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SF Holding (06936.HK)

Subscription Period: November 19 to November 22, 09:30

Offer Price: HKD 32.3 to HKD 36.3

Entry Fee: HKD 7,333.2 per lot of 200 shares

Joint Sponsors: Goldman Sachs, Huatai International, and J.P. Morgan

Expected Listing Date: November 27

SF Holding (06936.HK) initiated its public offering from November 19 to 22, with the aim of globally offering 170 million H-shares. Of this total, 9.5% is available for public sale in Hong Kong, while 90.5% is designated for international placement, including a 15% over-allotment option. Priced between 32.3 and 36.3 HKD per share, with 200 shares per lot, the entry fee per lot is approximately 7333.2 HKD. SF Holding is scheduled to be listed on November 27, with joint sponsorship from Goldman Sachs, Huatai International, and J.P. Morgan.

Company Profile

Established in 1993, SF Holding, as highlighted in a Frost & Sullivan report, is esteemed as the primary integrated logistics service provider in China and Asia based on its 2023 revenue. It also holds the fourth global ranking. SF serves over 2.2 million active monthly customers and around 699 million individual members domestically. It covers all prefecture-level and 2,789 county-level administrative regions, offering a diverse range of services in express delivery, freight, cold chain, city distribution, and supply chain sectors.

SF Holding actively engages in the development of Asia's first and the world's fourth cargo hub airport, the Ezhou Huahu International Airport. On the international front, the company collaborates with Kerry Logistics for comprehensive development, spanning international express, international supply chain, cross-border e-commerce logistics, and international freight forwarding. As of June 2024, SF Holding boasts an extensive global delivery network across 202 countries and regions, operating 99 aircraft and over 186,000 vehicles.

Financial Overview

In the first half of 2024, the group's revenue reached 134.41 billion Chinese Yuan, marking an 8.1% year-on-year increase, while the profit attributable to the company's owners stood at 4.807 billion Chinese Yuan, reflecting a 15.1% year-on-year growth. SF Holding has increased its dividend payout ratio from 20% in 2017 to 35% last year, reaching approximately 40% in the initial half of this year, inclusive of special dividends. The company plans to gradually raise the dividend payout ratio over the next five years, with future dividends contingent on various factors such as profitability, operational strategies, financing landscape, cost of capital, cash flow, and other relevant considerations.

SF Holdings' IPO attracted 10 cornerstone investors, including Sun Hung Kai Properties (00083), China Taiping (02601), Xiaomi (01810), Oaktree, and Morgan Stanley, who subscribed for approximately 1.59 billion Hong Kong Dollars, involving around 43.85 million shares, accounting for about 25.79% of the total global public offering shares. The participation of these cornerstone investors underscores market confidence in SF Holdings' post-listing performance.

Of the proceeds from the company's fundraising, 45% will be allocated to enhance its international and cross-border logistics capabilities, 35% for research and development of advanced technologies and digital solutions, and 10% for operational capital and general corporate purposes.

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✅ 20x purchasing power^