31, December 31, 2019 vs 2020 vs 2018 2019 2020 2018 2019Express Parcel Volume (in '000) 1,868,489 2,437,959 2,585,249 30.5% 6.0%

Freight Volume (Tonne in '000) 1,605 2,097 2,623 30.6% 25.1%

Supply Chain Management 83,623 121,907 136,126 45.8% 11.7%Orders Fulfilled (in '000)

UCargo Number of 196 214 255 9.6% 19.0%Transactions (in '000)

Global Parcel Volume in 14 5,157 27,891 37,112% 441%Southeast Asia (in '000)

Fiscal Year Ended % Change YoY

December 31, December 31, December 31, 2019 vs 2020 vs 2018 2019 2020 2018 2019Express Parcel Volume (in '000) 5,470,092 7,576,204 8,535,133 38.5% 12.7%

Freight Volume (Tonne in '000) 5,430 6,980 8,392 28.5% 20.2%

Supply Chain Management 246,717 356,905 433,224 44.7% 21.4%Orders Fulfilled (in '000)

UCargo Number of 466 619 738 32.8% 19.2%Transactions (in '000)

Global Parcel Volume in 14 8,785 73,586 63,293% 738%Southeast Asia (in '000)

FINANCIAL RESULTS

For the Fourth Quarter Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

Revenue

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

Table 1 - Breakdown of Revenue by Business Segment

Three Months Ended

December 31, 2019 December 31, 2020

(In '000, except for %) RMB % of RMB US$ % of % Change Revenue Revenue YoY

Express 6,896,868 68.0% 5,822,926 892,402 63.0% (15.6%)

Freight 1,555,229 15.3% 1,620,388 248,335 17.5% 4.2%

Supply Chain 608,583 6.0% 542,332 83,116 5.9% (10.9%)Management

Global 135,423 1.3% 253,351 38,828 2.7% 87.1%

UCargo 908,887 8.9% 957,865 146,799 10.3% 5.4%

Capital 51,741 0.5% 58,497 8,965 0.6% 13.1%

Total Revenue 10,156,731 100.0% 9,255,359 1,418,445 100.0% (8.9%)

* Express Service Revenue decreased by 15.6% YoY to RMB5,822.9 million (US$892.4 million) from RMB6,896.9 million, primarily due to a 20.4% YoY decrease in ASP per parcel, partially offset by a 6.0% YoY increase in parcel volume. The decrease in ASP per parcel is primarily attributable to competitive market dynamics. * Freight Service Revenue increased by 4.2% YoY to RMB1,620.4 million (US$248.3 million) from RMB1,555.2 million, primarily due to a 25.1% YoY increase in freight volume, partially offset by a 16.7% YoY decrease in ASP per tonne. * Supply Chain Management Service Revenue decreased by 10.9% YoY to RMB542.3 million (US$83.1 million) from RMB608.6 million, primarily due to pricing pressure associated with certain legacy key account customers, partially offset by a 11.7% YoY increase in the total number of orders fulfilled by Cloud OFCs. * Global Service Revenue increased by 87.1% YoY to RMB253.4 million (US$38.8 million) from RMB135.4 million, primarily due to strong growth in parcel volumes in Southeast Asia. * UCargo Service Revenue increased by 5.4% YoY to RMB957.9 million (US$146.8 million) from RMB908.9 million, primarily due to an increased number of total transactions. * Capital Service Revenue increased by 13.1% YoY to RMB58.5 million (US$9.0 million) from RMB51.7 million.

Cost of Revenue

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

Table 2 - Breakdown of Cost of Revenue by Business Segment

Three Months Ended % of Revenue December 31, 2019 December 31, 2020 Change

(In '000, except for %) RMB % of RMB US$ % of YoY Revenue Revenue

Express (6,489,669) 94.1% (5,900,035) (904,220) 101.3% 7.2ppt

Freight (1,468,828) 94.4% (1,530,702) (234,590) 94.5% 0.1ppt

Supply Chain (577,977) 95.0% (549,212) (84,170) 101.3% 6.3pptManagement

Global (156,028) 115.2% (273,222) (41,873) 107.8% (7.4ppt)

UCargo (896,662) 98.7% (945,577) (144,916) 98.7% 0.0ppt

Capital (6,045) 11.7% (6,557) (1,005) 11.2% (0.5ppt)

Total Cost of Revenue (9,595,209) 94.5% (9,205,305) (1,410,774) 99.5% 5.0ppt

Cost of Revenue was RMB9,205.3 million (US$1,410.8 million) or 99.5% of revenue in the fourth quarter of 2020, compared to RMB9,595.2 million or 94.5% of revenue in the same quarter of 2019. The increase of 5.0 ppts in cost of revenue as a percentage of revenue was primarily attributable to a steeper decrease in ASP than unit cost reduction.

Table 3 - Breakdown of Average Cost Per Parcel and Average Cost Per Tonne

Three Months Ended % Change

(in RMB) December 31, 2019 December 31, 2020 YoY

Express:

Average Cost Per Parcel 2.66 2.28 (14.3%)

Average Transportation Cost Per Parcel 0.75 0.66 (12.0%)

Average Labor Cost Per Parcel 0.22 0.21 (4.5%)

Average Lease Cost Per Parcel 0.09 0.09 0.0%

Average Other Cost Per Parcel 0.12 0.09 (25.0%)

Average Last-mile Cost Per Parcel 1.48 1.23 (16.9%)

Freight:

Average Cost Per Tonne 700.6 583.5 (16.7%)

* Express Service Average Cost per Parcel decreased by 14.3%, primarily due to improved operating efficiency and economies of scale. * Freight Service Average Cost per Tonne decreased by 16.7% YoY, primarily due to improved operating efficiency, network optimization and economies of scale.

