NEWS WRAP: Full Truck Alliance drives ahead with strong order, user growth

The online freight platform posted 35% revenue growth in the fourth quarter, but its profit fell on a one-time impairment loss

By Teri Yu

Online trucking platform operator Full Truck Alliance Co., Ltd. (YMM.US) reported its revenue rose nearly 32% in the fourth quarter to 3.17 billion yuan ($435 million), primarily on growth in its user base and its improving monetization ability.

But the company’s quarterly net income dropped to 575 million yuan from 588 million yuan a year ago, as it booked a one-time impairment loss of 352.7 million yuan related to its investment in a money-losing e-commerce auto services platform. Its non-GAAP adjusted income, which excludes certain items like stock-based employee compensation, rose 44% to just over 1 billion yuan from 733 million yuan a year earlier.

For the full year, Full Truck Alliance reported its revenue grew by a similar 33% to reach 11.24 billion yuan, while its net income rose 40.2% to 3.1 billion yuan.

The company’s stock jumped nearly 14% after the latest report’s release to close at $13.26 on Wednesday. The shares have more than double over the past year amid a broader rally for China tech stocks.  

Revenue from the company’s freight brokerage service rose 17%, driven by an increase in its service fee rate, which was partially offset by a decrease in transaction volume. On its earnings call, CFO Cai Chong explained that the company has scaled back its brokerage business due to potential value added tax (VAT) changes but has proactively adjusted its rate to maintain margins.

Total fulfilled orders in the quarter rose 24% year-on-year to reach 56.9 million as a result of better efficiency as well as seasonal factors such as an earlier Chinese New Year. For the first time, direct shippers accounted for 50% of total fulfilled orders.

Average monthly active shippers increased 31% year-on-year to 2.93 million, reflecting the company’s success in attracting new users and engagement among China’s market of 30 million small and medium-sized direct shippers.

“During the quarter, we rapidly expanded our shipper base while enhancing user engagement. In addition, we made significant improvements to our trucker ecosystem and elevated matching efficiency,” said Zhang Hui, the company’s chairman and CEO.

Looking ahead, Full Truck Alliance said it expects to generate revenue of 2.63 billion yuan to 2.68 billion yuan in this year’s first quarter, up around 15.9% to 18.1% year-on-year.

Founded in 2011, Full Truck Alliance operates a digital logistics platform that connects shippers with truck drivers to facilitate shipments. The company was listed on the New York Stock Exchange in 2021.

It was banned from signing up new users for about a year between 2021 and mid-2022 after failing to undergo a required data security review before its listing. That led to a backlog of new users who wanted to register during that period but couldn’t, resulting in a period of rapid new user growth and related activity in 2023 and 2024 that is now gradually subsiding.

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