PR Newswire | Aug 17, 2021 06:00PM EDT

08/17 17:00 CDT

BEST Inc. Announces Unaudited Second Quarter 2021 Financial Results HANGZHOU, China, Aug. 17, 2021

HANGZHOU, China, Aug. 17, 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 quarter ended June 30, 2021.

Johnny Chou, Founder, Chairman and Chief Executive Officer of BEST, commented, "In the second quarter we continued to press forward with our strategic refocusing plan and build on the encouraging signs we are seeing in network stability, service quality, and cost reduction, while adapting to the competitive industry landscape. In particular, our Express continued to make progress in unit cost reduction and witnessed significant network improvement with enhanced service quality. For Freight business, it continued its industry leading position and registered a net profit for the quarter with emphasis on our e-commerce capability. Supply Chain Management achieved profitability by serving high-margin customers and expanding cloud OFCs network supported by smart logistic management for better operating efficiency. Our Global business continued its growth momentum with parcel volume in Southeast Asia increasing 140.7% year-over-year despite a resurgence of the COVID-19 pandemic in the region."

"Given the supportive industry regulatory environment and continued strong e-commerce growth, we are optimistic that our strategic refocusing plan will position us to deliver improved operating and financial results in the coming quarters."

Gloria Fan, BEST's Chief Financial Officer, commented, "In the second quarter of 2021, our revenue reached RMB7.4 billion. The slight revenue decline compared with the second quarter of 2020 was driven by lower average selling price in Express and Freight, partially offset by higher volume in both business units. Our net loss narrowed down to RMB467.5 million compared to the first quarter of 2021, benefitting from our effective cost control across business units. As part of our refocusing plan, we continued to improve our balance sheet and streamline our asset base. From beginning of the year to the date of this press release, we have completed approximately RMB1.0 billion of financing and asset conversion. In addition, we are working on a pipeline of financing and strategic initiatives to further strengthen our balance sheet. Our balance of cash and cash equivalents, restricted cash and short-term investments were RMB3.4 billion at the end of the second quarter of 2021. Our strategic refocusing plan charts a clear path for us to achieve sustainable growth and profitability in the long run."

FINANCIAL HIGHLIGHTS([1])

For the Quarter Ended June 30, 2021:

* Revenue was RMB7,374.7 million (US$1,142.2 million), a decrease of 5.0% year-over-year ("YoY"). The decrease was primarily due to a decrease in average selling price ("ASP") in Express and Freight business segments, partially offset by an increase in Express and Freight volume. * Gross Loss was RMB144.6 million (US$22.4 million), compared to gross profit of RMB484.5 million in the same period of 2020. Gross Loss Margin was 2.0%, decreased by 8.2 percentage points ("ppts") YoY. * Net Loss was RMB467.5 million (US$72.4 million), compared to a net profit of RMB42.7 million in the same period of 2020. Non-GAAP Net Loss([2])([3]) was RMB435.8 million (US$67.5 million), compared to non-GAAP net income of RMB80.6 million in the same period of 2020. * Diluted EPS([4]) was negative RMB1.19 (US$0.18), compared to positive RMB0.13 in the same period of 2020. Non-GAAP Diluted EPS(3)(4) was negative RMB1.11 (US$0.17), compared to positive RMB0.22 in the same period of 2020. * EBITDA([5]) was negative RMB284.8 million (US$44.1 million), compared to positive RMB188.0 million in the same period of 2020. Adjusted EBITDA(3)(5) was negative RMB253.1 million (US$39.2 million), compared to positive RMB225.0 million in the same period of 2020.

BUSINESS HIGHLIGHTS([6])

BEST Express -The Company remained committed to executing its refocusing strategy to optimize product and cost structure, improve network stability, as well as enhance service quality during the second quarter. The Company believes these initiatives played positive roles in upgrading its network and expects this will be reflected in its financial metrics later this year.