Gross Profitwas RMB50.1 million (US$7.7 million) in the fourth quarter of 2020, compared to gross profit of RMB561.5 million in the same quarter of 2019; Gross Margin was 0.5%, compared to 5.5% in the same quarter of 2019.

Operating Expenses

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

Table 4 - Breakdown of Operating Expenses and Adjusted Operating Expenses byCategory

Three Months Ended

December 31, 2019 December 31, 2020

% of(In '000, except for %) RMB % of RMB US$ % of Revenue Revenue Revenue Change YoY

Selling, General and Administrative (400,643) 3.9% (498,716) (76,432) 5.4% 1.5pptExpenses

Adjusted for (26,366) 0.2% (23,864) (3,657) 0.3% 0.1ppt SBC Expenses

Adjusted Selling, General and (374,277) 3.7% (474,852) (72,775) 5.1% 1.4ppt Administrative Expenses

Research and (52,076) 0.5% (53,788) (8,243) 0.6% 0.1ppt Development Expenses

Adjusted for (354) 0.0% (1,785) (274) 0.0% 0.0ppt SBC Expenses

Adjusted Research and (51,722) 0.5% (52,003) (7,969) 0.6% 0.1ppt Development Expenses

Total Operating Expenses (452,719) 4.4% (552,504) (84,675) 6.0% 1.6ppt

Adjusted for (26,720) 0.2% (25,649) (3,931) 0.3% 0.1ppt SBC Expenses

Adjusted Total (425,999) 4.2% (526,855) (80,744) 5.7% 1.5ppt Operating Expenses

Selling, General and Administrative Expenses were RMB498.7 million (US$76.4 million) or 5.4% of revenue in the fourth quarter of 2020, compared to RMB400.6 million or 3.9% of revenue in the same quarter of 2019. The increase in selling, general and administrative expenses was primarily attributable to additional accrued provision for certain trade receivables due to the pandemic and losses on disposal of fixed assets due to an upgrade of Express equipment.

Research and Development Expenses were RMB53.8 million (US$8.2 million) or 0.6% of revenue in the fourth quarter of 2020, compared to RMB52.1 million, or 0.5% of revenue in the same quarter of 2019.

Share-based Compensation ("SBC") Expenses included in the cost and expense items above in the fourth quarter of 2020 were RMB26.1 million (US$4.0 million), compared to RMB27.4 million in the same quarter of 2019. In the fourth quarter of 2020, RMB0.5 million (US$0.1 million) was allocated to cost of revenue, RMB0.5 million (US$0.1 million) was allocated to selling expenses, RMB23.3 million (US$3.6 million) was allocated to general and administrative expenses, and RMB1.8 million (US$0.3 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss

Net Lossin the fourth quarter of 2020 was RMB492.9 million (US$75.5 million), compared to net income of RMB132.6 million in the same period of 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Net Loss in the fourth quarter of 2020 was RMB475.7 million (US$72.9 million), compared to non-GAAP net income of RMB146.8 million in the same quarter of 2019.

The following table sets forth a breakdown of non-GAAP net loss for the three months ended December 31, 2020 by segment.

Table 5 - Breakdown of non-GAAP Net Loss by Segment

Three Months Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[7] Total

Non-GAAP Net (262,178) 13,841 (77,198) (58,433) (36,913) 12,920 (67,717) (475,678)Income/(Loss)

^[7] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in the fourth quarter of 2020 was negative RMB1.26(US$0.19), based on a weighted average of 385.6 million diluted shares outstanding during the quarter. This is compared to RMB0.36 on a weighted average of 392.8 million diluted shares outstanding in the same period of 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Diluted EPS in the fourth quarter of 2020 was negative RMB1.22(US$0.19), compared to RMB0.39 in the same period of 2019. A reconciliation of non-GAAP diluted EPS to diluted EPS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDAin the fourth quarter of 2020 was negative RMB288.0 million (US$44.1 million), compared to RMB259.2 million in same quarter in 2019. Adjusted EBITDA Margin was negative 3.1% in the fourth quarter of 2020, compared to 2.6% in the same quarter in 2019.

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the three months ended December 31, 2020 by segment.

Table 6 - Breakdown of Adjusted EBITDA and Adjusted EBITDA Margin by Segment

Three Months Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^[8] Total

Adjusted EBITDA (158,255) 31,962 (67,323) (54,680) (34,508) 18,528 (23,694) (287,970)

Adjusted EBITDA (2.7%) 2.0% (12.4%) (21.6%) (3.6%) 31.7% - (3.1%)Margin

^[8] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Cash and Cash Equivalents, Restricted Cash and Short-term Investments

As of December 31, 2020, cash and cash equivalents, restricted cash and short-term investments were RMB4,464.2 million (US$684.2 million), compared to RMB5,005.5 million as of December 31, 2019.

Net Cash Generated From Operating Activities

Net cash generated from operating activities was RMB346.9 million (US$53.2 million), compared to RMB606.2 million in the same period of 2019. The decrease in net cash generated from operating activities was mainly due to decreasing ASP per parcel for the Express business segment.

Capital Expenditures ("CAPEX")

CAPEX was RMB331.1 million (US$50.7 million), or 3.6% of total revenue in the fourth quarter ended December 31, 2020, compared to CAPEX of RMB387.6 million, or 3.8% of total revenue, in the same period of 2019.

