Core Insights - The romantic economy was significantly boosted during the 520 festival, with a notable increase in demand for instant delivery services, particularly for flowers and food items [1][2] - On May 20, flower orders surged over 9 times compared to the previous day, while beverage orders increased by 143% and fast food orders rose by 98% [1] - The "exclusive delivery" service gained popularity, with nationwide order volume increasing by 369%, and in Shenzhen, the growth exceeded 8 times [1] Delivery Trends - Instant delivery platforms played a crucial role in facilitating the purchase of gifts, with online channels being the primary method for consumers [1][2] - The peak delivery time on May 20 was between 6 PM and 7 PM, highlighting the convenience for working individuals [2] - The total delivery distance for flower and cake orders exceeded 6 million kilometers on the festival day [1] Market Dynamics - The demand for instant delivery services extended to various platforms, including Douyin and Alibaba, with significant growth in beverage and fast food orders [2] - The lower-tier markets also showed strong enthusiasm, with supermarket and department store orders increasing by 99% [2] - The company utilized a flexible network and intelligent scheduling system to enhance delivery efficiency, particularly for fragile items like flowers and cakes [2][3] Consumer Experience - The "pick-up and delivery" service provided personalized options for consumers, such as queueing at popular restaurants and timely delivery of flower bouquets [3] - The company effectively captured the full-spectrum demand during the festival, reinforcing its role as a core consumer infrastructure and enhancing overall consumer experience [3]

Core Insights - The romantic economy has been ignited by consumer trends such as timely flower delivery and surprise gifts, leading to a significant increase in demand for same-day delivery services on special occasions like May 20th [1][3] Group 1: Delivery Trends - On May 20th, flower delivery orders surged over 9 times compared to the previous day, with beverage orders increasing by 143% and fast food orders by 98% [1][4] - The "exclusive delivery" service saw a nationwide order increase of 369%, with Shenzhen experiencing over 8 times growth [1][3] Group 2: Consumer Behavior - Nearly 40% of consumers preferred to purchase gifts on the day itself through instant retail platforms, indicating a shift towards immediate gratification rather than pre-planning [3][4] - The trend of online ordering for food and gifts reflects a growing preference for convenience and personalization in consumer experiences [4][8] Group 3: Market Performance - The total delivery mileage for flower and cake orders exceeded 6 million kilometers on May 20th, showcasing the scale of demand [3] - The instant delivery service for platforms like Douyin and Alibaba has helped capture significant market opportunities, with Douyin's order volume increasing by 237% [3][4] Group 4: Operational Efficiency - The company utilized a flexible network and intelligent scheduling systems to enhance delivery efficiency, particularly for fragile items like flowers and cakes [8] - Specialized delivery methods, including careful handling and temperature control, were implemented to ensure service quality [8] Group 5: Regional Highlights - Shenzhen emerged as the top city for flower and cake deliveries, while Beijing achieved recognition for a long-distance delivery of 93 kilometers [6]

Group 1 - The core viewpoint of the articles highlights that despite concerns over a price war in the food delivery market, SF Express's subsidiary, SF Tongcheng, has seen a significant stock price increase of over 30% since May 8, with a maximum increase of over 41%, positioning it as a leader in the instant delivery sector [1] - The competition in the instant retail market, valued in trillions, has created opportunities for third-party instant delivery platforms like SF Tongcheng, which operates independently from any commercial platform and efficiently handles orders from major platforms such as Douyin, WeChat, and Alibaba [1] - SF Tongcheng maintains the highest market share among key accounts (KA clients) in the industry, collaborating with leading brands like McDonald's, KFC, and Starbucks, and is expected to add over 7,500 new KA client stores in 2024, indicating a strong preference for independent logistics by merchants [1] Group 2 - The company has demonstrated robust and sustained profitability, with a 27% year-on-year revenue growth to 15.7 billion yuan in 2024, a doubling of net profit, and an increase in gross margin to 6.8%, making it the only company to achieve continuous profitability since mid-2023 [1] - Analysts from Guohai Securities note that the local lifestyle market is experiencing significant flow diversification, and the company's strong brand and leadership position in instant delivery are expected to enhance its market share while benefiting from economies of scale [2] - Data from Questmobile indicates that the average daily usage of SF Tongcheng's rider app increased by 40% year-on-year in April, suggesting that demand for instant delivery services is likely to exceed expectations due to growth in food delivery and last-mile delivery needs [2]