In the second quarter of 2021, parcel volume increased by 1.2% YoY to 2.3 billion. Gross margin decreased by 11.0 ppts primarily due to a decline in ASP per parcel of 18.0% YoY, partially offset by a decrease in average cost per parcel of 8.5% YoY.

^([1]) All numbers presented have been rounded to the nearest integer, tenth,or hundredth, and year-over-year comparisons are based on figures beforerounding.

^([2]) Non-GAAP net income/loss represents net income/loss excludingshare-based compensation expenses, amortization of intangible assets resultingfrom business acquisitions, and fair value change of equity investments (ifany).

^([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 dividingnet income/loss attributable to ordinary shareholders as adjusted for theeffect of dilutive ordinary equivalent shares, if any, by the weighted averagenumber of ordinary and dilutive ordinary equivalent shares outstanding duringthe period.

^([5]) EBITDA represents net loss excluding depreciation, amortization,interest expense and income tax expense and minus interest income. AdjustedEBITDA represents EBITDA excluding share-based compensation expenses and fairvalue change of equity investments (if any).

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

BEST Freight -Freight continued to strengthen its industry leadership through continued operating efficiency, networking expansion and enhanced service quality.

Freight returned to profitability at the bottom line in the second quarter of 2021. The average cost per tonne remained relatively steady YoY despite higher oil prices in the second quarter of 2021 and the absence of highway toll subsidy in the second quarter of 2021 as compared with the same period in 2020. Freight volume for this quarter increased 9.3% YoY, with e-commerce volume growth of 23.1% YoY, contributing to 19.2% of total volume.

BEST Supply Chain Management -In the second quarter of 2021, the Company continued to focus on high-margin customers, expanding its cloud OFCs network and enhancing operating efficiency. The total number of orders fulfilled by Cloud OFCs increased by 8.2% YoY to 120.5 million in the second quarter and the total number of orders fulfilled by franchised Cloud OFCs increased by 36.3% YoY to 73.1 million. The number of franchised OFCs increased by 5.8% YoY to 345 in the second quarter of 2021. Gross margin for Supply Chain Management improved to 9.0% from the 5.4% in the first quarter of 2021.

BEST Global -Global continued its fast growth momentum in Southeast Asia and has made significant margin improvement. In the second quarter of 2021, parcel volume in Southeast Asia increased by 140.7% YoY to 38.8 million, driven by 80.0% and 195.5% YoY growth in Thailand and Vietnam, respectively. Global's gross margin improved significantly by 7.0 ppts year-over-year, benefiting from economies of scale fueled by increased market share and network expansion in the region, as well as utilization of our strong supply chain management capabilities and cross-border logistics solutions by leveraging our Express, Freight and Supply Chain Management expertise.

Others-For UCargo, as of June 30, 2021, the number of registered drivers on the UCargo mobile app increased by 53.9% YoY to 375,802. In the second quarter of 2021, the total number of transactions on the trucking brokerage platform increased by 55.1% YoY to 212,941.

Key Operational Metrics

Three Months Ended % Change YoY

June 30 , June 30, June 30, 2020 2021Express Parcel Volume (in 2019 vs vs'000) 2020 2021 2019 2020

1,906,863 2,274,585 2,300,851 19.3% 1.2%

Freight Volume (Tonne in '000) 1,730 2,230 2,438 28.9% 9.3%

Supply Chain Management 86,663 111,332 120,471 28.5% 8.2% Orders Fulfilled (in '000)

Global Parcel Volume in 783 16,100 38,761 1,955% 140.7% Southeast Asia (in '000)

UCargo Number of 115 137 213 19.8% 55.1% Transactions (in '000)

FINANCIAL RESULTS

For the Quarter Ended June 30, 2021:

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

June 30, 2020 June 30, 2021

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

Express 5,165,696 66.5% 4,281,367 663,099 58.0% (17.1%)

