Citi: SF Holding and J&T EXPRESS-W cooperation enhances both parties' competitiveness, raises J&T EXPRESS-W target price to 13.6 yuan, ranking it as the industry's top choice

According to a report from Citibank, SF Holding (06936.HK) and J&T EXPRESS (01519.HK) announced that they will mutually subscribe to each other's new shares, with a total value of HKD 8.299 billion. The bank believes that the complexity and depth of this cooperation reflect the determination and confidence of both management teams to achieve a "1 plus 1 greater than 2" effect. SF has a strong logistics infrastructure and customer base, while J&T has a well-established local last-mile delivery network in overseas markets. This complementary strengthening will help enhance the competitiveness of both SF and J&T in domestic and global markets. The resource overlap of other domestic operators will make it difficult for them to implement similar strategies.

The bank raised its adjusted net profit forecasts for J&T for the fiscal years 2025 to 2027 by 7%, 7%, and 9%, respectively, and increased the target price from HKD 11.9 to HKD 13.6, maintaining an "outperform" rating and listing it as a top choice in the Chinese logistics sector.

At the same time, the bank lowered its net profit forecasts for SF for the fiscal years 2026 and 2027 by 3%, with the target price for SF (002352.SZ) A shares reduced from RMB 47.4 to RMB 44.1, also maintaining an "outperform" rating