SF Holdings (002352) In-depth Research Report: FedEx Express Reveals SF Games

SF Holdings (002352) In-depth Research Report: FedEx Express Reveals SF Games
Review of FedEx: 1) Ground2019 fiscal year operating profit exceeds Express.Fiscal 2019 revenue: $ 69.7 billion, with express delivery accounting for 53.6%, 29% on the ground.4%, total 83%; operating profit: 44.7 billion dollars, ground (26.(400 million) for the first time surpasses Express (21).200 million); operating margin: ground sector 12.9%, the highest among all businesses, and the company’s overall operating margin is 6.4%.2) Obvious features of the regional sector merger in the regional sector.Express labor + outsourced transportation + fuel oil totaled 63%, ground labor + outsourced transportation + fuel oil totaled 70%, fuel cost accounted for only 0.1%, and labor 19% is much lower than Express, reflecting the department’s related costs through regional partnerships.3) Bull stock gene: from 1980 to 2019, it will grow 28 times, the highest increase will be 50 times, while the S & P 500 will increase 20 times.5 times, the company outperformed significantly.The excess income is mainly in two stages: a) Overweight ground business with higher operating profit margins in 93-04. Profits have grown rapidly and can outperform. PE increased from 20 times to 35 times, and PS from 0.5 times increased to 1.2 times; b) 05-17 years, after mergers and acquisitions, the United States CR3 market share reached 97%, single ticket gross margin up period, and constantly outperformed the index, the overall business volume growth rate, PE estimates the center 20 times, PS at 0.6-1 times fluctuation.The market performance is clearly related to the gross profit per ticket and the operating profit margin. Under “high operating profit margin + rapid growth of business volume”, prices continue to increase and the mature period after business volume changes is estimated to fluctuate in the central region.4) Enlightenment for SF Holdings: Air superiority and Memphis help each other achieve leapfrog development; more grounded, the ground uses a regional partnership system to meet the e-commerce trend.  Explore SF Chess.1) Revenue structure: 19H1 aging parts revenue was 26.8 billion, accounting for 53.4%; economic parts revenue was 11.5 billion, accounting for 22.9%; new business accounts for 23.7%.2) Chess game 1: Follow the accurate rhythm and re-energize the e-commerce market.In May 19, the company launched a special special product for large e-commerce customers (expected unit price replacement of 5-10 yuan), covering the blank price range in the past, and using the “fill-in” model to stimulate business volume, andImprove loading rate and reduce costs.Effect: After the launch, the business volume increased for 4 consecutive months, and the growth rate in August exceeded 30%.We believe that this product is not a phase product, but a continuous growth point for the company to exert its strength in the future.The price / performance ratio of e-commerce parts is relative, and the coefficient between the customer unit price and the logistics distribution cost directly affects the logistics choice.The drop in express prices will cause more prices to bring products into SF’s distribution range, and SF’s own brand and management can actually help customers reduce hidden logistics costs.  3) Chess game 2: Ezhou Airport, the finishing touch of the aging system.From a cost perspective, the hub structure + axis subdivision operation will make it possible to reduce costs, and at the same time effectively increase the conversion loading rate.More important is whether the surrounding industries in Ezhou can form an enhanced industrial advantage.Wuhan plans that by 2020, the output value of emerging industries will reach 1.65 trillion, assuming logistics costs account for 10%, SF cut into 30%, you can get about 50 苏州桑拿网 billion incremental revenue market.4) Chess Game 3: Entering the supply chain opens up a wider space.The domestic express logistics market has almost completed overtaking by means of consumer express e-commerce express, but now the stage of manufacturing development needs a strong supply chain to help reduce costs and increase efficiency.By acquiring DHL China and Xin Xia Hui, SF, in combination with its own logistics technology chassis, has actually opened up a wider space.  Estimate consultation and investment advice: 1) With reference to FedEx, the current business volume and gross margin recovery period is a better investment period.2) Short-term catalyst: Cost control dividend is being released.Q2 gross profit margin 21.5%, the highest level in the past 8 quarters. Through the increase of Q3 business volume, it is expected that 杭州桑拿网 the growth rate of single quarter profit will be converted earlier.  3) Estimate consultation: The segment estimates that the estimated market value can reach at least about 220 billion.The traditional core profitable business (time-effect + economy) gives 30 times PE, valued at 180 billion yuan; although the new business is not yet profitable, but the rapid growth has a profitable dawn, giving 2 times PS, market value of 37.2 billion (12 billion heavy goods + 5 billion cold shipments +1.6 billion in the same city = 18.6 billion). Without considering the investment of SF Technology, we believe that the company’s market value can reach at least 217.2 billion, corresponding to a target price of 50 yuan, which is 20% more than the current 182.8 billion market value.  Risk reminder: Capital expenditure is too large, and the expansion of the economic scale affects the company’s timepiece business.