Core Insights - The company reported a 27.1% year-on-year revenue growth for the fiscal year 2024, reaching approximately 15.746 billion yuan, with a gross profit increase of 34.8% to about 1.072 billion yuan [1] - Net profit for the year was approximately 133 million yuan, a significant increase of 161.8% year-on-year, with a net profit margin doubling from 0.4% in 2023 to 0.8% [1] - The company has shown consistent improvement in revenue and profitability, with revenue nearly doubling from 8.174 billion yuan in 2021 to 15.746 billion yuan in 2024 [1] Revenue Breakdown - The company's same-city delivery service order volume grew by over 30% year-on-year, significantly boosting revenue [2] - Revenue from same-city delivery services targeting merchants reached 6.688 billion yuan, a year-on-year increase of 28.1% [2] - The number of active merchants on the platform reached 650,000, a 39% year-on-year growth, with over 7,500 new cooperative stores added [2] Consumer Engagement - Revenue from same-city delivery services aimed at consumers grew by 12.2% to approximately 2.433 billion yuan, with active consumer numbers exceeding 23.41 million [2] - The company launched a one-on-one "exclusive delivery" product, which saw a fourfold increase in order volume [2] Last-Mile Delivery Services - Revenue from last-mile delivery services increased significantly by 32.5% to 6.625 billion yuan [3] - The company supported an average of over 1.5 million orders per day during peak delivery periods [3] - The company is exploring the use of unmanned vehicles for last-mile delivery, with over a thousand active routes nationwide [3]

Core Viewpoint - SF Express City (顺丰同城) reported a significant increase in revenue and profit for the fiscal year ending December 31, 2024, indicating strong growth and operational efficiency in the local delivery service sector [1][2]. Financial Performance - The company achieved a revenue of 15.746 billion RMB, representing a year-on-year increase of 27.11% [1]. - Profit attributable to shareholders reached 132 million RMB, marking a substantial increase of 161.8% compared to the previous year [1]. - Basic earnings per share were reported at 0.15 RMB [1]. Revenue Breakdown - Revenue from continuing operations grew from 12.387 billion RMB in 2023 to 15.746 billion RMB in 2024, reflecting a growth rate of 27.1% [2]. - Revenue from same-city delivery services increased from 7.387 billion RMB in 2023 to 9.121 billion RMB in 2024, a growth of 23.5% [2]. - Last-mile delivery service revenue rose from 5 billion RMB in 2023 to 6.625 billion RMB in 2024, showing a growth of 32.5% [2]. Strategic Focus - The company emphasized a strategy of healthy and high-quality growth, focusing on deepening strategic customer partnerships and enhancing business structure [1]. - SF Express City aims to capture diverse market demands by leveraging insights from the local life service industry and providing high-cost performance products and quality services [1]. - The company is committed to optimizing operational costs and improving efficiency through lean operations, reinforcing its competitive advantage in the market [1].

