[Huachuang Transportation & Industry Performance Review] SF Holding: Q4 2025 net profit attributable to parent +10% year-over-year, optimization strategy has shown results, international business highlights frequently appear

(Source: Huachuang Transportation)

1. The company releases 2025 annual report: Q4 2025 performance exceeds expectations

1. Revenue: In 2025, the company achieved revenue of 308.2 billion yuan, up 8.4% year-over-year; express logistics revenue was 228.6 billion yuan, up 11.1%; supply chain and international segments revenue was 72.9 billion yuan, up 3.5% YoY. In Q4, revenue reached 82.97 billion yuan, up 7.0% YoY.

By business segment: In 2025, express delivery operating revenue was 131.1 billion yuan, up 7.2%; the company continued to deepen its presence in cultural tourism, events, industrial, and other diversified scenarios, fueling business growth. Economic express delivery revenue was 32.1 billion yuan, up 17.6%. Freight business revenue was 42.1 billion yuan, up 11.9%, with cargo volume increasing over 27% YoY. Cold chain and pharmaceutical business revenue was 10.6 billion yuan, up 8.1%. Same-city instant delivery revenue was 12.7 billion yuan, up 43.4%.

2. Profit: In 2025, net profit attributable to parent was 11.12 billion yuan, up 9.3% YoY; Q4 net profit was 2.81 billion yuan, up 10.0% YoY.

By business segment: Express and heavy goods division profit was 10.6 billion yuan in 2025, down 3.5%, mainly due to market expansion strategies and strategic investments; same-city instant delivery division profit was 280 million yuan, up 109.7%, doubling; supply chain and international division profit was 190 million yuan, turning profitable, an increase of 950 million yuan compared to 2024. Additionally, during the reporting period, the company transferred three wholly owned property-holding subsidiaries to Southern SF Logistics REIT, generating equity disposal gains of 590 million yuan (after tax).

Quarterly view: Net attributable to parent for Q1-4 was 2.23, 3.50, 2.57, 2.81 billion yuan respectively; non-recurring net profit attributable to parent was 1.97, 2.58, 2.23, 2.49 billion yuan; Q4 non-recurring net profit increased 11.6% QoQ, with performance surpassing expectations.

3. Operating data: In 2025, logistics volume was 16.7 billion parcels, up 25.4% YoY; average revenue per parcel was 13.7 yuan, down 11.4% YoY, mainly due to product structure changes.

2. Refinement in management yields results

1. In 2025, the company’s gross profit margin was 13.32%, down 0.61 percentage points YoY, mainly due to proactive market expansion strategies and necessary long-term strategic investments; Q4 gross profit margin rebounded to 14.28%.

In an investor relations record on March 30, the company explained that a series of strategic investments made in Q2 and Q3 had a short-term impact on gross profit but were quickly optimized, leading to the highest gross profit margin for the full year in Q4, driven by the following measures:

a) Continued investment in operational support for high-end express services to strengthen product competitiveness.

b) Based on the “first have, then optimize” strategy and “activate operations” mechanism, the company actively adjusted its business structure, increased the proportion of high-value services, and optimized operational models to enhance precise matching of services and resources.

c) The company deepened its focus on customer supply chains and outbound demand, actively invested strategic resources to strengthen supply chain and international service capabilities, supporting the implementation of the second growth curve.

2. During 2025, the operating expense ratio was 8.9%, down 0.3 percentage points YoY; net profit margin attributable to parent was 3.61%, up 0.03 percentage points; Q1-4 margins were 3.2%, 4.5%, 3.3%, 3.4%; non-recurring net profit margin was 3.0%, down 0.21 percentage points YoY.

3. Emphasis on shareholder returns, with a dividend payout ratio of 40% and significant share repurchases

1. Dividends: The total cash dividend for 2025 is expected to be 4.46 billion yuan (dividend payout ratio 40%), plus share repurchases of 1.64 billion yuan, totaling approximately 55% of net profit attributable to parent.

2. Repurchases: The company plans to double the upper limit of its A-share buyback program to 6 billion yuan (from 1.5-3 billion yuan to 3-6 billion yuan), and has initiated a HKD 500 million H-share buyback plan.

4. Highlights of international business

1. Segment performance turned profitable. The aforementioned 2025 supply chain and international segment profit was 190 million yuan; excluding KEX factors, the supply chain and international segment’s net profit increased by 53.50% YoY.

2. SF Express and J&T Express have achieved strategic mutual holdings, with highly synergistic domestic and overseas strategies and resource complementarity. Relying on J&T, SF can strengthen its last-mile delivery capabilities for overseas e-commerce parcels and improve logistics experience for outbound customers.

3. From product export to brand export, the demand for high-efficiency, high-reliability cross-border supply chain logistics will grow increasingly. Coupled with the company’s deep cultivation at the Ezhou hub, early investments are expected to gradually bear fruit.

5. The company maintains a healthy capital structure and strong free cash flow

By the end of 2025, the company’s asset-liability ratio decreased to 49%, with free cash flow remaining abundant at 17.9 billion yuan. We continue to emphasize the core value of SF Express from the perspective of free cash flow. We also believe that future “driverless vehicles + cage vehicles + flexible same-city capacity” can spark more innovations.

6. Investment recommendations:

1. Profit forecast: We expect net profit attributable to parent to be 12.06, 13.62, and 15.50 billion yuan for 2026-2028, corresponding to PE ratios of 16, 14, and 12 times.

2. Target price: We maintain an EV/EBITDA valuation: referencing the valuation of global logistics leader UPS, assigning a 2026 EV/EBITDA multiple of 8x. After adjusting for net debt and cash, the target market cap for A-shares is 266.9 billion yuan, with a target price of 52.96 yuan, representing a 39% upside from the current market value, maintaining a “Strong Buy” rating.

Risk warning: Slower-than-expected growth in express parcel business, higher-than-expected costs.

For detailed investment advice, please refer to Huachuang Securities Research Institute’s report published on April 1, 2026, titled “SF Holding: Q4 2025 Net Profit Attributable to Parent +10%, Optimization Strategies Show Results, International Business Highlights Abound.”

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