Fast growth is not surprising; the key is the value: the rare underlying theme of SF Express's same-city profit model

In 2026, concepts like Hong Kong stocks’ consumer sectors and AI took the spotlight, generating buzz through rising volumes. But from a value investing perspective, many companies that continue to deliver solid performance through operational results and cash flow seem somewhat quiet.

The 2025 annual report from SF Express Same City is such a report—an understated but high-quality answer: Revenue of 22.9B yuan, up 45.4% year-over-year; net profit of 278 million yuan, doubling from last year; adjusted net profit of 415 million yuan, up 184.3%, hitting a new record high.

CICC sharply pointed out the reasons for SF Express Same City’s growth in their post-earnings review: In same-city delivery, B-side benefits from increased order volume in the food delivery industry and rising demand for diverse commercial flows. The “neutrality of third-party operators, refined commercial district network management,” and “flexibility of capacity networks” are expected to support order growth among key account merchants; on the C-side, ecological synergy in express delivery has expanded high-quality service scenarios. For the “last mile” delivery business, they mentioned rising demand and integration with the parent company’s courier network.

Clearly, the core message is: As the consumer trend of “everything delivered to your home” continues to evolve, and SF Express Same City’s service level improves, the value of its infrastructure will keep rising. Though brief, this reveals an irreversible trend in the consumer and logistics markets.

The rapid rise in fulfillment value during this year’s fierce instant retail competition

In 2025, instant retail was far from calm—food delivery wars flared up repeatedly, platforms offered “fancy” subsidies, merchants were overwhelmed, and regulators stepped in multiple times to correct course, emphasizing fair competition.

While the overall environment fluctuated, SF Express Same City achieved record-high performance. This indicates that, compared to the gains from external volatility, internal network efficiency improvements—“endogenous benefits”—are more important—or, put another way, compared to the frequently changing performance drivers (such as order volume influenced by subsidy levels), a stable, demand-ready fulfillment network is the industry’s core competitive advantage.

Whether handling more orders during peak times or winning more customers in the expanding instant retail market, such a network is essential.

The “2025 Development Report of the Instant Retail Industry” published by the Ministry of Commerce Research Institute estimates that the instant retail market size will reach 971.4 billion yuan in 2025, surpassing one trillion yuan in 2026. Finding growth from the total volume determines the sustainability of that growth.

And when talking about total volume, the ability to realize profits hinges on the classic “density—elasticity—stability” triangle.

Density refers to enough orders within a region, with a good structure, fewer empty runs by riders, and smooth group orders; elasticity means the network can withstand peaks and extreme weather without collapsing; stability is reflected in on-time delivery rates, complaint and exception control. SF Express Same City’s 2025 performance neatly ties these three points together.

According to the financial report, SF Express Same City’s same-city delivery order volume grew over 55% year-over-year, with revenue growth roughly matching order growth, reflecting rapid scale expansion; the platform’s on-time delivery rate remained around 95%, with an average of 22 minutes within 3 km, and fluctuations during holidays and bad weather did not exceed 3 percentage points, indicating healthy network elasticity and stability; meanwhile, the number of profitable business districts nearly doubled, and the productivity of about 1.46 million active riders increased, driven by increasing order density.

These operational metrics, along with profit improvements shown in the financials, are two sides of the same coin. The market has long used “growing demand in instant retail” to explain industry growth—this is just common sense, as any expanding industry can say that. What truly matters is who improves fulfillment network efficiency and successfully wins more orders.

From the financials, SF Express Same City’s 2025 revenue from same-city delivery was 13.47B yuan, up 47.6%; among this, B2B revenue reached 10.7B yuan, up 60%, and B2C revenue was 2.77B yuan, also double-digit growth; “last mile” business revenue was 9.43B yuan, up 42.4%. This growth efficiency far exceeds the average growth rate of the instant retail market, making it highly valuable.

Additionally, it explicitly mentions that revenue from non-restaurant scenarios (especially supermarkets) grew nearly 80%, with daily orders in counties doubling, covering nearly 2,400 cities and counties, with over 1,400 in rural areas. The “everything to home” and sinking markets are clearly pushing demand for stable, professional fulfillment to new heights. A reshuffle is underway.

The historical pattern of industry division is emerging: instant delivery will inevitably move toward specialization

Any industry, once reaching a certain scale, begins to reveal inherent laws. Many early-stage industries favor vertical integration—platforms handle traffic and fulfillment themselves. But as business matures, standardization and technology dissemination lead to a trend toward horizontal specialization.

Those who are more professional and have network effects advantage will focus on perfecting a specific link, while others will call upon this “infrastructure” through market transactions. Instant delivery is now at this turning point.

Consumers may notice that whether they’re sending documents, buying medicine or phones on platforms, or shopping at Sam’s or ordering milk tea, the frequency of SF Express Same City’s appearance is increasing. This hints at two trends: first, entry points are becoming more dispersed; second, the importance of fulfillment is rising.

