As of the closing of July 3, the stock price of the “express delivery leader” SF Holdings in China’s A-share market was 34.42 yuan per share, a cumulative decline of 70% from the high point of 123.94 yuan per share in February 2021, shrinking its market value from over 500 billion yuan to the current 165.8 billion yuan.
Facing the downturn in stock prices, SF Holdings has launched four rounds of share repurchase plans since March 2022, but it seems that they have not been able to reverse the decline in stock prices.
Financial data indicates that according to its prospectus, the company’s revenue for the years 2021 to 2023 were 207.187 billion yuan, 267.49 billion yuan, and 258.409 billion yuan respectively, with profits of approximately 4.382 billion yuan, 7.057 billion yuan, and 7.912 billion yuan during the same periods.
However, the company’s performance seems not to have met market expectations. After SF Holdings released its first-quarter report this year, two institutions immediately lowered their profit forecasts for the company. China International Capital Corporation revised down SF Holdings’ estimated net profit for 2024 from 11.17 billion yuan to 10.125 billion yuan, while Huachuang Securities also adjusted their 2024 net profit forecast from 9.69 billion yuan to 9.32 billion yuan.
Moreover, the impact on the Hong Kong stock market may also be related to the company’s tight financial situation.
The prospectus reveals that from 2018 to 2023, SF Holdings’ debt has increased from 34.7 billion yuan to 118.2 billion yuan, with the debt-to-asset ratio rising from 48% to 53%. The net value of current assets has also sharply decreased in one year, from 18.1 billion yuan (as of December 31, 2021) to 13 billion yuan (as of December 31, 2022).
The rapid increase in SF Holdings’ debt is due to the significant amount of capital it has been using. Since its listing, the company has continuously expanded, requiring massive investments.
In 2017, SF Holdings successfully listed in the A-share market through a reverse merger. It has also carried out multiple rounds of refinancing, raising a total of over 33 billion yuan.
By the end of 2022, the company had used approximately 23 billion yuan of the funds raised. The funds raised in 2019 have been fully utilized, with only 2.8 billion yuan from the 2021 funds remaining unused.
Public records show that SF Holdings was established in 1993, headquartered in Shenzhen, Guangdong Province. Its subsidiary, SF Express, is China’s largest integrated logistics service provider, and SF Airlines, engaged in air freight operations, is currently China’s largest cargo airline.