Group 1: Financial Performance - In the first half of 2025, the company achieved a business volume of 7.85 billion parcels, a year-on-year increase of 25.7%, significantly exceeding the industry average growth rate [3] - Revenue reached 146.9 billion RMB, up 9.3% year-on-year, with express logistics revenue at 109.3 billion RMB, growing 10.4% [3] - Net profit attributable to shareholders was 5.74 billion RMB, a 19.4% increase year-on-year, with a net profit margin of 3.9%, up 0.3 percentage points [3] - The company plans to distribute a mid-year dividend of approximately 2.32 billion RMB, a 21% increase year-on-year, with a dividend payout ratio of 40% [3] Group 2: Business Segments Overview - Express delivery revenue grew by 6.8%, outpacing domestic GDP growth, with a 19% increase in volume for time-sensitive deliveries [4] - Economic express revenue increased by 14.4%, with a business volume growth of 30%, driven by differentiated product strategies and lean management [6] - Freight revenue rose by 11.5%, with a volume increase of 28%, focusing on industrial clients and optimizing costs through network efficiency [7] - Supply chain and international business revenue grew by 9.7%, with over 60% of China's top 500 companies using the company's international services, a 15 percentage point increase from last year [10] Group 3: Operational Efficiency and Cost Management - The company optimized its cost structure, achieving a gross profit of 19.4 billion RMB, a 4.2% year-on-year increase, despite a slight decline in gross margin to 13.2% [18] - Labor costs as a percentage of revenue increased by 1.9 percentage points, while transportation costs decreased by 0.3 percentage points [20] - Management and R&D expense ratios decreased by 0.5 and 0.2 percentage points respectively, indicating improved operational efficiency [20] Group 4: Strategic Initiatives and Future Outlook - The company launched a "common growth" stock ownership plan to align employee and shareholder interests, covering a wide range of personnel [23][24] - Future strategies include enhancing operational models, reducing nodes, and leveraging resource synergies to improve efficiency and reduce costs [29] - The company aims to maintain a leading position in the logistics market by focusing on customer experience and expanding its service capabilities [34]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company is expected to improve liquidity through the issuance of new H shares and convertible bonds, with a total expected fundraising net amount of approximately HKD 58.33 billion [2][3] - The company has successfully transformed into a comprehensive logistics leader, expanding into various emerging sectors such as express delivery, cold chain, and international logistics, which are expected to enhance profitability and revenue growth [4] - The projected net profit for the company from 2025 to 2027 is expected to grow by 17.1%, 19.7%, and 18.2% respectively, indicating a strong growth trajectory [4] Summary by Sections Fundraising and Liquidity Improvement - The company plans to issue 70 million new H shares at a price of HKD 42.15 per share, which is a discount of approximately 8.8% from the closing price on June 25 [2] - Additionally, the company intends to issue zero-coupon convertible bonds worth HKD 29.5 billion, with an initial conversion price of HKD 48.47 per share, representing a premium of about 5.3% [3] - The funds raised will be used to enhance international and cross-border logistics capabilities, develop advanced technologies, and optimize the company's capital structure [3] Financial Projections - The total revenue for the company is projected to reach HKD 315.54 billion in 2025, with a year-on-year growth rate of 10.9% [5] - The company's gross profit margin is expected to improve from 12.8% in 2023 to 14.8% in 2027 [5] - The earnings per share (EPS) is forecasted to increase from CNY 2.39 in 2025 to CNY 3.37 in 2027 [5] Profitability and Valuation - The company is expected to maintain a strong cash flow, with cash assets amounting to approximately CNY 427.71 billion as of the end of Q1 2025 [3] - The projected price-to-earnings (P/E) ratios for 2025, 2026, and 2027 are 21.1x, 17.6x, and 14.9x respectively, indicating a favorable valuation outlook [4]

Investment Rating - The report maintains a "Neutral" rating for S.F. Holding with a target price of RMB 48.50, based on a current price of RMB 43.12 [2][15]. Core Insights - In FY24, S.F. Holding achieved a revenue of RMB 284.42 billion, representing a year-on-year increase of 10.07%, and a net profit of RMB 10.17 billion, which is up 23.51% YoY [3][12]. - The company is transitioning from a traditional "product-selling" model to a "solution-providing" strategy, which is expected to drive sustained growth [15]. Revenue Performance - The total business volume for 2024 reached 13.33 billion parcels, marking an 11.3% increase YoY, with express logistics revenue of RMB 205.8 billion, up 7.7% YoY [4][13]. - International operations outperformed domestic growth, with supply chain and international business revenue increasing by 17.5% YoY to RMB 70.5 billion [4][13]. Cost Management - The company improved its gross margin by 1.1 percentage points to 13.9% in 2024 through enhanced efficiency in transfer, transportation, and delivery processes [5][13]. Shareholder Returns - S.F. Holding increased its dividend payout ratio from 35% to 40% in 2024, distributing a total of RMB 4.10 billion in dividends, along with a one-time special dividend of RMB 4.80 billion [14]. Earnings Forecast - The projected net profit for FY25-27 is RMB 12.10 billion, RMB 14.38 billion, and RMB 16.45 billion, respectively, with corresponding EPS of RMB 2.43, RMB 2.88, and RMB 3.30 [6][15].

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]