1H24 results in line with our expectations
SF Intra-City Industrial announced its 1H24 results: Revenue rose 20% YoY to Rmb6.88bn. Gross profit grew 23% YoY to Rmb0.47bn, and GM rose 0.2ppt YoY to 6.9%, a record high. Net profit grew 105% YoY to around Rmb62mn, and net margin rose 0.4ppt YoY to 0.9%, with profit from continuing operations up 39% YoY to about Rmb18mn (net loss from discontinued operations was Rmb14mn in 1H23), in line with our expectations. Annual active merchants rose 45% YoY to 550,000, annual active consumers grew 18% YoY to over 21.9mn, and the number of annual active riders increased 13% YoY to 970,000.
Trends to watch
Intra-city delivery. Due to the firm’s reputation and neutral position as a third-party delivery service platform, the firm cooperates with platforms, maintaining growth in revenue from merchant services and key account (KA) business. In 1H24, the firm's revenue from merchant services rose 19% YoY to Rmb2.87bn. KA business contributed a large amount of incremental revenue, and revenue from new KA orders booked high double-digit growth. We expect the KA business to maintain high growth thanks to the growth of non-food businesses such as new retail and branded beverages. Overall, we expect the firm's full-year revenue from merchant services to grow more than 20% YoY, with higher YoY growth for KA business.
User growth of consumer services boosted order volume growth, with orders for intra-city express delivery doubling. In 1H24, the firm's revenue from its consumer services business grew 20% YoY. Thanks to synergies with express delivery, the firm expanded its business scenarios, and the number of express delivery orders doubled in one-hour delivery services. We expect the company's consumer services business to maintain growth of more than 20% YoY in 2024.
Last-mile delivery: In 1H24, revenue from the last-mile delivery business increased by 20% YoY. This notable growth is attributed to the integration of the firm's transport capacity network with the parent company's express delivery network. Additionally, the firm has expanded its activities beyond last-mile delivery. We believe that as this business continues to grow its penetration within the firm’s extensive delivery network and synergies strengthen, it will remain a positive contributor to the firm’s profitability.