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S.F. Holding Co., Ltd.
Industrials | Integrated Freight & Logistics
⚡ Executive Summary
📊 THE BOTTOM LINE
S.F. Holding Co., Ltd. is a leading integrated logistics provider in China, benefiting from a vast network and a strong brand in the premium express delivery segment. Its diversified services support the booming e-commerce market and offer a resilient business model despite a highly competitive environment.
⚖️ RISK VS REWARD
Trading at HK$35.48, S.F. Holding presents a compelling risk-reward profile, with an average analyst price target of HK$49.15, suggesting significant upside. While market competition and economic fluctuations pose risks, the current valuation reflects growth opportunities in China's expanding logistics sector.
🚀 WHY 6936.HK COULD SOAR
- • Sustained growth in China's e-commerce market fuels demand for SF Holding's premium and diverse logistics services, driving volume and revenue.
- • Strategic international expansion and cross-border logistics capabilities unlock new markets, diversifying revenue streams beyond domestic reliance.
- • Continuous investment in automation and technology enhances operational efficiency, reducing costs and expanding profit margins.
⚠️ WHAT COULD GO WRONG
- • Intense price wars within China's fragmented express delivery market could severely depress margins and erode profitability for SF Holding.
- • A significant economic slowdown in China would directly impact consumer spending and trade, reducing overall logistics demand and growth.
- • Increased regulatory pressures on pricing, environmental standards, or labor costs could raise operational expenses, squeezing the company's profitability.
🏢 Company Overview
💰 How 6936.HK Makes Money
- • S.F. Holding Co., Ltd. engages in logistics and freight forwarding services in China and internationally.
- • The company operates through three segments: Express and Large-volume Logistics; Instant delivery in the same city; and Supply Chain and International.
- • It offers courier, international freight forwarding, domestic and international express services, technical maintenance, freight transportation, and value-added telecommunication services.
Revenue Breakdown
Express and Large-volume Logistics
%
Core services covering domestic and international express and heavy cargo delivery.
Instant delivery in the same city
%
Rapid delivery services for urgent local shipments.
Supply Chain and International
%
Comprehensive supply chain management and global freight forwarding solutions.
🎯 WHY THIS MATTERS
S.F. Holding's diversified logistics services, from express to supply chain management, allow it to capture various market opportunities in China's rapidly growing e-commerce and industrial sectors. This comprehensive offering provides resilience against fluctuations in any single segment.
⭐ Competitive Advantage: What Makes 6936.HK Special
1. Extensive Network & Infrastructure
SF Holding has built a vast and integrated logistics network across China and internationally, including a significant air cargo fleet. This robust infrastructure provides unparalleled operational scale, wide geographical reach, and high capacity, making it difficult for competitors to replicate and ensuring reliable service delivery.
2. Technology & Innovation Leadership
The company continuously invests in advanced logistics technology, including automation for sorting centers, intelligent route optimization, and last-mile delivery solutions like drones. This technological edge enhances operational efficiency, reduces costs, improves delivery speed and accuracy, and provides a superior customer experience.
3. Premium Brand & Service Quality
SF Express is widely recognized for its premium, reliable, and time-sensitive delivery services within China, especially for high-value and urgent shipments. This reputation for quality fosters strong customer loyalty and allows the company to command higher pricing, differentiating it from more price-focused competitors.
🎯 WHY THIS MATTERS
These advantages collectively enable S.F. Holding to maintain a leading position in China's competitive logistics market. The combination of a strong network, technological prowess, and a trusted brand creates a sustainable competitive moat, supporting long-term profitability and growth.
👔 Who's Running The Show
Wang Wei
Founder, Chairman and CEO
Wang Wei, the visionary founder of SF Express, has served as Chairman and CEO since its inception in 1993. Under his leadership, SF Holding has grown into China's largest integrated logistics service provider. He is known for his strategic foresight in building a robust logistics network and driving technological innovation in the industry.