Looking at the market landscape, over recent years, traditional food delivery platforms, comprehensive e-commerce, community group buying, live-streaming e-commerce, brand self-operated mini-programs, and offline stores’ private domains each have their own “people, goods, and place” combinations. But consumers care about “ordering anytime, arriving quickly.” Entry points may become less critical, while “minute-level” delivery networks need to be strengthened most.

The value of SF Express Same City aligns precisely with this—an “urban capacity base” open to the whole society. We can also interpret why its “third-party, all-scenario” value is rising.

On one hand, platforms mainly provide “entry + operation systems,” while the service capability and quality of the socialized capacity network are what users perceive most strongly. Besides the 60% growth in B2B revenue and nearly 80% growth in non-restaurant scenarios, the most notable data is that the number of active merchants reached 1.12 million, up 72%, and active consumers exceeded 26 million. The “fulfillment demand” it captures has been recognized by many.

On the other hand, professionalism is key. In a division context, delivery providers must have strong customization capabilities to handle various scenarios, relying on city infrastructure including hardware and service solutions.

SF Express Same City, highly recognized by B-side clients, benefits first from the synergy within SF Group. “Warehousing + trunk line transfer + same-city delivery + ‘last mile’” enable it to offer integrated “warehouse-transport-delivery” solutions. In 2025, monthly billing clients served jointly with SF Group contributed 452 million yuan in external incremental revenue, demonstrating the significant extension effect of this service.

Additionally, there’s an often-overlooked growth driver: actively seeking high-value scenarios and designing new services. For example, on the C-side, SF Express Same City launched exclusive dedicated delivery for high-value, sensitive orders like important documents, valuables, or luggage in tourism scenarios. On the B-side, it develops customized solutions for luxury goods, precision electronics, and fresh produce.

In this process, SF Express Same City continues to leverage industry expertise, introducing tech like autonomous vehicles, gradually expanding from last-mile express delivery to catering, medical logistics, and personal heavy goods across all scenarios.

According to financial disclosures, over 1,000 autonomous vehicles are deployed in 116 cities, mainly handling last-mile short-distance connections and distribution at hubs. They have also successfully implemented in scenarios like food delivery and campus logistics. Recently, a pilot of autonomous freight vehicles in Weifang, Shandong, has demonstrated their role in supplementing demand between small courier runs and larger trucks, enriching the capacity infrastructure. Any user with relevant needs can customize solutions flexibly—truly demand-driven.

Currently, fulfillment is moving toward greater openness and marketization. Neutral third-party delivery, with advantages in professionalism and service network, is gradually recognized as a flexible, accessible infrastructure for all participants. SF Express Same City’s annual report proves it has gradually found its “comfort zone.”

SF Express Same City’s valuation is being reshaped, with a new upper limit

After reading this report, the question returns to Hong Kong stocks. SF Express Same City’s business model is healthy and stable; it was profitable as early as 2023. But after being misunderstood last year as a “food delivery battle” target, its valuation recovery was delayed, only warming up at the start of this year.

Valuing such infrastructure-oriented companies is inherently complex. But recent Hong Kong stock performance offers some reference. Overall, the market is willing to assign higher valuations to companies with “growth certainty + profit certainty,” like the “Big Three” consumer giants—after earnings, some surged, others plummeted; stock prices are driven by performance and expectations.

From this perspective, SF Express Same City’s 2025 report should help shed its “high Beta” label and prompt a reevaluation based on industry momentum. The main themes are straightforward:

First is profit elasticity—especially after returning to profitability, with comprehensive improvements in adjusted net profit, net profit margin, and adjusted net profit margin by 2025. The 184% YoY increase to 415 million yuan confirms the network’s positive operation and ongoing efficiency dividends.

Second is the health of SF Express Same City’s business structure. High growth in B2B, expansion in food and non-restaurant scenarios, “last mile” business, and diversified cash flow streams. Beyond the high prosperity of instant retail, the “last mile” and other businesses are actively exploring new growth points. High-value B2C services like exclusive dedicated delivery rely on “hard” service strength, with higher unit prices and stronger stickiness, enhancing the overall network’s value.

Third is the potential for “fulfillment” to undergo major changes driven by technological trends. The most direct indicator is fulfillment methods—investments in “AI + unmanned” tech, such as autonomous vehicles and related algorithms, can handle orders that are “not economical” for human labor, including night deliveries, extreme weather, long-distance heavy goods, and high-safety-redundancy medical logistics.

This not only enriches service options and enhances customization but also aligns with the broader trend of professional division of labor. It improves overall order density while freeing human resources from low-efficiency, high-risk scenarios to undertake more complex, higher-value services.

From a realization standpoint, this is not just about cost reduction and efficiency improvement, but about building a richer capacity structure and industry solution output. As related technologies and business models mature, the market will increasingly see it as a “multi-capacity dispatching” infrastructure company—an all-round logistics enterprise.

In this context, SF Express Same City’s valuation center will anchor on operational stability and predictable long-term cash flow discounting. All incremental platform, merchant, and consumer demand will eventually reflect in revenue and profit through volume, density, and scenario expansion. The Hong Kong stock market, this undervalued space, will sooner or later reprice assets with “growth certainty + profitability + clear model.” When the market truly recognizes this, it will be a matter of each investor’s judgment.