Freight 1,370,862 17.7% 1,398,561 216,610 19.0% 2.0%

Supply Chain 509,708 6.6% 479,555 74,274 6.5% (5.9%)Management

Global 192,500 2.5% 314,602 48,726 4.3% 63.4%

Others^([7]) 522,144 6.7% 900,613 139,487 12.2% 72.5%

Total Revenue 7,760,910 100.0% 7,374,698 1,142,196 100.0% (5.0%)

* Express Service Revenue decreased by 17.1% YoY to RMB4,281.4 million (US$663.1 million) from RMB5,165.7 million, primarily due to an 18.0% YoY decrease in ASP per parcel, partially offset by a 1.2% YoY increase in parcel volume. The decrease in ASP per parcel was primarily attributable to competitive market dynamics. * Freight Service Revenue increased by 2.0% YoY to RMB1,398.6 million (US$216.6 million) from RMB1,370.9 million, primarily due to a 9.3% YoY increase in freight volume, partially offset by a 6.5% YoY decrease in ASP per tonne. * Supply Chain Management Service Revenue decreased by 5.9% YoY to RMB479.6 million (US$74.3 million) from RMB509.7 million, primarily due to discontinuation of service to certain low-margin legacy customers, partially offset by an 8.2% YoY increase in the total number of orders fulfilled by Cloud OFCs. * Global Service Revenue increased by 63.4% YoY to RMB314.6 million (US$48.7 million) from RMB192.5 million, primarily due to strong growth in parcel volumes in Southeast Asia. * Others Services Revenue increased by 72.5% YoY to RMB900.6 million (US$139.5 million) from RMB522.1 million, primarily due to a strong increase in total number of transactions of UCargo business.

^([7]) "Others" Segment represents UCargo and Capital businessunits.

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 June 30, 2020 June 30, 2021 Change

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

Express (4,874,191) 94.4% (4,512,211) (698,852) 105.4% 11.0ppts

Freight (1,242,847) 90.7% (1,365,578) (211,501) 97.6% 6.9ppts

Supply Chain (460,298) 90.3% (436,530) (67,610) 91.0% 0.7pptsManagement

Global (214,540) 111.4% (328,597) (50,893) 104.4% (7.0ppts)

Others (484,491) 92.8% (876,401) (135,737) 97.3% 4.5ppts

Total Cost of (7,276,367) 93.8% (7,519,317) (1,164,593) 102.0% 8.2pptsRevenue

Cost of Revenue was RMB7,519.3 million (US$1,164.6 million) or 102.0% of revenue in the second quarter of 2021, compared to RMB7,276.4 million or 93.8% of revenue in the same quarter of 2020. The increase of 8.2 ppts in cost of revenue as a percentage of revenue was primarily attributable to a steeper decrease in ASP than unit cost for Express and Freight business units.

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

Three Months Ended % Change

(in RMB) June 30, 2020 June 30, 2021 YoY

Express:

Average Cost Per Parcel 2.14 1.96 (8.5%)

Average Transportation Cost Per Parcel 0.57 0.54 (5.3%)

Average Labor Cost Per Parcel 0.21 0.19 (9.5%)

Average Lease Cost Per Parcel 0.08 0.10 25.0%

Average Other Cost Per Parcel 0.08 0.06 (25.0%)

Average Last-mile Cost Per Parcel 1.20 1.07 (10.8%)

Freight:

Average Cost Per Tonne 557.4 560.1 0.5%

Gross Losswas RMB144.6 million (US$22.4 million) in the second quarter of 2021, compared to gross profit of RMB484.5 million in the same period of 2020. Gross Loss Marginwas 2.0%.

