SF Holding(SZ:002352) HTSC·2025-10-31 10:52Investment Rating - The investment rating for the company is "Buy" and is maintained for both A-shares and H-shares [7]. Core Views - The company reported a revenue of 78.403 billion RMB in Q3 2025, representing a year-over-year increase of 8.21% and a quarter-over-quarter increase of 1.81%. However, the net profit attributable to shareholders was 2.571 billion RMB, which is a year-over-year decrease of 8.53% and a quarter-over-quarter decrease of 26.63%, falling short of expectations [1]. - The company is optimistic about the ongoing adjustments in its express logistics business and the transformation towards industry specialization, with international business benefiting from the trend of Chinese enterprises expanding overseas [1]. Summary by Sections Express Logistics - In Q3, the express logistics business generated a revenue growth of 14.4% year-over-year, with a total volume of 4.31 billion pieces, an increase of 33.4% year-over-year, surpassing the industry average growth of 13.3%. The company has activated its operational mechanisms, granting frontline management more authority and incentives [2]. - The gross margin for Q3 was 12.5%, down 1.6 percentage points year-over-year and 0.7 percentage points quarter-over-quarter, primarily due to the "first scale, then optimization" strategy which temporarily affected profitability [2]. Supply Chain and International Business - The supply chain and international business saw a revenue decline of 5.3% year-over-year in Q3, mainly due to the drop in sea freight prices affecting international freight forwarding. However, revenues from international express and cross-border e-commerce logistics grew rapidly, with logistics revenue in sectors like industrial equipment and consumer goods increasing by over 25% year-over-year [3]. Shareholder Returns - The company announced an increase in the share buyback plan for the first phase of 2025, raising the total amount from a minimum of 5 billion RMB to a minimum of 15 billion RMB, with a maximum of 30 billion RMB. As of September 30, the company had repurchased 7.4326 million A-shares for approximately 300 million RMB [4]. Profit Forecast and Valuation - The company has revised down its net profit forecasts for 2025-2027 by 9%, 9%, and 7% respectively, to 10.77 billion RMB, 12.92 billion RMB, and 14.94 billion RMB. The corresponding EPS estimates are 2.14 RMB, 2.56 RMB, and 2.96 RMB. The adjustments are attributed to the temporary impact on gross margins from the express logistics strategy and the time required to realize benefits from the industry transformation [5]. - The target price for A-shares is set at 53.10 RMB and for H-shares at 49.30 HKD, with the valuation multiples for 2026 estimated at 8.1x EV/EBITDA for A-shares and 7.0x EV/EBITDA for H-shares, both above their respective averages [5].