Behind J&T Express and SF Express’s same-city performance boom: China is exporting a complete logistics system

Some consumption data may be modifiable, but logistics data is almost impossible to fake because the speed of cargo flow, in essence, reflects the true temperature of the economy.

By 2025, Chinese logistics companies will generally deliver strong growth results, which not only indicates a demand rebound but also signals a long-overlooked change: Chinese logistics is shifting from serving domestic e-commerce to exporting global supply chain capabilities.

On March 30th, J&T Express and SF Express City Delivery successively delivered results that satisfied the capital market: J&T’s annual parcel volume exceeded 30 billion pieces, revenue grew by 18.5%, and profits even surpassed Bloomberg consensus expectations; SF Express City Delivery’s revenue surged by 45.4%, with net profit reaching a new high.

Although the capital market still seems immersed in old perceptions, the existence of deviations is precisely where the greatest investment opportunities lie: among all undervalued industries, the most explosive are often not the industries that have just improved, but those that have already improved but have not yet been re-priced.

The essence of explosive performance: not recovery, but the realization of efficiency dividends

From revenue, the keyword for the logistics industry in 2025 remains “stability.” But once the perspective shifts to profit, the changes become highly impactful.

Financial reports show that J&T’s full-year adjusted net profit increased by 112.3% year-on-year to $430 million; operating profit even grew by 124% YoY. This violent aesthetic of steady income growth paired with doubling net profit appears to be driven by a rebound in orders due to consumer recovery, but at a deeper level, it is driven by a concentrated release of a “productivity dividend.”

The same logic applies to SF Express City Delivery. During the same period, the company’s adjusted net profit and growth rate both hit record highs, reaching 415 million yuan and 184.3%, with net profit margin steadily increasing. This indicates that the business model of same-city instant delivery, once regarded as “high cost and high uncertainty,” has long proven its feasibility.

The underlying essence is that a multi-year industry restructuring is beginning to bear fruit.

Over the past five years, China’s logistics industry has experienced an intense price war. From Tongda systems to new entrants, the market has long been in a “price-for-volume” competitive state, squeezing profit margins to the limit. But it was during this phase that the industry quietly completed upgrades in automation levels, built higher-density trunk and last-mile networks, and drastically compressed fulfillment times.

The direct effects of these actions are a continuous decrease in unit handling costs for sorting parcels, a significant reduction in marginal delivery costs, and the transformation of logistics services from cost items into competitive advantages.

At the market operation level, the industry naturally shifted from price wars to efficiency battles, with scale advantages effectively translating into profits. J&T’s per-ticket cost in China dropped to $0.28, and SF City Delivery’s order volume grew over 55% YoY—all results of efficiency improvements.

In other words, the successful breakout of latecomers proves that the logistics industry, which previously relied on thin margins and high volume, is building a new generation of modern infrastructure driven by scale and profitability. As profit models continue to be validated, the industry’s valuation anchor is no longer just costs but efficiency.

The real incremental value lies overseas: another set of systemic infrastructure capabilities being exported

Regionally, if we only look at the domestic market, this growth can easily be mistaken for a cyclical recovery. But the true ceiling of the industry is not in China, but overseas.

J&T Express’s expansion path is essentially a replication experiment of Chinese logistics capabilities; and so far, the results are very promising.

Financial reports show that its Southeast Asian operations contributed $4.5 billion in revenue and over $800 million in gross profit for the full year, with adjusted EBIT surpassing the Chinese market at $540 million, becoming an absolute profit engine.

More importantly, in new markets like the Middle East and Latin America, it achieved profitability within just three years, breaking the long-standing perception that logistics expansion abroad is a money-burning process with long-term losses.

This is not simply about transplanting China’s courier model into new markets, but about exporting an entire set of logistics infrastructure.

Markets like Southeast Asia, Latin America, and the Middle East share the commonality of rapid e-commerce growth coupled with long-term underdeveloped logistics infrastructure. For example, Indonesia, with over 17k islands forming a highly dispersed geographical structure, makes large-scale distribution networks inherently difficult to establish.

The core capability of Chinese logistics firms lies precisely in building high-density networks at extremely low costs under complex geographical conditions—from automated sorting systems, to trunk transportation scheduling; from last-mile network management, to coordination with e-commerce platforms; and further to cross-regional digital dispatching and cost control.

What Chinese companies export is no longer just capacity but a comprehensive system capability. Once implemented in emerging markets, this capability quickly generates network effects and creates entry barriers.

Currently, this “export of infrastructure” model is forming a synergistic closed loop. Earlier this year, J&T and SF Express reached cross-shareholdings, forming a global trunk + last-mile collaborative network, essentially strengthening full-chain cross-border supply chain capabilities.

Meanwhile, JD Logistics is also advancing a warehouse + delivery integrated network worldwide, with overseas warehouses covering over 25 countries. The common goal of these actions is that Chinese logistics companies are building global supply chain nodes.

This is very different from the past manufacturing export model. Manufacturing exports products; logistics exports systems. The former’s competition dimension is cost and capacity, while the latter’s is network and efficiency, with clearly higher strategic value and moat.

Why are they still undervalued: using “old cycle stock logic” to price new trends

Despite significant changes in fundamentals, the market’s valuation of these logistics companies delivering entirely new results has not risen accordingly. Why?

The fundamental reason is that the market still clings to three old perceptions: in many investors’ eyes, logistics remains that low-margin, asset-heavy, price-war-driven “hard business.” They are used to valuing it with cycle stock logic, thinking this is just a temporary boom.

But reality has already changed.

First, automation and scale effects are reshaping profit margin structures. At this stage, competition logic shifts from price to efficiency, with leading companies forming structural advantages through network density and technological capabilities. The high growth of J&T and SF City Delivery has proven that the industry is exploring pathways to profitability recovery.

Second, overseas operations are opening long-term growth space. J&T’s market share in Southeast Asia has reached 34.4%, maintaining the top position—this is not just a share but a barrier, a tool for resisting market cycle risks.

Deeper changes lie in the rising strategic importance of logistics. In traditional perceptions, logistics was merely an ancillary service for e-commerce, a cost item; but in global e-commerce competition, logistics has become a core control point. Whoever controls the logistics network holds greater bargaining power and control.

Amazon, Shopee, Temu’s competition is fundamentally a competition of logistics capabilities. This logic is further amplified in Chinese companies’ overseas expansion.

From an investment perspective, this signifies an important shift: logistics companies are transforming from cycle stocks into infrastructure-driven growth stocks. But this shift is not reflected in quarterly growth figures; instead, it manifests gradually through business model reconstruction, often initially overlooked by the market, creating a significant expectation gap.

Epilogue

The explosive performance of companies like J&T Express and SF City Delivery is not a short-term phenomenon but more like a signal that China’s logistics industry is entering a new phase.

In this phase, the domestic market provides efficiency and cash flow, the overseas market offers growth space and strategic depth, and technological and network capabilities form long-term barriers. Although the market still tends to interpret these companies through past frameworks, that very tendency presents an opportunity.

Now is the time to re-evaluate the value of Chinese logistics enterprises.