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SF Intra-city Achieves Interim Profit

Net Profit Exceeded RMB30 Million in 2023 H1

Seizes Diversified Market Demands in

Achieving High-quality and Stable Development

Results Highlights

  • Revenue increased by 28.8% YoY to approximately RMB5,749.2 million.
  • Gross profit and gross profit margin both improved significantly and hit historic highs, gross profit amounted to approximately RMB383.4 million, significantly increased by 112.3% YoY, and gross profit margin was 6.7%.
  • Achieved profit turnaround, net profit was approximately RMB30.3 million in 2023 H1 and net profit margin significantly improved to 0.5%.
  • Revenue from intra-city delivery was approximately RMB3,388.0 million, representing a YoY growth of 15.7%.
  • Revenue from last-mile delivery services amounted to approximately RMB2,361.2 million, significantly increasing by 53.8% YoY.
  • Number of annual active consumers grew to over 18.5 million people for the 12 months ended June 30, 2023, up 50.3% YoY.
  • Revenue from intra-city delivery service for consumers increased to approximately RMB969.2 million, growing by 25.4% YoY.
  • Number of annual active merchants on the platform reached 380,000 as of the 12 months ended June 30, 2023, increasing by 27.2% YoY.
  • In 2023H1, with the consumer market gradually rebounded, SF intra-city successfully achieved healthy and sustainable growth in its core business and reached a milestone by turning into profits ahead of schedule. This milestone underscores the robust quality of its business and strong operational resilience.

HONG KONG, Aug. 28, 2023 /PRNewswire/ — Hangzhou SF Intra-city Industrial Co., Ltd. (“SF Intra-city” or the “Group“; Stock Code: 9699.HK), the largest third-party on-demand delivery service provider in China, announced its unaudited interim results for the six months ended 30 June 2023 (the “Reporting Period” or the “first half of 2023”). During the Reporting Period, the Group’s revenue increased significantly by 28.8% to approximately RMB5,749.2 million compared to the same period last year. Gross profit amounted to approximately RMB383.4 million, representing a remarkable increase of 112.3% YoY and the gross profit margin improved significantly from 4.0% of the same period last year to 6.7%, reaching historic highs in both gross profit and gross profit margin. During the Reporting Period, SF intra-city achieved the first profitable result, with a net profit of approximately RMB30.3 million. Net cash generated from operating activities  amounted to approximately RMB34.3 million.

The management team of SF intra-city said, “The consumer market gradually rebounded in the first half of 2023, adhering to our goal of seeking sustainable, high-quality and steady development, we proactively grasped the opportunities from market demands, and provided customers with cost-effective products and high-quality services. During the Reporting Period, we not only achieved healthy revenue growth but also experienced a substantial improvement in profitability, leading to our first profit turnaround. This milestone underscores the robust quality of our business and our strong operational resilience.”

Demand for intra-city delivery continued to grow and its revenue increased steadily

During the first half of 2023, the Group’s intra-city delivery services generated a 15.7% YoY increase in revenue to RMB3,388.0 million. The steady and high-quality growth in revenue was attributable to: (i) the increasing number of participants and on-demand delivery scenarios under the trends of the local lifestyles and on-demand retail, as well as the accelerating consumption habits of “what you see is what you get”, the growth trend of non-food delivery scenarios remained  stable, revenue increased by 19.7% YoY to RMB1,258.0 million in the first half of 2023,; (ii) the continuing expansion in high-quality on-demand delivery services and personal errand service to consumers, size of annual active consumers continued to grow, such business achieved a growth in revenue of 25.4% YoY to RMB969.2 million in the first half of 2023; (iii) deeper penetration into markets of lower-tier cities and counties, with more extensive coverage and stronger penetration of service scenarios,  revenue from such service grew by 20.2% YoY to RMB1,244.2 million in the first half of 2023; (iv) the speed-up demand for intra-city express delivery calls for the building of an hour-level delivery network capabilities; and (v) the Group’s comprehensive logistics capabilities enabling it to provide professional and high-quality on-demand delivery services to customers, catering to diverse needs and delivery requirements.

Revenue from intra-city to merchants reached about RMB2,420 million and the active merchant base continued to grow

The Group empowers businesses and maintains extensive cooperation with merchants with its open and inclusive on-demand delivery network as well as its professional, efficient and multi-scenario solutions. In the first half of 2023, intra-city delivery to merchants (i.e. To B) achieved a steady YoY increase of 12.2% in revenue to RMB2,418.7 million.

During the Reporting Period, the Group continued to increase its efforts and broaden the channels for the attraction of high-quality merchants from high-potential business districts and cities and counties by improving the offline fulfilment experience to provide merchants with better user experience and higher operational efficiency. The Group focused on understanding merchants’ profiles, dynamically adjusted operational strategies, optimized the merchants structure, and achieved significant and qualitative business growth. For the 12 months ended  30 June 2023, the annual number of active merchants on the platform reached 380,000, an increase of  27.2% YoY.

The Group’s multi-scenario business model and differentiated network capabilities align with the diverse on-demand service demands of both food and non-food businesses. For example, it offered reverse logistic service for e-commerce and intra-city on-demand delivery business for warehouses to stores. In the first half of 2023, revenue from the delivery service for tea and beverages category increased by 80% YoY. Retail categories, including pharmaceuticals, cosmetics, maternity and baby products, pets supplies and jewelry, achieved an over 100% YoY growth. The Group continued to deepen its cooperation with brands such as YSB (藥師幫), Chando (自然堂) and Chow Sang Sang (周生生) among others.

