Core Viewpoint - SF Holding reported strong revenue and profit growth in the first half of 2025, with a significant increase in operational efficiency and a focus on long-term employee incentives to enhance competitiveness [1][4]. Group 1: Financial Performance - In H1 2025, the company's operating revenue reached 146.86 billion yuan, a year-on-year increase of 9.3%, while net profit attributable to shareholders was 5.74 billion yuan, up 19.4% [1]. - In Q2 2025, operating revenue was 77.01 billion yuan, reflecting an 11.5% year-on-year growth, and net profit was 3.5 billion yuan, a 21.0% increase [1]. - The company announced an interim dividend plan, distributing 4.6 yuan per 10 shares, totaling approximately 2.32 billion yuan, which is about 40% of the net profit for the first half of the year [1]. Group 2: Operational Highlights - In H1 2025, the express delivery business volume increased by 25.7%, with time-sensitive and economy express volumes growing by 19% and 30%, respectively [2]. - In Q2 2025, the logistics business volume grew by 31.2% to 4.27 billion pieces, with market share increasing by 0.9 percentage points to 8.5% [2]. - The company experienced significant growth in various business segments, with same-city delivery revenue increasing by 38.9% in H1 2025 [2]. Group 3: Profitability and Strategic Initiatives - The gross profit margin in Q2 2025 decreased by 1.4 percentage points to 13.1% year-on-year, attributed to strategic resource investments and flexible pricing strategies [3]. - The company reported a tax-adjusted investment income of 590 million yuan from the disposal of shares in the Southern SF Logistics REIT [3]. - A new employee stock ownership plan was introduced, granting up to 200 million A-shares to core employees, aimed at aligning employee interests with company performance [3]. Group 4: Future Outlook - The company is expected to see a positive trend in its operating cycle, with projected net profits of 11.67 billion, 13.75 billion, and 15.91 billion yuan for 2025, 2026, and 2027, respectively [4]. - The corresponding price-to-earnings ratios for A-shares are forecasted to be 18.0, 15.3, and 13.2 times for the respective years [4]. - The company maintains a high dividend policy and continues to implement share buyback strategies to enhance shareholder returns [4].

Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside of 15% to 35% [4][10]. Core Insights - The company achieved a revenue of 25.113 billion RMB in May 2025, reflecting a year-over-year increase of 11.34%. The express logistics segment contributed 19.381 billion RMB, with a year-over-year growth of 13.36% [5]. - The company has seen a significant increase in business volume, with May 2025 showing a volume of 1.477 billion parcels, a year-over-year increase of 31.76% [5]. - The competitive landscape is favorable for the company, as it focuses on high-end express services and has a strong partnership with major e-commerce platforms, enhancing its market position [5][6]. Summary by Sections Company Overview - The company operates in the transportation industry, with a current H-share price of 45.20 HKD and a target price of 55 HKD [1]. - The company has a market capitalization of approximately 164.592 billion RMB [1]. Financial Performance - The company’s net profit is projected to reach 12.133 billion RMB in 2025, with a year-over-year growth of 19% [9]. - Earnings per share (EPS) is expected to be 2.43 RMB in 2025, reflecting a year-over-year increase of 15.29% [9]. Business Segments - The revenue breakdown shows that express and large parcel services account for 70.4% of total revenue, while supply chain and international services contribute 26% [1]. - The company is strategically investing in infrastructure, such as the Ezhou Airport, to enhance its logistics capabilities and attract global partnerships [5][6].

Investment Rating - The investment rating for the company is "Buy" [6][7]. Core Views - The company is a leading global express delivery enterprise, with a double-digit growth in parcel volume since 2025, driving rapid profit growth. The expansion of the product matrix enhances competitiveness, ensuring future development and a focus on shareholder returns [7]. - In Q1 2025, the company achieved a net profit growth of nearly 20% year-on-year, with a total of 4.876 billion parcels delivered, representing a year-on-year increase of 22.36%, outperforming the industry average [7]. - The company is expanding its presence in various supply chain segments, transitioning from sales logistics to integrated logistics solutions, which is expected to translate into increased parcel volume and revenue [7]. Summary by Sections Company Information - The target price for H shares is HKD 48, with the current price at HKD 40.20. The market capitalization is approximately RMB 164.59 billion [1]. - The company has a price-to-book ratio of 2.13 and a net asset value per share of RMB 18.87 [1]. Recent Ratings - The company has consistently received "Buy" ratings in recent evaluations, with the latest rating issued on March 31, 2025 [2]. Product Mix - The product mix consists of 70.4% express and large parcel services, 3.2% local delivery, and 26.0% supply chain and international services [3]. Financial Performance - For 2025, the company is projected to achieve a net profit of RMB 11.93 billion, with a year-on-year growth of 17%. The earnings per share (EPS) is expected to be RMB 2.39 [9]. - The company’s revenue is forecasted to reach RMB 306.1 billion in 2025, with a year-on-year increase of 7.6% [11]. Shareholder Returns - The company has initiated a share buyback program with a total amount of RMB 500 million to RMB 1 billion, indicating a commitment to shareholder returns [7].