For the Fiscal Year Ended December 31, 2020:

Results presented herein exclude Store+-related discontinued operations

Revenue

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

Table 7 - Breakdown of Revenue by Business Segment

Fiscal Year Ended

December 31, 2019 December 31, 2020

(In '000, except for %) RMB % of RMB US$ % of % Change Revenue Revenue YoY

Express 21,822,442 67.5% 19,417,559 2,975,871 64.7% (11.0%)

Freight 5,224,355 16.1% 5,156,551 790,276 17.2% (1.3%)

Supply Chain 2,195,759 6.8% 1,912,323 293,076 6.4% (12.9%)Management

Global 336,874 1.0% 777,656 119,181 2.6% 130.8%

UCargo 2,574,054 8.0% 2,519,919 386,194 8.4% (2.1%)

Capital 205,203 0.6% 211,021 32,340 0.7% 2.8%

Total Revenue 32,358,687 100.0% 29,995,029 4,596,938 100.0% (7.3%)

* Express Service Revenue decreased by 11.0% YoY to RMB19,417.6 million (US$2,975.9 million) from RMB21,822.4 million, primarily due to a 21.0% YoY decrease in ASP per parcel, partially offset by a 12.7% YoY increase in parcel volume. The decrease in ASP per parcel is primarily attributable to competitive market dynamics. * Freight Service Revenue decreased by 1.3% YoY to RMB5,156.6 million (US$790.3 million) from RMB5,224.4 million, primarily due to a 17.9% YoY decrease in ASP per tonne, partially offset by a 20.2% YoY increase in freight volume. * Supply Chain Management Service Revenue decreased by 12.9% YoY to RMB1,912.3 million (US$293.1 million) from RMB2,195.8 million, primarily due to pricing pressure associated with certain legacy key account customers, partially offset by a 21.4% YoY increase in the total number of orders fulfilled by Cloud OFCs. * Global Service Revenue increased by 130.8% YoY to RMB777.7 million (US$119.2 million) from RMB336.9 million, primarily due to strong growth in parcel volumes in Southeast Asia. * UCargo Service Revenue decreased by 2.1% YoY to RMB2,519.9 million (US$386.2 million) from RMB2,574.1 million. * Capital Service Revenue increased by 2.8% YoY to RMB211.0 million (US$32.3 million) from RMB205.2 million.

Cost of Revenue

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

Table 8 - Breakdown of Cost of Revenue by Business Segment

Fiscal Year Ended % of Revenue December 31, 2019 December 31, 2020 Change

(In '000, RMB % of RMB US$ % of YoYexcept for %) Revenue Revenue

Express (20,793,370) 95.3% (19,470,937) (2,984,052) 100.3% 5.0ppt

Freight (4,934,937) 94.5% (5,063,236) (775,975) 98.2% 3.7ppt

Supply Chain (2,052,006) 93.5% (1,846,901) (283,050) 96.6% 3.1pptManagement

Global (371,404) 110.3% (875,733) (134,212) 112.6% 2.3ppt

UCargo (2,517,642) 97.8% (2,473,857) (379,135) 98.2% 0.4ppt

Capital (52,001) 25.3% (26,225) (4,019) 12.4% (12.9ppt)

Total Cost of (30,721,360) 94.9% (29,756,889) (4,560,443) 99.2% 4.3pptRevenue

Cost of Revenue was RMB29,756.9 million (US$4,560.4 million) or 99.2% of revenue in fiscal year 2020, compared to RMB30,721.4 million or 94.9% of revenue in fiscal year 2019. The increase of 4.3 ppts in cost of revenue as a percentage of revenue was primarily attributable to intensified Express market competition and a pricing lag after the PRC government reinstated highway tolls. As a result, the decrease in ASP outpaced reduction in unit cost in Express and Freight businesses.

Table 9 - Breakdown of Average Cost Per Parcel and Average Cost Per Tonne

Fiscal Year Ended % Change

(in RMB) December 31, 2019 December 31, 2020 YoY

Express:

Average Cost Per Parcel 2.74 2.28 (16.9%)

Average Transportation Cost Per Parcel 0.75 0.64 (14.7%)

Average Labor Cost Per Parcel 0.24 0.21 (12.5%)

Average Lease Cost Per Parcel 0.10 0.10 0.0%

Average Other Cost Per Parcel 0.13 0.10 (23.1%)

Average Last-mile Cost Per Parcel 1.52 1.23 (19.1%)

Freight:

Average Cost Per Tonne 707.0 603.4 (14.7%)

* Express Service Average Cost per Parcel decreased by 16.9%, primarily due to improved operating efficiency and economies of scale. * Freight Service Average Cost per Tonne decreased by 14.7% YoY, primarily due to improved operating efficiency, network optimization and economies of scale.

Gross Profitwas RMB238.1 million (US$36.5 million) in fiscal year 2020, compared to gross profit of RMB1,637.3 million in fiscal year 2019; Gross Margin was 0.8%, compared to 5.1% in fiscal year 2019.

Operating Expenses

The following table sets forth a breakdown of operating expenses and adjusted operating expenses by category for the periods indicated.

