Core Viewpoint - UU Run's recent decision to mandate executives to participate in delivery during peak lunch hours has sparked significant controversy and discussion online, with the company stating that this initiative aims to help management understand the challenges faced by delivery personnel and to review the reasonableness of operational rules [1][3]. Group 1: Management's Experience and Policy Changes - The company has implemented a policy where ordinary employees are required to complete one delivery per month, while executives must complete four deliveries per month, a practice that has been in place for the past ten years [3][5]. - The recent heatwave prompted the company to temporarily enforce this policy to allow management to experience the difficulties of peak delivery times firsthand [3][5]. - Following a seven-day feedback period from this experience, the company identified numerous unreasonable processes and plans to make several adjustments, including lowering penalties for delays, implementing a dual evaluation mechanism for delivery personnel, and introducing dynamic heat subsidies [4][5]. Group 2: Employee Welfare and Miscommunication - The company addressed a misunderstanding regarding an employee who suffered from heatstroke during deliveries, clarifying that the employee was not dismissed but rather that there was a miscommunication with HR [4][5]. - The company has measures in place to support delivery personnel, such as overtime pay and time off, and has criticized inappropriate comments made during the incident [4][5]. - Plans are underway to establish a thousand "care stations" nationwide to provide cooling supplies for delivery personnel, enhancing their welfare and support [4][5].

Core Viewpoint - The Hong Kong stock market has experienced a rally, with SF Express (09699.HK) showing significant performance, rising over 33% since May 9, 2023, and reaching a market capitalization of HKD 9.8 billion, driven by increased transaction volumes and a competitive landscape in the instant delivery sector [1][2]. Group 1: Market Performance - SF Express has seen a substantial increase in its stock price, with a cumulative rise of over 33% since May 9, 2023, and a single-day transaction volume of nearly HKD 350 million on May 13, 2023 [1]. - The company's business data during the "May Day" holiday indicates a year-on-year growth of 87% in overall order volume, with significant increases in specific categories such as supermarket orders (up 177%) and beverage orders (up 106%) [1]. Group 2: Competitive Landscape - The competition among major platforms like Meituan, Alibaba, and JD.com in the instant retail sector has intensified, leading to an increase in order volumes for third-party delivery platforms [1][2]. - Leading chain brands are increasingly opting for independent third-party delivery platforms to ensure service stability and reduce reliance on traffic platforms, as exemplified by Luckin Coffee's standardized delivery service provided by SF Express across various platforms [2]. Group 3: Financial Performance - SF Express reported a revenue of CNY 15.746 billion for 2024, representing a year-on-year growth of 27.1%, and a net profit of CNY 132 million, marking a significant increase of 161.8% [3]. - The company is recognized as the only third-party delivery enterprise in the industry that has achieved high revenue growth while maintaining continuous profitability [3].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company achieved a significant profit increase in 2024, with total revenue reaching 15.746 billion yuan, a year-on-year growth of 27.1%, and a net profit attributable to shareholders of 1.3246 billion yuan, up 161.8% year-on-year [7] - The company is expected to continue its growth trajectory into 2025, with projected revenue of 19.602 billion yuan and net profit of 2.4734 billion yuan, reflecting an 86.73% increase [1][7] - The report highlights the company's strong performance in the 2B local delivery business, with revenue from this segment growing by 28.1% to 6.688 billion yuan, driven by an increase in active merchants and partnerships [7] - The last-mile delivery services also showed robust growth, with revenue increasing by 32.5% to 6.625 billion yuan, supported by enhanced operational efficiency and collaboration with major clients [7] Financial Summary - Total revenue projections for the company are as follows: 15.746 billion yuan in 2024, 19.602 billion yuan in 2025, 23.622 billion yuan in 2026, and 27.874 billion yuan in 2027, with respective year-on-year growth rates of 27.09%, 24.49%, 20.51%, and 18.00% [1][8] - The net profit attributable to shareholders is forecasted to be 1.3246 billion yuan in 2024, 2.4734 billion yuan in 2025, 3.6238 billion yuan in 2026, and 4.9145 billion yuan in 2027, with year-on-year growth rates of 161.80%, 86.73%, 46.51%, and 35.62% respectively [1][8] - The company's earnings per share (EPS) is projected to increase from 0.14 yuan in 2025 to 0.54 yuan in 2027, indicating a strong upward trend in profitability [1][8]