⚔️ What's The Competition
China's logistics and express delivery market is highly competitive and fragmented, characterized by numerous domestic and international players. Key players often compete on speed, reliability, price, and network coverage, with e-commerce giants increasingly investing in their own logistics arms, creating a dynamic and evolving landscape.
📊 Market Context
- Total Addressable Market - China's express delivery market is the world's largest by volume, projected to grow at over 6% CAGR from 2024 to 2029, driven by booming e-commerce.
- Key Trend - Increasing integration of logistics with e-commerce platforms and rising demand for efficient last-mile delivery services are key trends.
Competitor
Description
vs 6936.HK
ZTO Express (ZTO)
A leading express delivery service provider in China, primarily focused on e-commerce parcels, known for its cost-effective and wide network coverage.
Competes directly in the express delivery segment, often at a lower price point, with strong volume driven by e-commerce partnerships, compared to SF Holding's premium focus.
YTO Express (600233.SS)
Another major player in China's express delivery market, offering a broad range of logistics services with a strong focus on network expansion and efficiency.
Offers similar express delivery services, but typically competes on price and broader accessibility, aiming for market share through competitive rates rather than SF Holding's premium service.
STO Express (002468.SZ)
A well-established express delivery company in China, known for its extensive network coverage across various regions and cities.
Directly competes in the general express parcel market, often against SF Holding's economy services, with a strong emphasis on expanding regional presence and market penetration.
JD Logistics (2618.HK)
The logistics arm of e-commerce giant JD.com, providing integrated supply chain solutions and express delivery services, leveraging its robust internal network.
Competes in integrated supply chain and express delivery, especially for B2C e-commerce, benefiting from its deep integration with JD.com's platform, offering a strong ecosystem play similar to SF Holding's diversified strategy.
Market Share - China Express Delivery Market
SF Holding
15%
ZTO Express
20%
YTO Express
12%
STO Express
10%
JD Logistics
8%
Others
35%
📊 Valuation & Analysis
📈 Wall Street Summary
Analyst Rating Distribution - 7 Buy, 3 Strong Buy
7
3
12-Month Price Target Range
Low Target
HK$40
+12%
Average Target
HK$49
+39%
High Target
HK$58
+64%
Current: HK$35.48
🚀 The Bull Case - Upside to HK$58
1. E-commerce Boom & Premiumization
High Probability
China's robust e-commerce growth continues to drive high demand for logistics services. SF Holding's premium service offering positions it well to capture growth in higher-value segments, improving overall margins and revenue per parcel.
2. International Expansion
Medium Probability
Expanding its international network and cross-border logistics capabilities could open significant new revenue streams, especially connecting Chinese businesses to global markets and facilitating international trade, adding substantial top-line growth.
3. Technological Advancement & Automation
Medium Probability
Continued investment in automation (warehousing, sorting, drone delivery) can drastically improve efficiency, reduce labor costs, and enhance delivery speed. This leads to sustained margin expansion and competitive advantage in service quality.
🐻 The Bear Case - Downside to HK$40
1. Intense Competition & Price Wars
High Probability
The Chinese express delivery market is highly competitive and fragmented. Persistent price wars among major players could severely depress SF Holding's profit margins and lead to erosion of its market share.
2. Economic Slowdown in China
Medium Probability
A significant slowdown in the Chinese economy could reduce overall consumer spending and trade volumes. This would directly impact the demand for logistics and express delivery services, leading to revenue and earnings deceleration.
3. Regulatory Scrutiny
Medium Probability
Increased government regulation on logistics pricing, labor practices, or environmental standards could raise operational costs significantly for SF Holding. This would directly impact profitability and potentially limit business flexibility.
🔮 Final thought: Is this a long term relationship?
If you believe premium consumers will continue to prioritize speed and reliability in China's evolving logistics landscape, SF Holding's durable competitive advantages derived from its extensive network, technological leadership, and strong brand offer long-term appeal. The management's proven track record in navigating a dynamic market suggests resilience. However, the persistent threat of intense competition and potential economic headwinds in China remain crucial factors that could derail the thesis over a decade.