Table 10 - Breakdown of Operating Expenses and Adjusted Operating Expenses byCategory

Fiscal Year Ended

December 31, 2019 December 31, 2020

% of % of % of Revenue(In '000, except for %) RMB Revenue RMB US$ Revenue Change YoY

Selling, General and (1,365,657) 4.2% (1,740,134) (266,688) 5.8% 1.6ppt Administrative Expenses

Adjusted for (82,714) 0.2% (119,488) (18,312) 0.4% 0.2ppt SBC Expenses

Adjusted Selling, General and (1,282,943) 4.0% (1,620,646) (248,376) 5.4% 1.4ppt Administrative Expenses

Research and (204,234) 0.6% (191,417) (29,336) 0.6% 0.0ppt Development Expenses

Adjusted for (7,209) 0.0% (7,763) (1,190) 0.0% 0.0ppt SBC Expenses

Adjusted Research and (197,025) 0.6% (183,654) (28,146) 0.6% 0.0ppt Development Expenses

Total Operating Expenses (1,569,891) 4.8% (1,931,551) (296,024) 6.4% 1.6ppt

Adjusted for (89,923) 0.2% (127,251) (19,502) 0.4% 0.2ppt SBC Expenses

Adjusted Total (1,479,968) 4.6% (1,804,300) (276,522) 6.0% 1.4ppt Operating Expenses

Selling, General and Administrative Expenses were RMB1,740.1 million (US$266.7 million) or 5.8% of revenue in fiscal year 2020, compared to RMB1,365.7 million or 4.2% of revenue in fiscal year 2019. The increase in selling, general and administrative expenses was primarily attributable to increase in staff costs of Southeast Asia business, additional accrued provision for certain trade receivables due to the pandemic and losses on disposal of fixed assets due to an upgrade of Express's equipment.

Research and Development Expenses were RMB191.4 million (US$29.3 million) or 0.6% of revenue in fiscal year 2020, compared to RMB204.2 million, or 0.6% of revenue in fiscal year 2019. The decrease in research and development expenses was primarily attributable to capitalization of certain research and development expenditures to intangible assets.

Share-based Compensation ("SBC") Expenses included in the cost and expense items above in fiscal year 2020 were RMB129.7 million (US$19.9 million), compared to RMB91.7 million in fiscal year 2019. In fiscal year 2020, RMB2.4 million (US$0.4 million) was allocated to cost of revenue, RMB7.7 million (US$1.2 million) was allocated to selling expenses, RMB111.8 million (US$17.1 million) was allocated to general and administrative expenses, and RMB7.8 million (US$1.2 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss

Net Lossin fiscal year 2020 was RMB1,683.1 million (US$257.9 million), compared to net income of RMB172.7 million in fiscal year 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Net Loss in fiscal year 2020 was RMB1,569.3 million (US$240.5 million), compared to non-GAAP net income of RMB253.9 million in fiscal year 2019.

The following table sets forth a breakdown of non-GAAP net loss for fiscal year 2020 by segment.

Table 11 - Breakdown of non-GAAP Net Loss by Segment

Fiscal Year Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[9] Total

Non-GAAP Net (741,117) (188,703) (164,066) (239,926) (113,638) 94,492 (216,365) (1,569,323)Income/(Loss)

^[9] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in fiscal year 2020 was negative RMB4.28(US$0.66), based on a weighted average of 387.5 million diluted shares outstanding during fiscal year 2020. This is compared to RMB0.49 on a weighted average of 388.5 million diluted shares outstanding in fiscal year 2019. Excluding SBC expenses, amortization of intangible assets resulting from business acquisitions and gain from appreciation of investment (if any for a given period), Non-GAAP Diluted EPS in fiscal year 2020 was negative RMB3.98(US$0.61), compared to RMB0.70 in fiscal year 2019. A reconciliation of non-GAAP Diluted EPS to Diluted EPS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDAwas negative RMB935.1 million (US$143.3 million) in fiscal year 2020, compared to RMB730.4 million in fiscal year 2019. Adjusted EBITDA Margin was negative 3.1% in fiscal year 2020, compared to 2.3% in fiscal year 2019.

Adjusted EBITDA and Adjusted EBITDA Margin by Segment

The following table sets forth a breakdown of adjusted EBITDA and adjusted EBITDA margin for the in fiscal year 2020 by segment.

Table 12 - Breakdown of Adjusted EBITDA and Adjusted EBITDA Margin by Segment

Fiscal Year Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[10] Total

Adjusted EBITDA (379,039) (124,060) (122,123) (227,583) (109,621) 114,700 (87,373) (935,099)

Adjusted EBITDA (2.0%) (2.4%) (6.4%) (29.3%) (4.4%) 54.4% - (3.1%)Margin

^[10] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Net Cash Generated From Operating Activities

Net cash generated from operating activities in fiscal year 2020 was RMB11.2 million (US$1.7 million), compared to RMB1,131.2 million of net cash generated from operating activities in fiscal year 2019. The decrease in net cash generated from operating activities was mainly due to decreased ASP for the Express and Freight segments.

Capital Expenditures ("CAPEX")

CAPEX was RMB1,587.7 million (US$243.3 million), or 5.3% of total revenue in fiscal year 2020, compared to CAPEX of RMB1,497.7 million, or 4.6% of total revenue in fiscal year 2019.

SHARES OUTSTANDING

As of the date of this press release, the Company had approximately 387.7 million ordinary shares outstanding[11]. Each American Depositary Share represents one Class A ordinary share.

^[11] The total number of shares outstanding excludes shares reserved forfuture issuances upon exercise or vesting of awards granted under the Company'sshare incentive plans.

FINANCIAL GUIDANCE

Based on current market conditions and current operations, the Company expects its revenue for the full fiscal year of 2021 to be between RMB34 billion and RMB36 billion. This forecast reflects management's current and preliminary expectation, which is subject to change.