Investment Rating - The report maintains an "Accumulate-A/Buy-H" rating for the company, with a current price of 43.32 RMB/38.40 HKD and a fair value of 48.04 RMB/46.46 HKD [4][44]. Core Views - The company achieved a revenue of 284.42 billion RMB in 2024, representing a year-on-year growth of 10.07%, and a net profit of 10.17 billion RMB, up 23.51% year-on-year [9][12]. - The report emphasizes the synergy between capacity and management cycles, indicating a continuous improvement in profitability [9][10]. - The company is expected to benefit from the recovery of the economic cycle, with projections for EPS of 2.40, 2.80, and 3.34 RMB per share for 2025-2027 [9][44]. Summary by Sections Financial Performance - In 2024, the company reported a total business volume of 13.26 billion parcels, a growth of 11.5% year-on-year, with an average revenue per parcel of 15.52 RMB, down 3.4% [9][12]. - The EBITDA for 2024 was 29.05 billion RMB, with a projected EBITDA of 32.45 billion RMB in 2025 [2]. Revenue Breakdown - The revenue from the express delivery segment was 122.21 billion RMB, growing by 5.85% year-on-year, while the economic express segment generated 27.25 billion RMB, up 8.78% [19][22]. - The freight segment achieved a revenue of 37.64 billion RMB, reflecting a growth of 13.8% [26]. - The same-city delivery segment saw a revenue increase of 24.29%, reaching 90.11 billion RMB [31]. - The supply chain and international segment reported a revenue of 740 billion RMB, up 23.38% [32]. Profitability and Efficiency - The gross margin for 2024 was 13.93%, an increase of 1.11 percentage points year-on-year, attributed to network optimization and cost reduction measures [9][10]. - The report highlights the company's focus on high-quality service and operational efficiency, which has led to improved profitability across various segments [16][19]. Future Outlook - The company is expected to continue its growth trajectory, with revenue projections of 315.85 billion RMB, 351.43 billion RMB, and 392.36 billion RMB for 2025-2027, reflecting growth rates of 11% [40]. - The report anticipates that the company will maintain a stable growth rate in its core segments, driven by economic recovery and strategic investments [40][44].

Business Overview - In 2024, the total business volume reached 13.33 billion parcels, a year-on-year increase of 11.3% [2] - Revenue for 2024 was CNY 284.4 billion, up 10.1% year-on-year [2] - International revenue growth outpaced domestic, with express logistics revenue at CNY 205.8 billion (up 7.7%) and supply chain & international revenue at CNY 70.5 billion (up 17.5%) [2] Financial Performance - EBITDA profit reached CNY 32.7 billion, a year-on-year increase of 11.0%, with an EBITDA margin of 11.5% [2] - Net profit attributable to shareholders was CNY 10.2 billion, up 23.5%, with a net profit margin of 3.6% [2] - The company returned CNY 10.66 billion to shareholders through dividends and share buybacks [2][17] Operational Efficiency - Labor costs as a percentage of revenue (excluding KLN) increased by 0.8 percentage points [10] - Transportation costs as a percentage of revenue (excluding KLN) decreased by 0.8 percentage points [10] - Other operating costs as a percentage of revenue (excluding KLN) decreased by 1.2 percentage points [10] Strategic Initiatives - The company aims to enhance operational agility by empowering frontline decision-making and transitioning from management to service-oriented headquarters [3] - Focus on industry transformation and expanding supply chain capabilities to improve market penetration [3] - Emphasis on cross-border logistics and tailored solutions for clients [3] Growth Segments - Time-sensitive express revenue grew by 5.8%, with a parcel volume increase of 12% [5] - Economic express revenue (excluding Fengwang) increased by 11.8%, with parcel volume up 18% [5] - Fast freight revenue grew by 13.8%, with a volume increase exceeding 20% [6] International Expansion - The international business is positioned as a second growth curve, with international revenue growth exceeding domestic growth by over 2 times in 2024 [28] - The company has secured over 100 overseas supply chain projects, enhancing its cross-border capabilities [7][29] ESG Commitment - The company improved carbon efficiency by 9.3% in 2024, with a 12% reduction in carbon footprint per parcel [18] - Recognized for its ESG practices, ranking high in various international ratings [18] Future Outlook - The company plans to maintain a dual focus on high-end express and economic segments to drive growth [20] - Continuous investment in technology and operational efficiency to enhance service quality and reduce costs [22] - Anticipates stable revenue growth and profitability improvements in 2025 [25]