Financial Performance - Revenue from continuing operations increased from RMB 12,387.4 million for the year ended December 31, 2023, to RMB 15,746.1 million for the year ended December 31, 2024, representing a growth of 27.1%[5] - Gross profit for the year ended December 31, 2024, was RMB 1,071.5 million with a gross margin of 6.8%, compared to a gross profit of RMB 794.7 million and a gross margin of 6.4% for the year ended December 31, 2023[5] - Net profit attributable to the owners of the company for the year ended December 31, 2024, was RMB 132.5 million, reflecting a net profit margin of 0.8%, a significant increase from RMB 50.6 million and a net profit margin of 0.4% for the previous year, marking a year-on-year growth of 161.8%[5] - Cash generated from operating activities for the year ended December 31, 2024, was RMB 271.9 million, slightly up from RMB 266.3 million for the year ended December 31, 2023, indicating sustained positive cash flow[5] - The company reported a total comprehensive income of RMB 110.3 million for the year ended December 31, 2024, compared to RMB 49.3 million for the previous year[7] - The profit from continuing operations before income tax for the year ended December 31, 2024, was RMB 144,963,000, a significant increase from RMB 62,589,000 in 2023, representing a growth of 131.3%[29] - The net profit from continuing operations for 2024 was RMB 132,460 thousand, compared to RMB 64,857 thousand in 2023, showcasing strong financial performance[72] Earnings Per Share - Basic and diluted earnings per share attributable to the owners of the company for the year ended December 31, 2024, were both RMB 0.15, compared to RMB 0.07 for the year ended December 31, 2023[7] - The basic earnings per share attributable to the company's owners for the year ended December 31, 2024, was RMB 0.15, up from RMB 0.05 in 2023, reflecting a 200% increase[31] - The diluted earnings per share attributable to the company's owners for the year ended December 31, 2024, was RMB 0.15, compared to RMB 0.05 in 2023, marking a 200% increase[33] Revenue Breakdown - Revenue from the same-city instant delivery services for the year ended December 31, 2024, was RMB 15,746,083, an increase of 27.5% compared to RMB 12,387,416 in 2023[19] - Same-city delivery service revenue grew by 23.5% from RMB 7,387.3 million in 2023 to RMB 9,121.2 million in 2024[45] - Last-mile delivery service revenue rose by 32.5% from RMB 5,000.2 million in 2023 to RMB 6,624.9 million in 2024[45] - Revenue from merchant-facing same-city delivery services rose by 28.1% to RMB 6,688.3 million[48] - Revenue from consumer-facing same-city delivery services reached RMB 2,432.9 million, a year-on-year increase of 12.2%, driven by an expanding active consumer base and strong repeat purchases[58] - Revenue from tea beverage delivery increased by 73% year-on-year, with significant growth in other categories as well[53] Cost and Expenses - The company’s total costs for continuing operations were RMB 15,653,556 in 2024, compared to RMB 12,414,425 in 2023, indicating a significant increase[24] - Operating costs increased by 26.6% to RMB 14,674.6 million in 2024, compared to RMB 11,592.7 million in 2023, primarily due to increased delivery costs from higher order volumes[78] - Total labor outsourcing costs for 2024 were RMB 14,564,682, an increase of 27.0% from RMB 11,497,026 in 2023[24] - Employee benefit expenses rose to RMB 662,436 in 2024, compared to RMB 512,301 in 2023, reflecting a growth of 29.3%[24] - Administrative expenses rose by 23.1% to RMB 636.6 million in 2024, compared to RMB 517.3 million in 2023, largely due to increased employee benefits[82] Assets and Liabilities - Total assets increased to RMB 4,669.7 million as of December 31, 2024, from RMB 4,199.7 million as of December 31, 2023[9] - Total liabilities increased to RMB 1,709.2 million as of December 31, 2024, from RMB 1,218.6 million as of December 31, 2023[9] - Trade receivables rose to RMB 1,660.4 million as of December 31, 2024, compared to RMB 1,195.2 million as of December 31, 2023, indicating improved collection efficiency[8] - The total amount of trade payables as of December 31, 2024, was RMB 1,029,639,000, up from RMB 703,044,000 in 2023, representing a growth of 46.3%[37] Dividends - The board of directors proposed not to declare a final dividend for the year ended December 31, 2024, consistent with the previous year[5] - The company did not declare or pay any dividends for the fiscal years ended December 31, 2024, and 2023[42] Operational Highlights - Active merchants on the platform grew by 39% year-on-year, reaching 650,000[52] - The number of active riders on the platform reached approximately 1 million, with a 29% year-on-year increase in mid-to-high income riders and a 40% increase in riders earning over RMB 10,000 per month[63] - The average delivery time for orders within 3 kilometers is 22 minutes, with a service quality achievement rate of approximately 95% for 2024[56] - The company hosted over 10,000 offline care events for riders during the reporting period, enhancing rider welfare and engagement[64] - The safety incident rate decreased by 17% compared to the previous year, reflecting improved safety measures for riders[65] Research and Development - R&D expenses increased to RMB 108,110 thousand in 2024 from RMB 91,717 thousand in 2023, indicating a commitment to innovation[72] - Research and development expenses increased by 17.9% to RMB 108.1 million in 2024, up from RMB 91.7 million in 2023, indicating a focus on innovation[81] Future Plans and Investments - The company aims for "high-quality healthy growth" in 2024, focusing on diversifying services and enhancing digital operations to capture new business opportunities[70] - The company has no significant plans for major investments or capital assets as of December 31, 2024[111] - The unutilized funds are expected to be allocated for expanding the company's service coverage and potential acquisitions, with a deadline extended to the end of 2026[117] Corporate Governance - The audit committee has reviewed the annual performance and consolidated financial statements for the year ending December 31, 2024[124] - The company plans to hold its annual general meeting on June 20, 2025[126] - The board expresses gratitude to all customers, suppliers, riders, partners, and shareholders for their understanding, support, and trust[129] - The board of directors includes executive directors Sun Haijin, Chen Xiwen, and Chen Lin, along with non-executive and independent non-executive directors[131]