MANAGEMENT CHANGE

Mr. Bo Liu, senior vice president and general manager of BEST Store+ of the Company, has left the Company in late February 2021.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 9:00 pm U.S. Eastern Time on March 10, 2021 (10:00 am Beijing Time on March 11, 2021), to discuss its financial results and operating performance for the fourth quarter and fiscal year 2020.

Participants may access the call by dialing the following numbers:

United States: +1-888-317-6003

Hong Kong: 800-963976 or +852-5808-1995

Mainland China: 4001-206115

International: +1-412-317-6061

Participant Elite Entry Number: 9453989

A replay of the conference call will be accessible through March 17, 2021 by dialing the following numbers:

United States: +1-877-344-7529

International: +1-412-317-0088

Replay Access Code: 10152635

Please visit the Company's investor relations website to view the earnings release prior to the conference call. A live and archived webcast of the conference call and a corporate presentation will be available at the same site.

ABOUT BEST INC.

BEST Inc. (NYSE: BEST) is a leading integrated smart supply chain solutions and logistics services provider in China. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-add services, including express and freight delivery, supply chain management and last-mile services, truckload service brokerage, international logistics and financial services. BEST's mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain. For more information, please visit: http://www.best-inc.com/en/.

For investor and media inquiries, please contact:

BEST Inc. Investor relations team ir@best-inc.com

The Piacente Group, Inc.Yang SongTel: +86-10-6508-0677E-mail: best@tpg-ir.com

The Piacente Group, Inc. Brandi PiacenteTel: +1-212-481-2050 E-mail:??best@tpg-ir.com

SAFE HARBOR STATEMENT

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as BEST's strategic and operational plans, contain forward-looking statements. BEST may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about BEST's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: BEST's goals and strategies; BEST's future business development, results of operations and financial condition; BEST 's ability to maintain and enhance its ecosystem; BEST 's ability to continue to innovate, meet evolving market trends, adapt to changing customer demands and maintain its culture of innovation; fluctuations in general economic and business conditions in China and other countries in which BEST operates, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in BEST's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and BEST does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

USE OF NON-GAAP FINANCIAL MEASURES

In evaluating its business, BEST considers and uses non-GAAP measures, such as non-GAAP net loss/income, non-GAAP net loss/profit margin, adjusted EBITDA, adjusted EBITDA margin, EBITDA, adjusted selling expenses, adjusted general and administrative expenses, adjusted research and development expenses, and non-GAAP Diluted EPS, as supplemental measures in the evaluation of the Company's operating results and in the Company's financial and operational decision-making. The Company believes these non-GAAP financial measures that help identify underlying trends in the Company's business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in loss from operations and net loss. The Company believes that these non-GAAP financial measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision-making. The presentation of these 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 U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures" in the results announcement.

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Summary of Unaudited Condensed Consolidated Income Statements

(In Thousands)

Three Months Ended December 31, Fiscal Year Ended December 31,

2019 2020 2019 2020

RMB RMB US$ RMB RMB US$

Revenue

Express 6,896,868 5,822,926 892,402 21,822,442 19,417,559 2,975,871

Freight 1,555,229 1,620,388 248,335 5,224,355 5,156,551 790,276

Supply Chain Management 608,583 542,332 83,116 2,195,759 1,912,323 293,076

Global 135,423 253,351 38,828 336,874 777,656 119,181

UCargo 908,887 957,865 146,799 2,574,054 2,519,919 386,194

Capital 51,741 58,497 8,965 205,203 211,021 32,340

Total Revenue 10,156,731 9,255,359 1,418,445 32,358,687 29,995,029 4,596,938

Cost of Revenue

Express (6,489,669) (5,900,035) (904,220) (20,793,370) (19,470,937) (2,984,052)

Freight (1,468,828) (1,530,702) (234,590) (4,934,937) (5,063,236) (775,975)

Supply Chain Management (577,977) (549,212) (84,170) (2,052,006) (1,846,901) (283,050)

Global (156,028) (273,222) (41,873) (371,404) (875,733) (134,212)

UCargo (896,662) (945,577) (144,916) (2,517,642) (2,473,857) (379,135)

Capital (6,045) (6,557) (1,005) (52,001) (26,225) (4,019)

Total Cost of Revenue (9,595,209) (9,205,305) (1,410,774) (30,721,360) (29,756,889) (4,560,443)

Gross Profit 561,522 50,054 7,671 1,637,327 238,140 36,495

Selling Expenses (200,554) (124,967) (19,152) (432,939) (477,902) (73,242)

General and Administrative (200,089) (373,749) (57,280) (932,718) (1,262,232) (193,446) Expenses

Research and (52,076) (53,788) (8,243) (204,234) (191,417) (29,336)Development Expenses

Total Operating Expenses (452,719) (552,504) (84,675) (1,569,891) (1,931,551) (296,024)

Loss from Operations 108,803 (502,450) (77,004) 67,436 (1,693,411) (259,529)

Interest Income 24,149 16,621 2,547 95,440 74,727 11,452

Interest Expense (26,719) (53,473) (8,195) (79,486) (174,607) (26,760)

Foreign Exchange Loss (2,607) (908) (139) (4,375) (8,243) (1,263)

Other Income 55,371 55,916 8,570 145,853 165,346 25,340

Other Expense (19,342) (2,307) (354) (31,784) (24,576) (3,766)

