“Science and Technology Innovation Board Daily”, November 19 (Reporter Xu Cihao) The express delivery industry welcomed the first “A+H” listed company.

SF Holdings (06936.HK) announced today (19th) on the Hong Kong Stock Exchange to offer shares from November 19, 2024 to November 22, 2024. The company plans to sell 0.17 billion H shares globally.

Among them, Hong Kong sales accounted for about 9.5%, international sales accounted for about 90.5%, and 15% over-allotted shares. The offering price will be HK$32.3-36.3 per share offered. H shares are expected to be listed on November 27, 2024. Wang Wei, chairman and general manager of SF Holdings, once said that in addition to receiving more financial support, it is more important to use the international platform of the Hong Kong stock market to accelerate the pace of SF Express's globalization.

SF Holdings also mentioned in its prospectus that the Hong Kong listing will help the company further advance its internationalization strategy, build an international capital operation platform, and enhance its international brand image.

Hong Kong stocks split $6.7 billion before listing

According to the three-quarter report recently disclosed by SF Holdings, net profit attributable to shareholders of listed companies for the first three quarters of 2024 was 7.617 billion yuan, up 21.59% year on year; operating income was 206.861 billion yuan, up 9.44% year on year. Third-quarter revenue was 72.451 billion yuan, up 12.07% year on year; net profit to mother was 2.81 billion yuan, up 34.59% year on year.

As to the reason why the net profit growth rate was significantly higher than the revenue growth rate, SF Express Holdings explained the cost efficiency optimization brought about by resource integration and operational changes.

In fact, in recent years, in the face of the increasingly competitive domestic express delivery market, SF Express Holdings' revenue growth rate has gradually slowed. Revenue growth in 2023 fell to -3.39% from 29.11% in 2022, but maintained a relatively better profit growth rate through internal cost control and efficiency improvements.

It is worth noting that before the Hong Kong stock listing, SF Express made a huge dividend.

In October, SF Holdings announced a special dividend plan to return shareholders and a 2024 mid-term dividend plan, totaling 6.72 billion yuan in cash. Among them, according to the special dividend plan, SF Holdings plans to implement a one-time special cash dividend to all shareholders (that is, A-share shareholders) before the H shares are issued and listed. In addition, SF Holdings also proposed a 2024 mid-term dividend plan, with a cash dividend of 4 yuan (tax included) for every 10 shares, with an estimated total interim dividend of about 1.92 billion yuan.

In addition, according to the updated prospectus, SF Express has signed cornerstone investment agreements with Oaktree, Huihan, WT Asset Management, China Taibao, Green Better, Infini, Wind Sabre, Morgan Stanley International, Ghisallo, and Ruijun Asset Management. Cornerstone investors have agreed to comply with certain conditions to subscribe at the sale price or facilitate the total subscription amount of approximately US$0.205 billion (or approximately HK$1.592 billion).

Among them, Green Better is a wholly-owned subsidiary of Xiaomi. In the cornerstone round, Green Better invested 20 million dollars, accounting for 0.09% of the shares.

International sector revenue increased 27.2% year-on-year in the third quarter

SF Holdings first entered overseas markets and operated cross-border business in 2010. In 2019, SF Express successfully integrated DHL's business in China. In 2021, SF Express acquired 51.5% of the shares of Southeast Asian logistics giant Kerry Logistics with a huge investment of 17.555 billion yuan, and Wang Wei, the head of SF Express, personally headed the head of the board of directors of Kerry Logistics. In the fourth quarter of the same year, Kerry Logistics was incorporated into the financial reporting system of SF Express Holdings.

This move is seen as a strong sign that SF Express is speeding up its international layout and elevating its international logistics business to a core strategic position.

The internationalization of SF Express follows a development path from Southeast Asia to the European and American markets. According to SF Airlines' international cargo flights during the 2024 summer and autumn season, Southeast Asia routes account for 37%, while European and American routes account for 10%.

In April of this year, when surveyed by investors, SF Express mentioned that the overseas market is very large and needs to adopt “one country, one policy” and adapt to local conditions. Judging from this year's three-quarter report, the international sector business became the highlight of SF Express Holdings' performance growth, achieving a 27.2% year-on-year increase in supply chain and international sector revenue in the first three quarters.

Zhao Xiaomin, an express logistics expert and CEO of Guanshuo Capital, said in an interview with the “Science and Technology Innovation Board Daily” reporter that through A+H, it is proposed to further enhance SF Express's influence and recognition at home and abroad. However, the main challenge currently facing its internationalization is the development of the aviation sector.

In his view, if logistics efficiency is to be further improved, the expansion of SF Airlines' fleet size has become a problem that needs to be solved urgently. Second, whether it is possible to make full use of the cooperative combat capabilities of SF Airlines and the Ezhou hub to enhance international competitiveness is the key. At the same time, collaboration between SF Express and Kerry Logistics is also critical, which is a key part of its ability to exert brand influence in the international market.