Core Insights - The article discusses the rapid commercialization of AI applications in the instant delivery sector, driven by large model technologies like DeepSeek, with companies such as SF Express, Flash Delivery, Meituan, and Dada leading the charge [1][2] Group 1: AI Technology Application - SF Express has a deep understanding of AI technology application, viewing the shift from "technology-driven" to "value-driven" as essential for logistics [1] - The company aims to enhance operational digitalization and AI decision-making across all business segments, improving user demand analysis, merchant strategies, customer service, delivery processes, and capacity management [1] - SF Express has formed partnerships with various domestic firms to create a hybrid architecture of "large model + industry-specific small models," retaining the general capabilities of large models while developing specialized models for instant delivery [2] Group 2: Challenges and Strategies - The application of AI technology brings challenges such as data security, privacy compliance risks, and human-machine responsibility issues [2] - SF Express's core strategy to address these challenges includes controlled technological evolution, open ecosystem collaboration to dilute risks, and a commitment to social responsibility for sustainable development [2] - The company predicts that the ability to balance "technological dividends and social costs" will determine the leaders in the logistics industry over the next decade [2] Group 3: Industry Growth and Future Outlook - AI technologies are providing new momentum for the expansion of the instant delivery industry, with the order volume expected to reach 48.28 billion in 2024 and potentially exceed 100 billion by 2030 [3] - Experts indicate that instant delivery differs fundamentally from standardized production, emphasizing that AI will primarily serve as an intelligent assistant rather than fully replacing human workers [3] - SF Express and other leading third-party delivery platforms are leveraging technological advancements and open collaboration to build differentiated competitive advantages, positioning themselves to lead the next phase of industry development towards greater efficiency and intelligence [3]

Core Viewpoint - The third-party delivery platform SF Express has integrated the DeepSeek large model to enhance its logistics operations and accelerate the intelligent transformation of the instant logistics industry [1] Group 1 - SF Express aims to leverage its operational experience and content accumulation in the logistics sector alongside DeepSeek's advantages in intent understanding and multimodal generation [1] - The integration is expected to bring richer possibilities to the instant logistics industry [1]

Core Viewpoint - The article highlights the significant role of instant delivery services, particularly represented by SF Express's subsidiary, SF City, in enhancing consumer experiences during the Chinese New Year, driven by the festive consumption surge [1][2][3] Group 1: Market Performance - On the first trading day of the Year of the Snake, the Hong Kong stock market experienced fluctuations, with the Hang Seng Index down by 0.74% and the Hang Seng Tech Index down by 0.67% [1] - Despite the market adjustments, analysts predict positive expectations for consumer-related companies such as dining, supermarkets, and logistics due to the Spring Festival consumption boom [1] Group 2: Instant Delivery Services - Instant retail has emerged as a new mainstream consumption model during the Spring Festival, integrating various scenarios from purchasing New Year goods to delivering meals and gifts [1] - SF City has focused on services like New Year’s Eve dinner delivery, collaborating with major retail platforms to meet the demand for immediate delivery during the holiday [1][2] - The company has also enhanced its partnerships with popular beverage brands to provide refined delivery solutions, ensuring efficient operations during peak times [2] Group 3: Business Growth and Projections - SF City is expected to see a net profit increase of no less than 100% year-on-year for 2024, with total revenue and revenue for the second half of the year projected to grow by at least 25% and 30% respectively [3] - The company has consistently outperformed competitors in terms of revenue growth and order volume since 2023, indicating a strong market position [3] - As a unique independent third-party delivery platform, SF City is well-positioned to leverage new consumption trends and contribute to the logistics infrastructure in the coming year [3]