Income/(Loss) before Income Tax and Share of Net Loss of 139,655 (486,601) (74,575) 193,084 (1,660,764) (254,526) Equity Investees

Income Tax Expense (6,883) (6,268) (961) (20,027) (22,124) (3,391)

Income/(Loss) before Share of 132,772 (492,869) (75,536) 173,057 (1,682,888) (257,917) Net loss of Equity Investees

Share of Net Loss of Equity (172) (66) (10) (355) (180) (28) Investees

Net Income/(Loss) from 132,600 (492,935) (75,546) 172,702 (1,683,068) (257,945)continuing operations

Net loss from discontinued (89,190) (137,129) (21,016) (391,770) (368,156) (56,422) operations

Net Income/(Loss) 43,410 (630,064) (96,562) (219,068) (2,051,224) (314,367)

Net Loss from continuing operations attributable to non- (8,008) (5,326) (816) (16,652) (25,716) (3,941) controlling interests

Net Income/(Loss) attributable to 51,418 (624,738) (95,746) (202,416) (2,025,508) (310,426) Best Inc.

Summary of Unaudited Condensed Consolidated Balance Sheets

(in thousands)

As of December 31, 2019 As of December 31, 2020

RMB RMB US$

Assets

Current Assets

Cash and Cash Equivalents 1,985,413 1,383,317 212,003

Restricted Cash 1,786,832 2,102,426 322,211

Accounts and Notes Receivables 1,228,995 992,410 152,093

Inventories 106,483 44,133 6,764

Prepayments and Other Current Assets 2,728,812 3,318,736 508,618

Short-term Investments 1,057,598 268,647 41,172

Amounts Due from Related Parties 246,758 255,917 39,221

Lease Rental Receivables 483,363 497,127 76,188

Assets held for sale 64,195 483,893 74,160

Total Current Assets 9,688,449 9,346,606 1,432,430

Non-current Assets

Property and Equipment, Net 2,924,404 4,079,235 625,170

Intangible Assets, Net 20,408 12,198 1,869

Long-term Investments 230,855 221,426 33,935

Goodwill 289,319 295,759 45,327

Non-current Deposits 118,629 129,645 19,869

Other Non-current Assets 346,645 543,949 83,364

Restricted Cash 175,700 709,848 108,789

Lease Rental Receivables 993,260 647,678 99,261

Operating Lease Right-of-use Assets 4,209,014 3,841,813 588,784

Assets held for sale 496,173 - -

Total non-current Assets 9,804,407 10,481,551 1,606,368

Total Assets 19,492,856 19,828,157 3,038,798

Liabilities and Shareholders' Equity

Current Liabilities

Securitization Debt 104,899 95,149 14,582

Short-term Bank Loans 2,510,500 3,082,537 472,419

Accounts and Notes Payable 3,391,383 4,144,711 635,205

Income Tax Payable 7,358 14,550 2,230

Customer Advances and Deposits and 1,488,630 1,526,051 233,878 Deferred Revenue

Accrued Expenses and Other Liabilities 2,006,049 2,466,460 378,002

Financing Lease Liabilities 1,363 1,581 242

Operating Lease Liabilities 975,475 1,038,215 159,113

Amounts Due to Related Parties 9,769 34,651 5,310

Liabilities held for sale 74,242 167,906 25,733

Total Current Liabilities 10,569,668 12,571,811 1,926,714

Summary of Unaudited Condensed Consolidated Balance Sheets (Cont'd)

(In Thousands)

As of December 31, 2019 As of December 31, 2020

RMB RMB US$

Non-current Liabilities

Convertible senior notes held by

related parties 680,104 1,617,846 247,946

Convertible Senior Notes held by third 680,104 642,121 98,409 parties

Operating Lease Liabilities 3,388,908 3,014,945 462,061

Financing Lease Liabilities 2,072 2,698 413

Deferred Tax Liabilities 828 - -

Other Non-current Liabilities 137,184 175,584 26,909

Long-term Bank Loans - 78,548 12,038

Liabilities held for sale 118,704 - -

Total Non-current Liabilities 5,007,904 5,531,742 847,776

Total Liabilities 15,577,572 18,103,553 2,774,490

Shareholders' Equity

Ordinary Shares 25,988 25,988 3,983

Treasury Shares - (211,352) (32,391)

Additional Paid-In Capital 19,353,400 19,487,232 2,986,549

Statutory reserves 7,865 8,038 1,232

Accumulated Deficit (15,629,537) ?????(17,710,964)^[12] (2,714,324)

Accumulated Other 163,196 151,677 23,246 Comprehensive Income

BEST Inc. Shareholders' Equity 3,920,912 1,750,619 268,295

Non-controlling Interests (5,628) (26,015) (3,987)

Total Shareholders' Equity 3,915,284 1,724,604 264,308

Total Liabilities and 19,492,856 19,828,157 3,038,798 Shareholders' Equity

^[12] Including accumulated accretion to redemption value and deemed dividendin relation to redeemable convertible preferredshares of RMB9,493,807, and accumulated loss from operations of RMB8,217,157.

