Key Takeaways:
JPMorgan Chase & Co. cut its target price on SF Holding Co. (06936.HK) by nearly 15 percent, citing reduced earnings forecasts even as the logistics giant’s first-quarter results beat expectations.
"If operations continue to improve in 2Q to 3Q and the outlook for overseas markets becomes clearer, the share price will have room to catch up," JPMorgan analysts said in a research note, while maintaining an "Overweight" rating on the stock.
The bank lowered its price target for SF Holding’s Hong Kong-listed shares to HKD40 from HKD47 and its Shenzhen-listed A-shares (002352.SZ) to RMB42 from RMB50. The revision follows an average 4 percent cut to JPMorgan's 2026 to 2028 earnings forecasts for the company.
The move comes despite SF Holding reporting a 13.05 percent year-over-year increase in first-quarter net profit to 2.526 billion yuan. However, JPMorgan noted that the market's reaction was muted, as "investor sentiment remains evidence-driven" and the profitability of its subsidiary KLN (00636.HK) and its international supply chain business is not yet clear.
SF Holding's first-quarter results extended a mild growth momentum from the fourth quarter of 2025, with the company strengthening its product mix and continuing a gross margin recovery. Revenue for the quarter rose 6.14 percent to 74.142 billion yuan.
Despite the year-over-year profit growth, net profit declined 10 percent compared to the fourth quarter of 2025. JPMorgan believes sustained operational improvements and a clearer outlook for its international business are necessary for the stock to realize its potential upside.
The target price reduction highlights the market's demand for concrete proof of profitability in SF Holding's newer ventures before fully rewarding its growth. Investors will be closely watching the company's second and third-quarter results for signs of continued operational improvement and clarity on its international strategy.
This article is for informational purposes only and does not constitute investment advice.
