On July 13, SF Holdings released the performance forecast for the first half of the year, in which the net profit would be around CNY 640 million to CNY 830 million, down by 78% to 83% year on year.
In 2021 Q1, the net loss of SF Holdings reached CNY 989 million. Therefore, the forecast revealed that the company might have a CNY 1.63 billion to CNY 1.82 billion net profit for Q2, a decrease of 36.29% to 42.94% compared with the net profit of CNY 2.86 billion in the same period of 2020.
Although the net profit in Q2 is still in a significant downward trend compared with the same period last year, SF Holdings has successfully turned from loss to profit, which has exceeded some investors' expectations. As a result, its share price rose 2.65% to CNY 67.30 at the close of July 14, with a market value of CNY 306.65 billion.
SF Holdings revealed that the main reasons for the decline in performance were the periodic pressure on costs caused by the new investment projects related to network convergence and resource integration, as well as the profit pressure brought by the low pricing of some products and personnel costs.
The price war in the express industry has become more aggressive as the J&T Express, an Indonesia-headquartered Chinese express delivery company, offering shipping services at an extremely low price level. Although SF Holdings has a better reputation and larger market share, it's still ambiguous whether SF Holdings can form a differentiated competitive advantage with its new business layout and regain investors' trust.