Summary of Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Three Months Ended December 31, Fiscal Year Ended December 31,

2019 2020 2019 2020

RMB RMB US$ RMB RMB US$

Net cash generated from continuing 606,189 346,937 53,172 1,131,226 11,188 1,715 operating activities

Net cash used in discontinued (119,385) (122,616) (18,792) (278,393) (242,423) (37,153) operating activities

Net cash Generated from/(Used in) 486,804 224,321 34,380 852,833 (231,235) (35,438) operating activities

Net cash used in continuing (532,859) (162,881) (24,963) (1,918,474) (872,353) (133,694) Investing Activities

Net cash generated from/(used in) 3,934 (1,226) (188) 5,992 (580) (89) discontinued Investing activities

Net cash used in investing (528,925) (164,107) (25,151) (1,912,482) (872,933) (133,783) activities

Net cash generated from/(used in) 373,080 (172,599) (26,452) 2,377,212 1,760,684 269,837 continuing financing activities

Net cash generated from/(used in) 80,000 (17,500) (2,682) (365,400) (212,500) (32,567) discontinued financing activities

Net cash generated from/(used in) 453,080 (190,099) (29,134) 2,011,812 1,548,184 237,270 financing activities

Exchange Rate Effect on Cash, Cash (36,216) (110,778) (16,977) 5,644 (192,110) (29,442) Equivalents, and Restricted Cash

Net Increase/(Decrease) in Cash and Cash Equivalents, and 374,743 (240,663) (36,882) 957,807 251,906 38,607 Restricted Cash

Cash and Cash Equivalents, and Restricted Cash at Beginning 3,582,472 4,449,784 681,959 2,999,408 3,957,215 606,470 of Period

Cash and Cash Equivalents, 3,957,215 4,209,121 645,077 3,957,215 4,209,121 645,077 and Restricted Cash at End of Period

Less: Cash and Cash Equivalents, and Restricted Cash held for sales 9,270 13,530 2,074 9,270 13,530 2,074 at end of the Period

Cash and Cash Equivalents, and Restricted Cash from continuing 3,947,945 4,195,591 643,003 3,947,945 4,195,591 643,003 operations at End of Period

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

The table below sets forth a reconciliation of the Company's net loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:

Table 13 - Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

Three Months Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[13] Total

Net Income/(Loss) (263,884) 11,468 (79,027) (60,688) (37,538) 12,862 (76,128) (492,935)

Add:

Depreciation & 102,688 18,121 10,095 3,753 2,405 355 7,171 144,588Amortization

Interest Expense - - - - - - 53,473 53,473

Income Tax 1,235 - (220) - - 5,253 - 6,268Expense/(Benefit)

Subtract:

Interest Income - - - - - - (16,621) (16,621)

EBITDA (159,961) 29,589 (69,152) (56,935) (35,133) 18,470 (32,105) (305,227)

Add:

Share-based Compensation 1,706 2,373 1,829 2,255 625 58 17,261 26,107 Expenses

Subtract:

Gain fromappreciation of - - - - - - (8,850) (8,850)investments

Adjusted EBITDA (158,255) 31,962 (67,323) (54,680) (34,508) 18,528 (23,694) (287,970)

Adjusted EBITDA (2.7%) 2.0% (12.4%) (21.6%) (3.6%) 31.7% - (3.1%)Margin

^[13] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Three Months Ended December 31, 2019

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[14] Total

Net Income/(Loss) 261,633 16,097 (68,105) (64,395) (14,457) 34,705 (32,878) 132,600

Add:

Depreciation & 70,267 14,088 6,221 2,676 48 (134) 10,698 103,864Amortization

Interest Expense - - - - - - 26,719 26,719

Income Tax 1,701 21 215 (213) - 5,172 (13) 6,883Expense/(Benefit)

Subtract:

Interest Income - - - - - - (24,149) (24,149)

EBITDA 333,601 30,206 (61,669) (61,932) (14,409) 39,743 (19,623) 245,917

Add:

Share-based Compensation 4,237 2,555 3,417 2,587 766 72 13,814 27,448 Expenses

Subtract:

Gain fromappreciation of - - - - - - (14,155) (14,155)investments

Adjusted EBITDA 337,838 32,761 (58,252) (59,345) (13,643) 39,815 (19,964) 259,210

Adjusted EBITDA 4.9% 2.1% (9.6%) (43.8%) (1.5%) 77.0% - 2.6%Margin

^[14] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Fiscal Year Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[15] Total

Net Income/(Loss) (755,305) (199,826) (175,072) (251,511) (116,782) 93,981 (278,553) (1,683,068)

Add:

Depreciation & 357,507 64,643 42,121 15,955 4,017 1,647 29,112 515,002Amortization

Interest Expense - - - - - - 174,607 174,607

Income Tax 4,571 (178) (830) 18,561 22,124Expense/(Benefit)

Subtract:

Interest Income - - - - - - (74,727) (74,727)

EBITDA (393,227) (135,183) (133,129) (236,386) (112,765) 114,189 (149,561) (1,046,062)

Add:

Share-based Compensation 14,188 11,123 11,006 8,803 3,144 511 80,876 129,651 Expenses

Subtract:

Gain fromappreciation of - - - - - - (18,688) (18,688)investments

Adjusted EBITDA (379,039) (124,060) (122,123) (227,583) (109,621) 114,700 (87,373) (935,099)

Adjusted EBITDA (2.0%) (2.4%) (6.4%) (29.3%) (4.4%) 54.4% - (3.1%)Margin

^[15] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Fiscal Year Ended December 31, 2019

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[16] Total

Net Income/(Loss) 461,490 18,684 (122,312) (167,600) (22,056) 125,966 (121,470) 172,702

Add:

Depreciation & 325,950 53,684 48,405 9,510 234 1,225 37,093 476,101Amortization

Interest Expense - - - - - - 79,486 79,486

Income Tax 1,701 21 357 (1,027) - 18,988 (13) 20,027Expense/(Benefit)

Subtract:

Interest Income - - - - - - (95,440) (95,440)

