SF Holding's CFO Expects Profits in Hauling Heavy Load in 2018

(Bloomberg) -- Chinese express-delivery firm SF Holding Co. expects its new logistics services to turn in profits as early as this year as it seeks growth outside of the competitive parcel-delivery business.

The Shenzhen-based company’s heavy-load delivery business has already broken even and is set to be profitable this year, while its cold-chain and international delivery divisions will make money in two to three years, Chief Financial Officer Grace Ng told Bloomberg Television’s Tom Mackenzie in an interview in Beijing.

SF is in the midst of diversifying its logistics services to help boost revenue as earnings last year rose 14 percent to 4.8 billion yuan ($747 million). In addition to delivering business documents and smartphones to customers, SF is increasingly hauling cargo from factory to warehouses, transporting fresh foods and medicine as well as sending goods across borders.

“Our approach is to make sure we maintain a growth margin at around 20 percent,” Ng said. “We expect, in three to five years, all these new businesses will be able to contribute healthy margins.”

SF Holding’s new services accounted for 13.5 percent of total revenue in 2017, up from 10 percent a year earlier. Ng said the company is “cautiously aggressive” in pursuing acquisitions that will complement SF Holding’s capabilities in cold-chain and heavy-load services.

To contact Bloomberg News staff for this story: Dong Lyu in Beijing at dlyu3@bloomberg.net;Tom Mackenzie in Beijing at tmackenzie5@bloomberg.net

©2018 Bloomberg L.P.

With assistance from Editorial Board