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

June 30, 2020 June 30, 2021

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

Selling, General and Administrative (403,848) 5.2% (458,650) (71,036) 6.2% 1.0pptsExpenses

Adjusted for (33,865) 0.4% (29,309) (4,539) 0.4% 0.0ppts SBC Expenses

Adjusted Selling,General and (369,983) 4.8% (429,341) (66,497) 5.8% 1.0ppts Administrative Expenses

Research and (42,002) 0.5% (60,952) (9,440) 0.8% 0.3ppts Development Expenses

Adjusted for (2,489) 0.0% (2,167) (336) 0.0% 0.0ppts SBC Expenses

Adjusted Research and (39,513) 0.5% (58,785) (9,104) 0.8% 0.3ppts Development Expenses

Total Operating (445,850) 5.7% (519,602) (80,476) 7.0% 1.3pptsExpenses

Adjusted for (36,354) 0.4% (31,476) (4,875) 0.4% 0.0ppts SBC Expenses

Adjusted Total (409,496) 5.3% (488,126) (75,601) 6.6% 1.3ppts Operating Expenses

Selling, General and Administrative ("SG&A") Expenses were RMB458.7 million (US$71.0 million) or 6.2% of revenue in the second quarter of 2021, compared to RMB403.8 million or 5.2% of revenue in the same quarter of 2020. The increase in SG&A expenses was primarily attributable to additional bad debt provision resulted from the pandemic and absence of certain COVID-19 pandemic related subsidies that were available in 2020.

Research and Development ("R&D") Expenses were RMB61.0 million (US$9.4 million) or 0.8% of revenue in the second quarter of 2021, compared to RMB42.0 million, or 0.5% of revenue in the same quarter of 2020.

Share-based Compensation ("SBC") Expenses included in the cost and expense items above in the second quarter of 2021 were RMB31.7 million (US$4.9 million), compared to RMB37.0 million in the same quarter of 2020. In the second quarter of 2021, RMB0.2 million (US$0.04 million) was allocated to cost of revenue, RMB1.6 million (US$0.2 million) was allocated to selling expenses, RMB27.7 million (US$4.3 million) was allocated to general and administrative expenses, and RMB2.2 million (US$0.3 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss

Net Lossin the second quarter of 2021 was RMB467.5 million (US$72.4 million), compared to a net income of RMB42.7 million in the same period of 2020. 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 second quarter of 2021 was RMB435.8 million (US$67.5 million), compared to non-GAAP net income of RMB80.6 million in the same period of 2020.

The following table sets forth a breakdown of non-GAAP net (loss)/income for the three months ended June 30, 2021 by segment.

Table 5 - Breakdown of non-GAAP Net (Loss)/Income by Segment

Three Months Ended June 30, 2021

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

Non-GAAP Net (325,971) 18,922 12,355 (52,951) (9,486) (78,628) (435,759)(Loss)/Income

Diluted EPS and Non-GAAP Diluted EPS

Diluted EPS in the second quarter of 2021 was negative RMB1.19(US$0.18), based on a weighted average of 388.1 million diluted shares outstanding during the quarter. This is compared to positive RMB0.13 on a weighted average of 389.3 million diluted shares outstanding in the same period of 2020. 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 second quarter of 2021 was negative RMB1.11(US$0.17), compared to positive RMB0.22 in the same period of 2020. 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 second quarter of 2021 was negative RMB253.1 million (US$39.2 million), compared to positive RMB225.0 million in same quarter of 2020. Adjusted EBITDA Margin was negative 3.4% in the second quarter of 2021, compared to positive 2.9% in the same quarter of 2020.

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 June 30, 2021 by segment.

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

Three Months Ended June 30, 2021

(In Express Freight Supply Global Others Unallocated^ TotalRMB'000) Chain (^[9])

Adjusted (215,641) 36,631 22,382 (47,275) (8,339) (40,813) (253,055)EBITDA

AdjustedEBITDA (5.0%) 2.6% 4.7% (15.0%) (0.9%) - (3.4%)Margin

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

^([9]) 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 June 30, 2021, cash and cash equivalents, restricted cash and short-term investments were RMB3,413.3 million (US$528.6 million), compared to RMB3,976.8 million as of March 31, 2021. The decrease in cash and cash equivalents, restricted cash and short-term investments was primarily due to net cash used in financing activities.

Net Cash Used in Operating Activities

Net cash used in continuing operating activities was RMB127.5 million (US$19.7 million), compared to net cash generated from continuing operating activities of RMB754.3 million in the same period of 2020, mainly due to decreased ASP for Express and Freight business segments.

