SF Holdings (002352): Profitability has been steadily improved, share repurchase shows confidence
Event description
In 2024Q1, the company realized an operating revenue of 65.34 billion yuan, up 7.0% year on year; The net profit attributable to the parent company was 1.91 billion yuan, up 11.1% year on year; The net profit not attributable to the parent company was 1.66 billion yuan, up 9.2% year on year.
Event comments
The express transportation business has grown steadily, and the international market has been steadily developed. In 2024Q1, the company's express business (excluding Fengwang) revenue increased by 7.9% year-on-year to 48.35 billion yuan, the express business volume increased by 13.2% year-on-year to 2.96 billion pieces, and the single ticket revenue decreased by 4.7% year-on-year to 16.3 yuan. The company pursues service quality, deepens customer demand, achieves steady growth in business volume, and decreases unit price due to changes in product structure. The demand for international air and sea transportation has stabilized and the freight rate has rebounded, as well as the company has deepened business financing and expanded its international network, driving the supply chain and international revenue up 6.0% year-on-year to 14.63 billion yuan. Among them, the volume of international express delivery increased by 10.3% to 15 million on a year-on-year basis, and the international express delivery market was steadily expanding.
Cost and expense continued to be optimized, and net interest rate steadily increased. In 2024Q1, the gross profit of the company was 8.6 billion yuan, up 1.7% year on year.
Although the macro demand is weak, the company has deepened multi network financing and cost control, and achieved cost reduction. The rate of various expenses has declined steadily. The management expense rate/sales expense rate/R&D expense rate/financial expense rate has dropped 0.97pct/0.04pct/0.01pct/0.24pct year on year, and the management expense has improved significantly. In 2024Q1, the company's other income decreased by 110 million yuan year on year, and the net investment income increased by 90 million yuan year on year. Finally, the company's non net interest rate increased by 0.05 pct year-on-year to 2.93%, an increase of 0.25 pct month on month.
Phase 2 repurchase was launched, demonstrating development confidence. In January 2024, the company launched a buyback plan. Up to now, the amount of buyback has been RMB1.0 billion, and the share capital repurchased is 28 million shares, accounting for 0.58% of the total shares. The company launched the second repurchase plan, with the total amount of repurchase not less than 500 million yuan and not more than 1 billion yuan, and the repurchase price not more than 53 yuan/share, demonstrating the company's confidence in development and further improving the incentive mechanism.
Capital expenditure remained low, and operational net cash flow was healthy. In 2024Q1, the company's capital expenditure accounted for 5.03% of revenue, an increase of 0.22 pct year on year and a decrease of 0.75 pct month on month. The ratio of capital expenditure to revenue remained low. In 2024Q1, the net cash flow from operating activities of the company increased by 10.0% year-on-year to 4.73 billion yuan, and the operating cash flow was abundant.
Profitability has increased steadily and international business growth is expected. The company emphasizes healthy operation, deepens lean management, and its profitability is stable. At the same time, we will orderly promote the reform of operation mode, consolidate the operation of Ezhou aviation hub and improve the international network to build long-term core competitiveness. It is estimated that the net profit attributable to the parent company in 2024/2025/2026 will be 9.32109/12.41 billion yuan respectively, and the corresponding PE valuation will be 19.9/17.0/15.0X respectively. It is recommended to focus on the bottom allocation opportunities and maintain the "buy" rating.
Risk warning
1. The macroeconomic repair was not as expected;
2. Overseas demand is less than expected;
3. Oil prices and labor costs rose significantly.