📋 Appendix
Financial Performance
Metric
FY 2022
FY 2023
FY 2024
FY 2025 (Est)
FY 2026 (Est)
Income Statement
Revenue
RMB¥267.49B
RMB¥258.41B
RMB¥284.42B
RMB¥302.82B
RMB¥327.65B
Gross Profit
RMB¥33.42B
RMB¥33.14B
RMB¥39.61B
RMB¥39.95B
RMB¥43.22B
Operating Income
RMB¥12.61B
RMB¥11.69B
RMB¥15.39B
RMB¥14.87B
RMB¥16.08B
Net Income
RMB¥6.17B
RMB¥8.23B
RMB¥10.17B
RMB¥10.86B
RMB¥9.55B
EPS (Diluted)
1.27
1.70
2.11
2.42
2.13
Balance Sheet
Cash & Equivalents
RMB¥41.06B
RMB¥41.97B
RMB¥33.94B
RMB¥21.60B
RMB¥22.25B
Total Assets
RMB¥216.84B
RMB¥221.49B
RMB¥213.82B
RMB¥218.24B
RMB¥224.79B
Total Debt
RMB¥58.99B
RMB¥65.90B
RMB¥56.05B
RMB¥53.27B
RMB¥53.80B
Shareholders' Equity
RMB¥86.26B
RMB¥92.79B
RMB¥91.99B
RMB¥95.40B
RMB¥98.26B
Key Ratios
Gross Margin
12.5%
12.8%
13.9%
13.2%
13.2%
Operating Margin
4.7%
4.5%
5.4%
4.6%
4.6%
Return on Equity
7.16
8.87
11.06
10.70
10.70
Valuation Ratios
| Metric | Value | Description |
|---|---|---|
| P/E Ratio (TTM) | 14.66 | The trailing twelve-month Price-to-Earnings ratio indicates how much investors are willing to pay for each dollar of past earnings, reflecting current market sentiment towards profitability. |
| Forward P/E | 14.14 | The forward Price-to-Earnings ratio uses estimated future earnings to gauge valuation, providing insight into market expectations for future profitability. |
| PEG Ratio | N/A | The Price/Earnings to Growth (PEG) ratio adjusts the P/E ratio for expected earnings growth, offering a more complete picture of a stock's value by accounting for growth prospects. |
| Price/Sales (TTM) | 0.70 | The trailing twelve-month Price-to-Sales ratio compares a company's market capitalization to its revenue, useful for valuing companies with little or no earnings. |
| Price/Book (MRQ) | 1.82 | The Price-to-Book ratio measures how much investors are willing to pay for each dollar of a company's book value, indicating its valuation relative to its net assets. |
| EV/EBITDA | 8.71 | Enterprise Value to EBITDA is a valuation multiple that compares the total value of a company to its earnings before interest, taxes, depreciation, and amortization, often used for comparing companies across industries. |
| Return on Equity (TTM) | 0.11 | Return on Equity measures the profitability of a company in relation to the equity of its shareholders, indicating how efficiently management is using shareholder investments to generate profits. |
| Operating Margin | 0.05 | Operating Margin indicates the percentage of revenue left after paying for operating expenses, reflecting a company's operational efficiency and profitability from its core business activities. |
Peer Comparison
| Company | Market Cap (B) | P/E Ratio | P/B Ratio | Revenue Growth (%) | Operating Margin (%) |
|---|---|---|---|---|---|
| S.F. Holding Co., Ltd. (Target) | 210.66 | 14.66 | 1.82 | 8.2% | 4.6% |
| ZTO Express (ZTO) | 148.20 | 12.70 | N/A | 10.0% | N/A |
| YTO Express (600233.SS) | 55.00 | 15.15 | N/A | 11.3% | 6.6% |
| STO Express (002468.SZ) | 44.00 | 18.95 | N/A | N/A | 3.3% |
| JD Logistics (2618.HK) | 90.00 | 11.21 | N/A | 24.1% | N/A |
| Sector Average | — | 14.50 | N/A | 15.2% | 4.9% |