Capital Expenditures ("CAPEX")

CAPEX was RMB174.5 million (US$27.0 million), or 2.4% of total revenue in the second quarter ended June 30, 2021, compared to CAPEX of RMB424.1 million, or 5.5% of total revenue, in the same period of 2020.

SHARES OUTSTANDING

As of the date of this press release, the Company had approximately 388.6 million ordinary shares outstanding([10]). Each American Depositary Share represents one Class A ordinary share.

FINANCIAL GUIDANCE

Based on current market conditions and operations, the Company expects its revenue for the full fiscal year of 2021 to be between RMB28 billion and RMB32 billion. This forecast reflects management's current and preliminary expectation, which is subject to change.

^([10]) The total number of shares outstanding excludes shares reserved forfuture issuances upon exercise or vesting of awards granted under the Company'sshare incentive plans.

WEBCAST AND CONFERENCE CALL INFORMATION

The Company will hold a conference call at 9:00 pm U.S. Eastern Time on August 17, 2021 (9:00 am Beijing Time on August 18, 2021), to discuss its financial results and operating performance for the second quarter of 2021.

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 : 3907495

A replay of the conference call will be accessible through August 24, 2021 by dialing the following numbers:

United States : +1-877-344-7529

International : +1-412-317-0088

Replay Access Code : 10159351

Please visit the Company's investor relations website, located at http://ir.best-inc.com/, 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/.

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 compete effectively; 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/income 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 June 30, Six Months Ended June 30,

2020 2021 2020 2021

RMB RMB US$ RMB RMB US$

Revenue

Express 5,165,696 4,281,367 663,099 8,541,308 7,994,447 1,238,182

Freight 1,370,862 1,398,561 216,610 2,058,109 2,573,054 398,515

Supply Chain 509,708 479,555 74,274 917,300 927,216 143,607Management

Global 192,500 314,602 48,726 308,288 565,024 87,511

Others 522,144 900,613 139,487 938,526 1,811,596 280,580

Total Revenue 7,760,910 7,374,698 1,142,196 12,763,531 13,871,337 2,148,395

Cost of Revenue

Express (4,874,191) (4,512,211) (698,852) (8,365,512) (8,470,338) (1,311,888)

Freight (1,242,847) (1,365,578) (211,501) (2,059,282) (2,539,508) (393,320)

Supply Chain (460,298) (436,530) (67,610) (864,744) (860,036) (133,203)Management

Global (214,540) (328,597) (50,893) (362,858) (593,699) (91,952)

Others (484,491) (876,401) (135,737) (864,587) (1,745,730) (270,379)

Total Cost of (7,276,367) (7,519,317) (1,164,593) (12,516,983) (14,209,311) (2,200,742)Revenue

Gross Profit/ 484,543 (144,619) (22,397) 246,548 (337,974) (52,347)(Loss)

Selling (114,037) (114,242) (17,694) (232,152) (221,447) (34,298)Expenses

General andAdministrative (289,811) (344,408) (53,342) (555,803) (653,638) (101,236) Expenses

Research andDevelopment (42,002) (60,952) (9,440) (92,694) (114,639) (17,755) Expenses

Total Operating (445,850) (519,602) (80,476) (880,649) (989,724) (153,289)Expenses

Income/(Loss)from 38,693 (664,221) (102,873) (634,101) (1,327,698) (205,636) Operations

Interest Income 18,415 16,670 2,582 40,000 33,548 5,196

Interest (41,379) (48,165) (7,460) (74,551) (94,172) (14,585)Expense

ForeignExchange (Loss) (148) (1,228) (190) 242 (428) (66)/Gain

Other Income 36,426 237,107 36,723 69,219 346,551 53,674

Other Expense (4,972) (10,258) (1,589) (16,082) (28,075) (4,348)

Income/(Loss)before Income Taxand Share 47,035 (470,095) (72,807) (615,273) (1,070,274) (165,765) of Net Lossof Equity Investees

