Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Focusing on Asian logistics, transportation, and travel companies

Asian Equities Analyst, Logistics & Transport

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Bifurcated Chinese Express Market Developing

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Independent and original Asian investment research

Aletheia Capital

Aletheia Capital (HK) Ltd. (previously known as Asianomics) combines the extensive knowledge of its experienced team with technology and regulatory changes to disrupt Global Markets business in Asia. The firm is completely independent with no conflicts of interest either on Investment Banking advisory or Capital Markets execution.

Equity Bottom-Up

Leading Chinese express parcels player <a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a> has increased its share of China's domestic express parcels market since launching a new product aimed at price-sensitive merchants in 2Q19.We believe SF can continue to selectively target attractive parcel flows within this segment without giving up profitability. In fact, SF was the only major express company in China to report a YoY increase in gross margin in 3Q19, the first full quarterly result after the launch of its new offering.Given its past focus on B2B shipments and high-ASP overnight shipments and the speed at which it gained share over the last several months, we do not believe investors have digested this development.We therefore suspect the market underestimates SF’s near-term growth potential, which is one reason we continue to rate the stock BUY with a 1-year target price of CNY 57.30, which is based on 15 times 2021E EV/EBITDA.

Leading Chinese express parcels player S.F. Holding (002352 CH) has increased its share of China's domestic express parcels market since launching a new product aimed at price-sensitive merchants in 2Q19.We believe SF can continue to selectively target attractive parcel flows within this segment without giving up profitability. In fact, SF was the only major express company in China to report a YoY increase in gross margin in 3Q19, the first full quarterly result after the launch of its new offering.Given its past focus on B2B shipments and high-ASP overnight shipments and the speed at which it gained share over the last several months, we do not believe investors have digested this development.We therefore suspect the market underestimates SF’s near-term growth potential, which is one reason we continue to rate the stock BUY with a 1-year target price of CNY 57.30, which is based on 15 times 2021E EV/EBITDA.

SFホールディングス、中国国内のエクスプレス市場で急速にシェアを拡大