Author | Huang Yu
Editor | Zhou Zhiyu
Last year, the three major logistics giants sprinted to the Hong Kong Stock Exchange. In the end, Goku took the lead in listing. Cainiao chose to withdraw its listing application, while SF Express remained undecided.
More than three months after the initial filing failed, SF Express's second listing in Hong Kong finally ushered in good news. On June 2, SF Express announced that it has recently received confirmation from the China Securities Regulatory Commission on its overseas issuance and listing registration. It plans to issue no more than 625 million overseas listed common shares and list them on the Hong Kong Stock Exchange.
This means that SF Express has finally obtained the “roadmap” to go public in Hong Kong, and may soon re-submit the form to the Hong Kong Stock Exchange. In the near future, SF Express will become the first “A+H” listed express delivery company.
However, the current sluggish capital market is a big mountain in front of SF Express's listing in Hong Kong. Jitu's market performance is a major proof. After going public at the end of last year, Jitu's stock price dropped sharply, and the stock price almost fell.
Cai Chongxin, chairman of Ali and chairman of Cainiao, also said when withdrawing the Cainiao listing plan in March that the capital market is currently in a slump and lacks liquidity, so it makes no sense to push forward such capital market transactions.
Against this background, it is clear that SF Express will not easily break into the capital market.
On August 17 of last year, Wang Wei, chairman and general manager of SF Express Holdings, stated at the shareholders' meeting that it is necessary to choose the best time to go public in Hong Kong and take the initiative.
Although we still have to wait for a better time, SF Express will try hard to push for a second listing in Hong Kong. After all, unlike Cainiao, SF Express has no way back.
When it was first submitted last year, SF Express pointed out that the purpose of the Hong Kong listing is to further promote the internationalization strategy, build an international capital operation platform, and enhance the international brand image, etc., and that the funds raised will also first be used to strengthen international and cross-border logistics capabilities.
SF Express began developing its international business as early as 2010. By 2021, it had also acquired 51.5% of Kerry Logistics's shares for HK$17.555 billion, further improving its strategic layout in the Southeast Asian market.
By the end of 2022, SF Express's international express delivery business covered 84 countries and regions around the world, and cross-border e-commerce services covered more than 200 countries and regions around the world.
Aviation network resources are a major tool for SF Express to expand the global market. According to public information, SF Express has the largest air fleet among domestic express logistics companies, and already has at least 86 aircraft.
Bank of China International analyst Wang Jingtian believes that behind SF Express's quest to go public in Hong Kong, the first is to reflect SF Express's strong financing needs. The balance ratio of SF Express continues to rise, and it is strengthening air transport, which requires high capital in terms of business layout; second, it reflects that the industry has entered a new peak in capital operations, and industry giants have begun a new round of competition.
One industry consensus is that express delivery giants are gradually beginning to develop financing channels and enrich their scale through a new round of capital operations in order to gain an advantage in industry competition.
In a situation where the domestic logistics industry is heavily involved and there is limited room for growth, international logistics, which is booming along with cross-border e-commerce, has become a new battleground for fierce competition among major e-commerce companies.
Even if the listing is withdrawn, international business is a top priority for Cainiao's development today. According to Ali's recent financial report, as of the 2024 fiscal year ending March 31, Cainiao's average daily cross-border package volume in the field of international logistics has exceeded 5 million. This scale exceeds that of today's leading logistics companies in the world.
In the face of fierce market competition, SF Express must accelerate its pace.
Wang Wei said that if SF Express wants to seize opportunities in terms of internationalization, it cannot go slower than friends and merchants. “If we get the opportunity, we will develop well; otherwise, our pace of development will definitely be slower than other business partners.”
In fact, the growth of SF Express's international business is already under considerable pressure. In 2023, SF Express's supply chain and international business achieved tax-free revenue of $59.98 billion, a year-on-year decrease of 31.7%.
SF Express pointed out that this is mainly due to a sharp drop in international air and sea freight demand and freight rates from historical highs in the first half of 2022 to the level of normalization in the 2019 market, which affected the revenue growth rate of the company's international freight and agency business in 2023, but as demand and freight rates stabilized quarterly, the revenue decline continued to narrow.
SF Express needs to change this status quo. After all, its vision is to “ensure that its business scale and company value are the first in Asia and the top three in the world.”
The listing in Hong Kong is a key step for SF Express to inject strength into international business development. It is also related to whether SF Express can continue to be a domestic “courier company” in the future and advance to the top three in the world.
After all, not only are “JD Logistics, Cainiao, etc. around us,” but there are also established international logistics giants such as PS, DHL, and FedEx that are far ahead in the world.
SF Express will do its best to sprint.