As one of the third-party on-demand delivery service providers with the broadest and deepest access to the platforms, the Group continued to proactively embrace the trend of diversified traffic by committing efforts to build an ecosystem with major local lifestyle service platforms, including: (i) being one of the first major on-demand delivery service providers to integrate with Douyin “group purchase and delivery” (團購配送), the Group has been continuously deepening and expanding its cooperation scenarios and scale, and comprehensively covering Douyin Supermarket delivery within an hour, live-streaming e-commerce and other on-demand retail-to-home services. Together with the platform, the Group co-created service models and standards, bringing a “see-now-buy-now-get-now” consumption experience for users; (ii) the Group is also engaged in multi-scenario cooperation within the Alibaba ecosystem, particularly with Tmall Supermarket. As a major service provider, the Group offered solutions services of “delivery within an hour” (小時達) and delivery within half a day, and successfully supported the platform to deliver high-quality and efficient order fulfilment experience to users in the peak period of many e-commerce festivals;  (iii) the Group deepened its partnership with WeChat, focusing on participating in constructing the WeChat takeaways delivery locator aggregation model and on-demand logistics infrastructure in the first half of 2023 while continuing to expand its cooperation to more cities concurrently; and (iv) the Group integrated with Didi Fast Delivery, leveraging their strong capabilities to create a high-quality on-demand delivery experience, providing intra-city services covering more than 300 cities and further expanding its multi-faceted user service ecosystem. Currently, the Group continues to explore opportunities and experiment with different new collaborative scenarios alongside multiple strategic partners. By harnessing high-quality and efficient on-demand logistics experiences, SF Intra-city aims to contribute to the thriving new ecosystem of local lifestyle services.

The Group strategically cooperates with participants of its parent company SF Holding Group’s ecosystem to devise integrated supply chain solutions for customers, namely “front-end warehousing + mid-end trunk + intra-city on-demand delivery”. Customers can choose their logistics products more easily through integration of the Group’s resources and capabilities within the SF Holding Group. In the first half of 2023, such service contributed a revenue of RMB105.7 million from external customers, representing a YoY growth of 21.9%.

Demand for intra-city delivery for consumers accelerated, drove a YoY increase in revenue to about RMB970 million

For consumers, the Group was committed to offering industry-leading and professional on-demand delivery services. Its “Deliver for Me, Fetch for Me, Purchase for Me, Solve for Me” services cover personal life and work scenarios such as daily errands, medical and healthcare, and business agency services. These services helped to strengthen the consumers’ mindset that “SF Intra-city is the best delivery choice for urgent and valuable items”. In the first half of 2023, revenue from intra-city delivery for consumers reached RMB969.2 million, representing a YoY growth of 25.4%. The revenue growth was mainly attributable to (i) the increasingly stronger consumption habits of “what you see is what you get”; (ii) gaining its consumers’ acknowledgement and trust through its quality service; and (iii) on-demand delivery effectively meeting the speed-up demand for intra-city express delivery and accelerating the penetration of intra-city users. The number of annual active consumers continued to expand, reaching over 18.5 million for the 12 months ended June 30, 2023, representing a year-on-year increase of 50.3%.

Revenue from last-mile delivery service significantly grew by 53.8% to RMB2,360 million

During the Reporting Period, revenue from last-mile delivery service increased by 53.8% YoY, reaching RMB2,361.2 million. The high growth was mainly attributable to: (i) leveraging the Group’s hour-level and minute-level flexible delivery network to meet the need of traditional logistics services acceleration and to deepen collaboration in diversified transport and delivery scenarios, including “parcels collection”, “delivery within half a day”, and “delivery within an hour”; (ii) the steady increase in cooperation scale with major customers as the Group solidifies its delivery network capabilities, leading to more efficient business integration; and (iii) a YoY increase in delivery volume during peak periods such as the Spring Festival and the 618 Shopping Festival, reaching a new peak.

Continues advancement in digitalization and intelligent decision-making in business operations to enhances delivery capabilities

The Group is committed to advancing digitalization and AI decision-making in all business operations. Its City Logistics System (CLS) comprises three core functions: intelligent business planning and marketing management, integrated rider dispatch and intelligent order distribution, and smart operational optimization.

Leveraging the Group’s accumulated technological capabilities, it has further promoted the “SF lntra-city Delivery Cloud” (豐配雲) SaaS real-time logistics system, providing one-stop intra-city logistics solutions for delivery service providers and brands with self-delivery teams. The core functions of the “SF lntra-city Delivery Cloud” system cover all aspects of intra-city delivery, effectively adapting to the delivery needs of different types of merchants, empowering delivery service providers and businesses to achieve omni-channel order and end-to-end efficient management, thereby improving their efficiency and achieving cost-saving.

Looking ahead to the second half of 2023, the management team of SF intra-city said, “As part of the intra-city delivery infrastructure, we will actively seize the market opportunities arising from diversified traffic, local retail development, and the continuous penetration of third-party on-demand delivery services. Going beyond delivery, we will leverage our capabilities and advantages in local lifestyle and on-demand delivery services, focusing on serving customers, industries, and society, and bringing about broader value creation. Simultaneously, we will achieve high-quality business growth and sustainable profit improvement, thereby better fulfilling our mission of ‘bring enjoyable lifestyle to your fingertips’.”