Income Tax (4,324) 2,643 409 (8,859) (1,647) (255)Expense

Income/(Loss)before Share of 42,711 (467,452) (72,398) (624,132) (1,071,921) (166,020)Net loss of EquityInvestees

Share of NetLoss of Equity (44) (42) (7) (74) (42) (7) Investees

Net Income/(Loss) from 42,667 (467,494) (72,405) (624,206) (1,071,963) (166,027) continuingoperations

Net (loss)/income from (73,566) 1,007 157 (157,445) (12,829) (1,987)discontinuedoperations

Net Loss (30,899) (466,487) (72,248) (781,651) (1,084,792) (168,014)

Net Loss fromcontinuing operationsattributable to (6,571) (5,519) (855) (14,431) (10,929) (1,693) non-controllinginterests

Net Lossattributable to (24,328) (460,968) (71,393) (767,220) (1,073,863) (166,321) BEST Inc.

Summary of Unaudited Condensed Consolidated Balance Sheets(In Thousands)

As of December 31, As of June 30, 2021 2020

RMB RMB US$

Assets

Current Assets

Cash and Cash Equivalents 1,383,317 908,434 140,699

Restricted Cash 2,102,426 1,999,204 309,637

Accounts and Notes Receivables 983,601 967,940 149,915

Inventories 44,133 39,182 6,069

Prepayments and Other Current 3,304,670 3,306,158 512,058Assets

Short-term Investments 268,647 739 114

Amounts Due from Related Parties 274,395 183,132 28,364

Lease Rental Receivables 497,127 492,639 76,300

Assets held for sale 509,395 483,011 74,809

Total Current Assets 9,367,711 8,380,439 1,297,965

Non-current Assets

Property and Equipment, Net 4,079,235 4,442,944 688,124

Intangible Assets, Net 12,198 12,203 1,890

Long-term Investments 221,426 202,603 31,379

Goodwill 295,758 295,758 45,807

Non-current Deposits 129,645 120,548 18,671

Other Non-current Assets 543,949 307,778 47,669

Restricted Cash 709,848 504,895 78,198

Lease Rental Receivables 647,678 457,668 70,884

Operating Lease Right-of-use Assets 3,863,375 3,661,110 567,034

Total non-current Assets 10,503,112 10,005,507 1,549,656

Total Assets 19,870,823 18,385,946 2,847,621

Liabilities and Shareholders'Equity

Current Liabilities

Securitization Debt 95,149 281,516 43,601

Short-term Bank Loans 3,082,537 2,302,392 356,595

Accounts and Notes Payable 4,144,948 4,219,851 653,572

Income Tax Payable 14,550 1,806 280

Customer Advances and Deposits and 1,526,051 1,349,832 209,062 Deferred Revenue

Accrued Expenses and Other 2,507,917 2,680,687 415,185Liabilities

Financing Lease Liabilities 1,581 1,368 212

Operating Lease Liabilities 1,032,461 1,125,800 174,364

Amounts Due to Related Parties 35,623 6,525 1,011

Liabilities held for sale 193,432 187,818 29,089

Total Current Liabilities 12,634,249 12,157,595 1,882,971

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

As of December 31, As of June 30, 2021 2020

RMB RMB US$

Non-current Liabilities

Convertible senior notes heldby 1,617,846 1,605,562 248,670 related parties

Secured Borrowings - 106,450 16,487

Convertible Senior Notes heldby third 642,121 638,794 98,937 parties

Operating Lease Liabilities 2,995,173 2,781,791 430,845

Financing Lease Liabilities 2,698 2,050 318

Other Non-current Liabilities 175,584 136,916 21,206

Long-term Bank Loans 78,548 76,456 11,842

Total Non-current Liabilities 5,511,970 5,348,019 828,305

Total Liabilities 18,146,219 17,505,614 2,711,276

Mezzanine Equity:

Convertible Non-controlling - 191,865 29,716Interests

Total mezzanine equity - 191,865 29,716

Shareholders' Equity

Ordinary Shares 25,988 25,988 4,025

Treasury Shares (211,352) (139,460) (21,600)

Additional Paid-In Capital 19,487,232 19,473,666 3,016,087

Statutory reserves 8,038 6,982 1,081

Accumulated Deficit (17,710,964) (18,783,771)^ (2,909,236) ([11])

Accumulated Other 151,677 140,744 21,798 Comprehensive Income

BEST Inc. Shareholders' Equity 1,750,619 724,149 112,155

Non-controlling Interests (26,015) (35,682) (5,526)

Total Shareholders' Equity 1,724,604 688,467 106,629

Total Liabilities, MezzanineEquity 19,870,823 18,385,946 2,847,621 and Shareholders' Equity

^([11]) Including accumulated accretion to redemption value and deemed dividendin relation to redeemable convertible preferred shares of RMB9,493,807, andaccumulated loss from operations of RMB9,289,964

Summary of Unaudited Condensed Consolidated Statements of Cash Flows(In Thousands)



Three Months Ended June 30, Six Months Ended June 30,

2020 2021 2020 2021

RMB RMB US$ RMB RMB US$

Net cash generatedfrom/(used in) 754,261 (127,506) (19,748) (476,664) (691,154) (107,047) continuingoperating activities

Net cash (used in)/generated from (31,655) 35,914 5,562 (94,243) (58,389) (9,043) discontinuedoperating activities

Net cash generatedfrom/(used in) 722,606 (91,592) (14,186) (570,907) (749,543) (116,090) operatingactivities

Net cash (used in)/generated from (282,923) 325,541 50,420 (168,766) 348,370 53,956 continuinginvesting activities

Net cash used indiscontinued (161) (184) (28) (401) (217) (34) Investingactivities

Net cash (used in) /generated (283,084) 325,357 50,392 (169,167) 348,153 53,922 from investingactivities

Net cash generatedfrom/(used in) 757,081 (271,861) (42,106) 1,512,066 (77,914) (12,067) continuingfinancing activities

Net cash generatedfrom/(used in) 5,000 (187,500) (29,040) (145,000) (280,000) (43,366) discontinuedfinancing activities

Net cash generatedfrom (used 762,081 (459,361) (71,146) 1,367,066 (357,914) (55,433) in) financingactivities

Exchange Rate Effecton Cash, Cash Equivalents, 1,023 (37,131) (5,751) 25,189 (30,415) (4,711)and Restricted Cash

Net Increase/(decrease) in Cash and Cash 1,202,626 (262,727) (40,691) 652,181 (789,719) (122,312)Equivalents, and Restricted Cash

Cash and CashEquivalents, and Restricted Cash 3,406,770 3,682,129 570,289 3,957,215 4,209,121 651,910at Beginning of Period

Cash and CashEquivalents, and Restricted Cash 4,609,396 3,419,402 529,598 4,609,396 3,419,402 529,598at End of Period

Less: Cash and CashEquivalents, and Restricted 12,658 6,869 1,064 12,658 6,869 1,064Cash held for sales at end ofthe Period

Cash and CashEquivalents, and Restricted Cashfrom 4,596,738 3,412,533 528,534 4,596,738 3,412,533 528,534 continuingoperations 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)/income to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:

Table 7 - Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

Three Months Ended June 30, 2021

(In RMB'000) Express Freight Supply Global Others Unallocated Total Chain ^(^[12])

Net (Loss)/ (327,713) 15,910 10,027 (55,271) (10,153) (100,294) (467,494)Income

Add:

Depreciation& 110,330 17,709 9,812 5,655 4,021 6,325 153,852Amortization

Interest - - - - - 48,165 48,165Expense

Income TaxExpense/ - - 215 21 (2,874) (5) (2,643)(Benefit)

Subtract:

Interest - - - - - (16,670) (16,670)Income

EBITDA (217,383) 33,619 20,054 (49,595) (9,006) (62,479) (284,790)

Add:

Share-based 1,742 3,012 2,328 2,320 667 21,666 31,735Compensation Expenses

Adjusted (215,641) 36,631 22,382 (47,275) (8,339) (40,813) (253,055)EBITDA

AdjustedEBITDA (5.0%) 2.6% 4.7% (15.0%) (0.9%) - - (3.4%) Margin

Three Months Ended June 30, 2020

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

Net Income/ 127,416 63,866 (7,966) (53,899) (13,937) (72,813) 42,667(Loss)

Add:

Depreciation& 79,308 15,135 10,936 4,151 513 7,963 118,006Amortization

Interest - - - - - 41,379 41,379Expense

Income TaxExpense/ 1,236 - (96) (281) 3,465 - 4,324(Benefit)

Subtract:

Interest - - - - - (18,415) (18,415)Income

EBITDA 207,960 79,001 2,874 (50,029) (9,959) (41,886) 187,961

Add:

Share-based 4,399 2,721 2,835 2,224 1,035 23,822 37,036Compensation Expenses

Adjusted 212,359 81,722 5,709 (47,805) (8,924) (18,064) 224,997EBITDA

AdjustedEBITDA 4.1% 6.0% 1.1% (24.8%) (1.7%) - 2.9%Margin

^([12]) Unallocated expenses are primarily related to corporate administrativeexpenses and other miscellaneous items that are not allocated to individualsegments.

^([13]) 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 (loss)/income to non-GAAP net (loss)/income, non-GAAP net (loss)/income margin for the periods indicated:

Table 8 - Reconciliation of Non-GAAP Net (Loss)/Income and Non-GAAP Net (Loss)/Income Margin

Three Months Ended June 30, 2021

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

Net (Loss)/ (327,713) 15,910 10,027 (55,271) (10,153) (100,294) (467,494)Income

Add:

Share-based 1,742 3,012 2,328 2,320 667 21,666 31,735Compensation Expenses

Non-GAAPNet (325,971) 18,922 12,355 (52,951) (9,486) (78,628) (435,759)(Loss)/Income

Non-GAAPNet (Loss)/ (7.6%) 1.4% 2.6% (16.8%) (1.1%) - (5.9%)Income

Margin

Three Months Ended June 30, 2020

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

Net Income/ 127,416 63,866 (7,966) (53,899) (13,937) (72,813) 42,667(Loss)

Add:

Share-based 4,399 2,721 2,835 2,224 1,035 23,822 37,036Compensation Expenses

Amortizationof Intangible - - - 940 - - 940Assets Resultingfrom Business

Non-GAAP Net Income/ 131,815 66,587 (5,131) (50,735) (12,902) (48,991) 80,643(Loss)

Non-GAAP Net Income/(Loss) 2.6% 4.9% (1.0%) (26.4%) (2.5%) - - 1.0%

Margin

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

^([15]) 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 9 - Reconciliation of Diluted EPS and Non-GAAP Diluted EPS

Three Months Ended June Six Months Ended June 30, 30,

2021 2021

(In '000) RMB US$ RMB US$

Net Loss Attributable toOrdinary (461,975) (71,550) (1,061,034) (164,334) Shareholders

Add:

Share-based Compensation 31,735 4,916 60,700 9,402 Expenses

Subtract:

Gain from appreciation of - - (5,562) (861) investments

Non-GAAP Net Loss Attributableto Ordinary Shareholders for (430,240) (66,634) (1,005,896) (155,793) Computing Non-GAAP DilutedEPS

Weighted Average DilutedShares Outstanding During thePeriod

Diluted 388,060,785 388,060,785 387,438,822 387,438,822

Diluted (Non-GAAP) 388,060,785 388,060,785 387,438,822 387,438,822

Diluted EPS (1.19) (0.18) (2.74) (0.42)

Add:

Non-GAAP adjustment to net 0.08 0.01 0.14 0.02loss per share

Non-GAAP Diluted EPS (1.11) (0.17) (2.60) (0.40)

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SOURCE BEST Inc.