Group 1 - The core viewpoint of the articles highlights the ongoing price war in the instant delivery sector, which is squeezing profit margins across the industry, prompting players to actively respond [2] - SF Express's stock has risen over 30% since May 8, with a peak increase of over 41%, positioning it as a leader in the instant delivery sector amid a reassessment of the value of third-party delivery platforms [2] - The competition in the instant retail market reveals that platforms' own delivery capabilities cannot meet the diverse and time-sensitive delivery demands, creating opportunities for third-party platforms like SF Express [2] Group 2 - The market's revaluation of third-party instant delivery services is reflected in SF Express's recent stock performance, driven by significant trends in local life market traffic polarization and high fulfillment demands across multiple scenarios [3] - According to Questmobile data, the average daily usage of SF Express's rider app increased by 40% year-on-year in April, indicating a positive outlook for demand in the instant delivery industry [3] - Analysts have raised revenue forecasts for SF Express for 2025 and 2026, maintaining a "outperforming the industry" rating with a target price of HKD 13.50, suggesting a 26% upside potential from the current price [3]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [5] Core Views - The company is positioned as the leading third-party instant delivery service provider in China, with significant revenue growth and a confirmed profitability turning point [1][3] - The entry of JD.com into the instant delivery market creates competitive dynamics, presenting growth opportunities for the company [3] Summary by Sections Company Overview - The company is the largest third-party instant delivery platform in China, covering four main consumption scenarios: food delivery, local retail, near-field e-commerce, and near-field services. By the end of 2024, it had 650,000 active merchants and 23.41 million active consumers, with operations in over 2,300 cities and counties nationwide [1][10] - Revenue has rapidly increased, with a projected growth rate of 27% in 2024, and a compound annual growth rate (CAGR) of 24% from 2021 to 2024. The company achieved a gross profit of 1.07 billion yuan in 2024, a year-on-year increase of 35%, with a gross margin of 6.8% [1][18] Business Segmentation - The company's revenue is divided into two main segments: same-city delivery and last-mile delivery. In 2024, the same-city delivery business is expected to grow by 28% year-on-year, contributing 43% to total revenue, while last-mile delivery is projected to grow by 32.5%, accounting for 42% of total revenue [2][27] Competitive Landscape - The instant delivery market in China is experiencing rapid growth, with a projected CAGR of 42.6% from 2018 to 2026. The market size is expected to exceed 2 trillion yuan by 2030, driven by the entry of major players like JD.com, which intensifies competition [3][58] Financial Forecasts - The company is expected to achieve revenues of 19.78 billion yuan in 2025, 24.66 billion yuan in 2026, and 30.62 billion yuan in 2027, with corresponding net profits of 260 million yuan, 414 million yuan, and 593 million yuan respectively. The earnings per share (EPS) are projected to be 0.28 yuan, 0.45 yuan, and 0.65 yuan for the same years [4][3] Investment Recommendations - The report expresses optimism about the company's long-term growth potential in the instant delivery sector, recommending a "Buy" rating based on its market leadership and growth prospects [3][4]

Company Updates - The company announced that during the "May Day" period, the total business volume for SF Same City increased by 87% year-on-year, with supermarket and department store volume up by 177%, beverage volume up by 106%, and last-mile delivery volume up by 102% [1] - According to Questmobile data, the average daily usage of the rider app in April increased by 40% year-on-year, indicating strong demand in the instant delivery sector [1] Industry Commentary - The growth in the takeaway industry is driving demand for last-mile delivery, suggesting that the company's same-city delivery B2B business volume may exceed previous expectations [1] - Questmobile data shows that the average daily usage of KFC and McDonald's increased by 31% and 30% year-on-year, respectively, indicating a positive trend in the takeaway sector [1] - The company is expected to benefit from its refined operational capabilities and flexible logistics network, leading to increased order volumes from key accounts (KA) [1] - The company anticipates that its revenue from merchants will exceed 24% by 2025, with KA business growth expected to be even higher [1] - The company's B2C business is expected to grow steadily alongside macroeconomic demand, supported by synergies with its express delivery services [1] Last-Mile Delivery Insights - The last-mile delivery business is projected to continue contributing revenue beyond expectations due to increased demand from e-commerce returns and the delivery of national subsidy products [2] - The integration of the company's logistics network with its parent company's express network is expected to enhance penetration rates and collaborative effects, further boosting profitability [2] - The company anticipates that its last-mile delivery volume will contribute significantly to revenue growth [2] Profitability Forecast and Valuation - The company has raised its revenue forecasts for 2025 and 2026 by 4.7% and 5.5%, respectively, to 20.343 billion and 25.711 billion [2] - Despite uncertainties in pricing trends within the takeaway industry, the net profit forecasts for 2025 and 2026 remain unchanged at 250 million and 406 million [2] - The company maintains an outperform rating and a target price of HKD 13.50, which corresponds to 0.6x and 0.4x P/S for 2025 and 2026, respectively, indicating a 26% upside potential from the current price [2]