EBITDA 789,141 72,389 (73,550) (159,117) (21,822) 146,179 (100,344) 652,876

Add:

Share-based Compensation 20,209 8,531 11,110 7,480 2,498 247 41,618 91,693 Expenses

Subtract:

Gain fromappreciation of - - - - - - (14,155) (14,155)investments

Adjusted EBITDA 809,350 80,920 (62,440) (151,637) (19,324) 146,426 (72,881) 730,414

Adjusted EBITDA 3.7% 1.5% (2.8%) (45.0%) (0.8%) 71.4% - 2.3%Margin

^[16] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

The table below sets forth a reconciliation of the Company's net Income/(loss) to non-GAAP net Income/(loss), non-GAAP net Income/(loss) margin for the periods indicated:

Table 14 - Reconciliation of Non-GAAP Net Income/(Loss) and Non-GAAP Net Income/(Loss) Margin

Three Months Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[17] Total

Net Income/(Loss) (263,884) 11,468 (79,027) (60,688) (37,538) 12,862 (76,128) (492,935)

Add:

Share-based Compensation 1,706 2,373 1,829 2,255 625 58 17,261 26,107 Expenses

Amortization of Intangible Assets - - - - - - - - Resulting from Business

Subtract:

Gain fromappreciation of - - - - - - (8,850) (8,850)investments

Non-GAAP Net (262,178) 13,841 (77,198) (58,433) (36,913) 12,920 (67,717) (475,678)Income/(Loss)

Non-GAAP NetIncome/(Loss) (4.5%) 0.9% (14.2%) (23.1%) (3.9%) 22.1% - (5.1%)Margin

^[17] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Three Months Ended December 31, 2019

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[18] Total

Net Income/(Loss) 261,633 16,097 (68,105) (64,395) (14,457) 34,705 (32,878) 132,600

Add:

Share-based Compensation 4,237 2,555 3,417 2,587 766 72 13,814 27,448 Expenses

Amortization of Intangible Assets - - - 933 - - - 933 Resulting from Business

Subtract:

Gain fromappreciation of - - - - - - (14,155) (14,155)investments

Non-GAAP Net 265,870 18,652 (64,688) (60,875) (13,691) 34,777 (33,219) 146,826Income/(Loss)

Non-GAAP NetIncome/(Loss) 3.9% 1.2% (10.6%) (45.0%) (1.5%) 67.2% - 1.4%Margin

^[18] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Fiscal Year Ended December 31, 2020

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[19] Total

Net Income/(Loss) (755,305) (199,826) (175,072) (251,511) (116,782) 93,981 (278,553) (1,683,068)

Add:

Share-based Compensation 14,188 11,123 11,006 8,803 3,144 511 80,876 129,651 Expenses

Amortization of Intangible Assets - - - 2,782 - - - 2,782 Resulting from Business

Subtract:

Gain fromappreciation of - - - - - - (18,688) (18,688)investments

Non-GAAP Net (741,117) (188,703) (164,066) (239,926) (113,638) 94,492 (216,365) (1,569,323)Income/(Loss)

Non-GAAP NetIncome/(Loss) (3.8%) (3.7%) (8.6%) (30.9%) (4.5%) 44.8% - (5.2%)Margin

^[19] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

Fiscal Year Ended December 31, 2019

(In RMB'000) Express Freight Supply Chain Global UCargo Capital Unallocated^^[20] Total

Net Income/(Loss) 461,490 18,684 (122,312) (167,600) (22,056) 125,966 (121,470) 172,702

Add:

Share-based Compensation 20,209 8,531 11,110 7,480 2,498 247 41,618 91,693 Expenses

Amortization of Intangible Assets - - - 3,660 - - - 3,660 Resulting from Business

Subtract:

Gain fromappreciation of - - - - - - (14,155) (14,155)investments

Non-GAAP Net 481,699 27,215 (111,202) (156,460) (19,558) 126,213 (94,007) 253,900Income/(Loss)

Non-GAAP NetIncome/(Loss) 2.2% 0.5% (5.1%) (46.4%) (0.8%) 61.5% - 0.8%Margin

^[20] Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

The table below sets forth a reconciliation of the Company's Diluted EPS to non-GAAP Diluted EPS for the periods indicated:

Table 15 - Reconciliation of Diluted EPS and Non-GAAP Diluted EPS

Three Months Ended December 31, Fiscal Year Ended December 31,

2020 2020

(In '000) RMB US$ RMB US$

Net Loss Attributable to Ordinary Shareholders (487,609) (74,730) (1,657,352) (254,004)

Add:

Share-based Compensation Expenses 26,107 4,000 129,651 19,869

Amortization of Intangible Assets Resulting - - 2,782 426 from Business Acquisitions

Subtract:

Gain from appreciation of investments (8,850) (1,356) (18,688) (2,864)

Non-GAAP Net Loss Attributable to Ordinary Shareholders for Computing (470,352) (72,086) (1,543,607) (236,573) Non-GAAP Diluted EPS

Weighted Average Diluted Shares Outstanding During the Period

Diluted 385,575,665 385,575,665 387,492,906 387,492,906

Diluted (Non-GAAP) 385,575,665 385,575,665 387,492,906 387,492,906

Diluted EPS (1.26) (0.19) (4.28) (0.66)

Add:

Non-GAAP adjustment to net loss per share 0.04 - 0.30 0.05

Non-GAAP Diluted EPS (1.22) (0.19) (3.98) (0.61)

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SOURCE BEST Inc.