Core Viewpoint - SF Express City anticipates a profit increase of no less than 100% for 2024, driven by growth in the domestic catering and retail sectors, alongside a projected revenue growth of at least 25% [1] Group 1: Financial Performance - The company expects revenue growth of no less than 30% in the second half of 2024 [1] - Non-catering scene revenue increased by 32% year-on-year in the first half of 2024 [3] - Active merchant scale reached 550,000, a 45% year-on-year increase [5] Group 2: Business Development - SF Express City has established itself as a new benchmark in the instant logistics industry, with significant growth in revenue and order volume exceeding industry growth rates [1][2] - The company maintains a balanced development across three main business lines: merchant-facing, consumer-facing, and last-mile delivery services [2] - The company has expanded its service offerings to include luxury goods delivery and upgraded services for individual users [3] Group 3: Market Position and Strategy - The instant retail market in China is projected to exceed 1 trillion yuan in 2024, with SF Express City positioned as a leading independent third-party delivery service [2] - The company has formed partnerships with major platforms like Douyin, Alibaba, and WeChat to enhance its service offerings in new consumption scenarios [5][6] - SF Express City has entered the Hong Kong market under the "SoFast" brand, marking its first foray outside mainland China [7] Group 4: Operational Efficiency - The company utilizes technology and lean management to enhance operational efficiency, including a comprehensive urban logistics system [4] - The integration of various delivery methods, including four-wheeled vehicles, drones, and human resources, has improved delivery capabilities [4] - The company has seen a significant increase in order density and efficiency, with a doubling of income from same-city express services in the first half of 2024 [3][4] Group 5: Growth in Emerging Markets - SF Express City has achieved substantial growth in lower-tier markets, with a 51% year-on-year increase in revenue from these areas [6] - The company has successfully tapped into the expanding market for fresh tea and coffee, with a 60% increase in tea delivery revenue [6] - The company has reported significant growth in delivery volume in various regions during peak shopping periods, indicating strong market demand [7]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 13.50, indicating a potential upside of 46.7% from the current price of HKD 9.20 [2][3][11]. Core Insights - The company has issued a positive earnings forecast, expecting revenue and profit growth of no less than 25% and 100% respectively for 2024. The second half of 2024 is projected to see revenue growth of at least 30% year-on-year [2][7]. - The revenue forecast for 2024 has been revised upward by 4%, driven by better-than-expected growth in key account (KA) business and last-mile delivery services. The report anticipates a decrease in unit prices due to improved delivery efficiency and changes in business structure [2][7]. - The adjusted net profit for 2024 is expected to be RMB 132 million, reflecting a year-on-year increase of 160%, with a corresponding net profit margin of 0.8% [2][7]. Financial Forecasts - Revenue projections for 2024E, 2025E, and 2026E are RMB 15,498 million, RMB 19,350 million, and RMB 23,490 million respectively, with growth rates of 25.1%, 24.8%, and 21.4% [6][15]. - The adjusted net profit for 2024E is projected at RMB 132 million, with a net profit margin of 0.8%. For 2025E, the adjusted net profit is expected to reach RMB 262 million, with a margin of 1.4% [6][15]. - The report highlights a significant increase in the gross profit for 2024E, estimated at RMB 1,022 million, with a gross margin of 6.6% [6][15]. Market Performance - The stock has shown a year-to-date change of -0.97%, with a 52-week high of HKD 12.60 and a low of HKD 8.30. The market capitalization is approximately HKD 6,695.48 million [5][15]. - The report indicates that the company's stock performance is expected to align positively with the anticipated growth in the instant delivery industry, driven by strong demand [2][7].

Group 1 - The company, SF Express City (09699, HK), forecasts a net profit growth of no less than 100% year-on-year for 2024, with total revenue expected to increase by no less than 25% year-on-year [1] - The growth in performance is attributed to the rising demand for instant delivery services driven by increased consumption in the catering and retail sectors, as well as rapid growth in same-city delivery and last-mile orders [1] - The company emphasizes its commitment to technological innovation, enhancing its digital capabilities, and improving operational efficiency, which contributes to better gross margins and cost ratios [1] Group 2 - For 2024, the company plans to focus on local life service industries, adapting to changes in local consumption patterns and seizing opportunities from market trends such as the diversification of traffic, local retail development, and the acceleration of same-city logistics [2] - The company aims to expand the boundaries of instant fulfillment services, strengthen technological innovations, and collaborate with more partners to increase scale and broaden service scenarios, thereby enhancing long-term revenue and profit potential [2]

Core Viewpoint - SF Express City expects significant growth in both profit and revenue for the fiscal year ending December 31, 2024, indicating strong operational performance and market demand [1] Financial Performance - The company anticipates a profit attributable to owners of the company to increase by no less than 100% compared to the previous year [1] - Group revenue is expected to grow by no less than 25% year-on-year, with a projected increase of no less than 30% in the second half of the year compared to the same period last year [1]