Core Viewpoint - The market is witnessing a shift in perception towards third-party instant delivery platforms, with SF Express (顺丰同城) emerging as a key beneficiary amidst the competitive landscape of food delivery giants like JD, Meituan, and Alibaba [1][2] Group 1: Market Dynamics - The ongoing battle for the instant retail market, initially focused on food delivery, has revealed two main issues: the inability of self-owned logistics from platforms to meet diverse delivery demands and the need for merchants to avoid being tied to a single delivery platform [2] - SF Express, as a neutral third-party delivery platform, is positioned to capitalize on these challenges by providing services across multiple platforms, thus enhancing operational efficiency for merchants [2] Group 2: Competitive Landscape - The market for neutral logistics has been disrupted in 2024, with Dada Group being privatized by JD and Flash Delivery facing significant losses, highlighting the scarcity of leading third-party players [3] - In contrast, SF Express has demonstrated strong and sustained profitability, with a 27% year-on-year revenue increase to 15.7 billion yuan and a doubling of net profit, solidifying its position as the only consistently profitable player in the sector [3] Group 3: Future Outlook - The stock performance of SF Express reflects a market re-evaluation of the value of third-party instant delivery services, driven by the increasing demand for multi-scenario fulfillment and the company's strong brand presence [3] - Analysts predict continued growth for SF Express, with expectations of increased revenue in 2025 and 2026, supported by a 40% year-on-year increase in daily usage of its rider platform [4]

Core Viewpoint - The Hong Kong stock market has experienced a rally, with SF Express (09699.HK) showing significant performance, rising over 33% since May 9, 2023, and reaching a market capitalization of HKD 9.8 billion, driven by increased transaction volumes and a competitive landscape in the instant delivery sector [1][2]. Group 1: Market Performance - SF Express has seen a substantial increase in its stock price, with a cumulative rise of over 33% since May 9, 2023, and a single-day transaction volume of nearly HKD 350 million on May 13, 2023 [1]. - The company's business data during the "May Day" holiday indicates a year-on-year growth of 87% in overall order volume, with significant increases in specific categories such as supermarket orders (up 177%) and beverage orders (up 106%) [1]. Group 2: Competitive Landscape - The competition among major platforms like Meituan, Alibaba, and JD.com in the instant retail sector has intensified, leading to an increase in order volumes for third-party delivery platforms [1][2]. - Leading chain brands are increasingly opting for independent third-party delivery platforms to ensure service stability and reduce reliance on traffic platforms, as exemplified by Luckin Coffee's standardized delivery service provided by SF Express across various platforms [2]. Group 3: Financial Performance - SF Express reported a revenue of CNY 15.746 billion for 2024, representing a year-on-year growth of 27.1%, and a net profit of CNY 132 million, marking a significant increase of 161.8% [3]. - The company is recognized as the only third-party delivery enterprise in the industry that has achieved high revenue growth while maintaining continuous profitability [3].

Group 1 - The core viewpoint of the report is that due to the growth in orders for SF Express (09699), the revenue forecasts for 2025 and 2026 have been raised by 4.7% and 5.5% to 20.343 billion and 25.711 billion respectively, while net profit forecasts remain unchanged at 250 million and 406 million [1] - The company reported a significant increase in order volume during the "May Day" period, with overall business volume up 87% year-on-year, including a 177% increase in supermarket and department store orders and a 106% increase in beverage orders [2] - The demand for instant delivery services is expected to exceed previous expectations due to the growth in the takeaway and last-mile delivery sectors, with the company’s To B business volume anticipated to perform better than expected [3] Group 2 - The last-mile delivery business is projected to continue contributing revenue beyond expectations, driven by increased demand from e-commerce platforms and improved penetration of the company's logistics network [4] - The company is expected to see a net profit margin increase of 0.4 percentage points to 1.2% by 2025, benefiting from economies of scale and an optimized cost structure [5]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 11.5, representing a potential upside of 28.4% from the current price of HKD 8.91 [1][7][14]. Core Insights - The company has demonstrated significant revenue growth, achieving an operating income of RMB 15.746 billion in 2024, a year-on-year increase of 27.1%, marking seven consecutive years of double-digit growth. Net profit reached RMB 132.5 million, up 161.8%, with a net profit margin improvement from 0.4% in 2023 to 0.8% in 2024 [4][10]. - The company is actively exploring autonomous delivery technologies, having launched drone delivery services in Shenzhen in 2022 and expanding to over 30 cities with more than 100 autonomous delivery vehicles by May 2025. The plan is to increase the average active routes from thousands to tens of thousands [11][12]. - The launch of the "Fengpei Cloud" instant logistics system has reinforced the company's leading position in the industry, enabling third-party logistics services to optimize order management and reduce costs for merchants and small logistics companies [5][13]. Financial Performance - In 2024, the company reported a gross profit margin of 6.8%, benefiting from increased order volume and network efficiency improvements. The core growth drivers include significant new orders from key accounts, expansion into lower-tier markets, and rapid growth in non-food delivery scenarios [10][11]. - The company’s revenue breakdown shows that B2B delivery services accounted for 57.9% of total revenue, with significant contributions from major clients and a notable increase in active merchants [10][11]. - The financial projections indicate continued growth, with expected revenues of RMB 19.075 billion in 2025, reflecting a 21.1% increase, and net profits projected to reach RMB 232.9 million, a 75.85% increase [8][18].