Company Overview

SF Holdings is a leading global integrated logistics service provider. Its services include express delivery services, express delivery services, cold freight logistics services, real-time delivery services in the same city, supply chain services and international logistics services, as well as one-stop solutions for multinational companies, large enterprises, small and medium-sized enterprises and bulk order customers. According to Sullivan's report, based on 2023 revenue, the company is the largest integrated logistics service provider in China and Asia, and the fourth largest integrated logistics service provider in the world. As of June 30, 2024, the company has the largest air cargo fleet in Asia, operating a total of 99 cargo aircraft; it also has the world's largest land transport fleet, with a total of 186,000 vehicles. The company's business covers 202 countries and regions around the world.

In 2021/2022/2023, the company achieved revenue of 207.2/267.5/258.4 billion yuan, with a compound annual growth rate of 11.7%; net profit to mother of 4.74/0.63/8.23 billion yuan, with a compound annual growth rate of 31.9%. The funds raised will be used to optimize China's logistics business, expand overseas business capabilities, and develop advanced technology and digital business transformation solutions.

Status and prospects of the industry

The global logistics market is large. According to Sullivan's data, the global third-party logistics market is 5.24 trillion US dollars in 2023, and is expected to reach 0.67 billion US dollars in 2028, with a compound annual growth rate of about 5.2%. Among them, the Asian market is the largest and fastest growing. The compound annual growth rate of the logistics industry market size during the same period was only 4.4%, so the penetration rate of third-party logistics gradually increased. Furthermore, with the diversification, personalization and refinement of the needs of downstream customers, higher requirements are placed on logistics service providers.

To provide comprehensive customized solutions to meet the multi-faceted needs of customers, the direct management model and the advantages of integrated logistics will greatly lead the future development trend of the industry.

The competitive landscape in the logistics industry is fragmented, and participating companies include Chinese and international multinational companies. According to Sullivan's data, the market share of the top five logistics service providers in the world was only 6.2% in terms of revenue in 2023, and the company ranked fourth; in the Chinese market, the company's market share was 2.6%. The domestic and overseas markets all showed a highly fragmented market pattern, and the company had a lot of room for future market share growth. Among the major logistics segments in China, the company's market share is 11.7%/63.9% for express delivery/time-sensitive express delivery, 1.7% for LTL, 2.2% for cold freight logistics, 13.8% for instant delivery in the same city, and 3.2% for the end-to-end supply chain.

Advantages and opportunities

1) Market share growth The company has a complete independent third-party logistics solution that can meet the diverse needs of customers to cover a wider range of customer groups, enhance the company's popularity and penetration rate, and gain greater market share. 2) Increase profits, reduce costs and increase efficiency The company opens up the company's information channels for resource sharing through digital intelligence, further enhances synergy effects, and achieves cost reduction and efficiency. 3) Accelerate overseas market development, accelerate overseas market layout, and further strengthen investment proposals for logistics links between China and the world

The company's current IPO price is HK$32.3-36.3 per share, with a total issuance amount of HK$5.491-6.171 billion, and an estimated total market value of HK$161.054-180.999 billion after the offering. The cornerstone investors of this offering include Oaktree Captial Management, L.P, WT Asset Management Limited, Huihan Co., Ltd., China Pacific Insurance, Shanghai Ruijun Asset Management, Green Better Limited, and many other domestic and foreign institutions, accounting for 27.30% of the total subscription. The company is already listed on A-shares, and the offering price is about 25% off compared to A-shares. If the over-allotment rights are not exercised, PE (TTM) is 14.93-16.78. As the industry leader and the only A+H express delivery company, the valuation is reasonable. Based on comprehensive considerations, we gave this IPO a rating of 5.6, and investors are advised to subscribe.

Risk warning

Overseas business performance falls short of expectations, global economic growth falls short of expectations, geopolitical influences, events affecting brand image, and intensified industry competition