On August 21, SF Holding Co., Ltd. (hereinafter referred to as "SF Express" or "SF Holding") submitted listing application materials to the Hong Kong Stock Exchange, with Goldman Sachs, Huatai International, and JPMorgan Chase as its joint sponsors. If it goes well, SF Express will become another "A+H" listed company in the express delivery industry.
Bedouin Finance learned that as of now, there are three Hong Kong-listed companies in the "SF Express Department", namely SF Express (HK: 09699), SF REIT (HK: 02191) and Kerry Logistics (HK: 00636). SF Holdings has also been listed on the main board of the Shenzhen Stock Exchange on February 24, 2017, with the code "002352".
Recently, the express logistics industry has ushered in a "listing boom". Among them, Alibaba's board of directors approved the launch of Cainiao Group's listing plan on May 18, and it is expected to complete the listing plan in the next 12 to 18 months; Jitu Express submitted a prospectus to the Hong Kong Stock Exchange in June, sprinting to the main board of the Hong Kong Stock Exchange listed.
Prior to this, JD Logistics (HK: 02618), ZTO Express, YTO Express, Aneng Logistics, Kuaigou Taxi, etc. have already been listed on the Hong Kong Stock Exchange. This also means that SF Holdings will compete on the same stage with JD Logistics, Jitu Express, etc. on the Hong Kong Stock Exchange.
As the development potential of the logistics industry grows simultaneously with market competition, can SF Express, which chooses to re-list in Hong Kong, seize the "first opportunity" and win the championship in one fell swoop?
1. Based on the development of global logistics, increase the international market layout
Tianyancha information shows that SF Holdings was established in May 2003 and has invested in two foreign companies. At present, the company's registered capital is 4.895 billion yuan, its legal representative is Wang Wei, and its major shareholders include Mingde Holdings and Hong Kong Securities Clearing Company Limited.
According to the prospectus, Wang Wei, chairman, executive director and general manager of SF Holdings, holds 52.64% of the shares of SF Holdings through Mingde Holdings, and 2.04% of the shares through Shenzhen Weishun, a wholly-owned subsidiary of Mingde Holdings. Holding 54.68% of the shares.
According to the prospectus, SF Holdings, founded in 1993, is a global integrated logistics service provider that provides customers with a full range of product services including express delivery, express delivery, cold delivery, intra-city instant delivery, supply chain solutions and international logistics services. .
Thanks to the development and maturity of e-commerce platforms, the global logistics market has huge market potential and room for development. According to the Frost & Sullivan report, the global logistics expenditure in 2022 will reach 10.8 trillion US dollars, and it is expected to reach 13.5 trillion US dollars in 2027, with a compound annual growth rate of 4.7%.
Among all regions, Asia is one of the largest, fastest growing and least concentrated regions in the global logistics market. In 2022, the total logistics expenditure in Asia will reach 4.9 trillion US dollars, accounting for 45.4% of the global logistics expenditure, and the compound annual growth rate between 2022 and 2027 is expected to be 5.9%.
Specifically, outsourcing logistics services to third parties has become a long-term development trend in the logistics industry. Global third-party logistics spending is expected to grow at a compound annual growth rate of 5.5% between 2022 and 2027, and penetration will also rise from 46.6% in 2022 to 48.4% in 2027.
This trend not only brings about a steady increase in global logistics spending, but also promotes the rise of leading third-party logistics service providers. In order to meet the one-stop, high-quality and international market demand and improve its comprehensive logistics capabilities, SF Express has carried out multiple layouts in terms of strategic integration and business development.
In 2010, SF Express started its cross-border business, mainly serving the outbound logistics needs of Chinese customers. In 2021, SF Express will acquire Kerry Logistics to strengthen the company's capabilities in local and cross-border express delivery, international supply chain and international freight forwarding in Southeast Asia, and further consolidate its international comprehensive logistics capabilities and customer base.
According to the Frost & Sullivan report, in terms of revenue in 2022, SF Express is the largest integrated logistics service provider in China and Asia, and the fourth largest integrated logistics service provider in the world. As of December 31, 2022, SF Express had approximately 1.8 million active monthly settlement customers and approximately 585 million casual order customers.
As of March 31, 2023, SF Express has a global delivery network covering 208 countries and regions, operating 95 aircraft and more than 176,000 vehicles, respectively the largest air fleet and land fleet in Asia, covering 99.7% of cities in China And 97.3% of county-level administrative regions.
2. The revenue is in the unit of 100 billion, and the growth rate of international business is significant
In 2020, 2021 and 2022, SF's operating income will be 153.987 billion yuan, 207.187 billion yuan and 267.490 billion yuan respectively, and its profits during the year will be 6.416 billion yuan, 4.382 billion yuan and 7.057 billion yuan respectively; non-IFRS EBITDA They are 20.763 billion yuan, 21.781 billion yuan and 28.988 billion yuan respectively.
In the first quarter of 2023, SF Express achieved revenue of 61.048 billion yuan, a decline from 62.984 billion yuan in the same period of 2022; profit during the period was 1.674 billion yuan, an increase of 13.36% from 1.477 billion yuan in the same period of 2022; non-IFRS The next EBITDA is 6.994 billion yuan, which is also an increase compared with the same period in 2022.
In contrast, Jitu Express, which is also in the express delivery industry, has turned losses into profits. In 2020, 2021 and 2022, Jitu's revenue will be US$1.535 billion, US$4.852 billion and US$7.267 billion respectively, maintaining a rapid growth trend, and achieving a profit of US$1.573 billion in 2022.
As a leading express company with a revenue of "100 billion", the net profit margin of SF Holdings in 2020, 2021, 2022 and the first quarter of 2023 is only 4.2%, 2.1%, 2.6% and 2.7%, which are not enough. 10%; gross profit margins were 15.9%, 12.4%, 12.3% and 13.7%, which is also hard to say optimistic.
The root cause lies in the high operating costs of SF Express. In 2020, 2021, 2022, and the first quarter of 2023, SF Express’ operating costs will be 129.458 billion yuan, 181.409 billion yuan, 234.478 billion yuan, and 52.666 billion yuan, accounting for 84.1%, 87.6%, and 87.7% of the revenue for the same period, respectively. and 86.3%.
According to the specific business division, in 2020, 2021, 2022 and the first quarter of 2023, the revenue of SF Express and large-scale business will be 136.675 billion yuan, 160.676 billion yuan, 169.765 billion yuan and 44.561 billion yuan respectively; They are 88.8%, 77.6%, 63.5% and 73.0% respectively, which are the main source of the company's income.
It is worth noting that the proportion of SF’s “famous work” time-sensitive express delivery business revenue is declining. In 2020, 2021 and 2022, the proportion of time-sensitive express business revenue to SF's total revenue will be 58.2%, 48.7% and 39.5%, respectively. After entering 2023, the proportion of this business will rise slightly to 45.9%.
Relying on the layout of foreign markets, in 2020, 2021 and 2022, SF's supply chain and international business will achieve revenue of 13.416 billion yuan, 39.980 billion yuan and 89.917 billion yuan respectively, with a compound growth rate of 158.88%; 8.7%, 19.3% and 33.6%, the second growth curve has been gradually formed.
It is not difficult to see that SF Express has made great efforts in the layout of overseas markets long before seeking a Hong Kong stock listing. And if this listing is successful, it may become a business moat in its overseas market, and play a role in promoting the rapid development of the company's global layout.