SF Intra-city Profit Soars on China's Trillion-Yuan Delivery Wave

HONG KONG – February 03, 2026 – By Kevin Lee

Hangzhou SF Intra-city Industrial Co., Ltd. (09699.HK), China's largest third-party on-demand delivery provider, has projected staggering profit growth for its 2025 fiscal year, signaling both remarkable operational efficiency and its powerful position within the country's exploding on-demand retail market. The company announced it expects revenue to climb by at least 40%, while net profit is forecast to surge by a minimum of 80% to over RMB 238 million. Even more impressively, its adjusted net profit is anticipated to skyrocket by more than 158%, reaching at least RMB 376 million.

This dramatic leap in profitability, far outpacing revenue growth, highlights a successful strategic pivot towards what the company calls "high-quality and healthy growth." It suggests that SF Intra-city has not only captured a significant share of the burgeoning delivery market but has also mastered the complex logistics of turning high volume into high returns, a feat that has proven challenging for many in the high-competition, low-margin delivery sector.

The Profitability Playbook

The forecast for 2025 is not an anomaly but the culmination of a multi-year drive for efficiency. The company first achieved profitability in 2023, reporting a net profit of RMB 64.9 million on revenues of RMB 12.4 billion. That year, its gross profit margin climbed to 6.4%, a significant improvement. This momentum continued through the first half of 2025, where profits attributable to owners doubled year-on-year, reaching a record RMB 137 million.

The key to this success lies in a deliberate strategy that balances scale with sustainability. While competitors engage in fierce subsidy wars to capture market share, SF Intra-city has focused on optimizing its core operations. The widening gap between its revenue and profit growth rates indicates that the company is effectively leveraging economies of scale. As order volume increases, the incremental cost of fulfilling each additional order is decreasing, leading to expanded margins and a healthier bottom line. This focus on operational leverage and premium customer acquisition appears to be a core pillar of its strategy to thrive amidst intense market rivalry.

Beyond the Rider: The Tech-Fueled Delivery Engine

Behind SF Intra-city's impressive financial performance is a sophisticated technological backbone designed for maximum efficiency. The centerpiece of this infrastructure is the proprietary City Logistics System (CLS), an advanced platform that harnesses big data and artificial intelligence to orchestrate the company's vast delivery network.

The CLS functions as the company's central nervous system, intelligently predicting order fluctuations, optimizing rider dispatch, and planning the most efficient routes in real-time. By analyzing countless data points, the system can match orders with the best-positioned riders, minimizing idle time and reducing delivery costs. This digital-intelligent approach is a primary driver behind the firm's ability to improve its resource input-output efficiency and enhance its profit margins.

Further pushing the boundaries of efficiency, the company is integrating unmanned delivery capabilities into its network. Leveraging the pioneering work of its parent, SF Express, which launched drone delivery services in Shenzhen, the firm is exploring how to optimize its capacity structure with automated solutions. Drones like the ARK40, capable of carrying 10-kilogram payloads at speeds of 50 km/h, have demonstrated the potential to slash transit times and reduce logistics costs by over 40% in certain scenarios, particularly in overcoming geographical barriers or fulfilling urgent medical deliveries. While still in early stages of broad deployment, this investment in automation signals a clear strategy to future-proof its operations and build a more resilient, cost-effective delivery network.

The Trillion-Yuan Race

SF Intra-city's growth is unfolding against the backdrop of one of the world's most dynamic consumer markets. According to projections from China's Ministry of Commerce, the nation's on-demand retail market is set to exceed RMB 1 trillion and is expected to grow at an average annual rate of 12.6% between 2026 and 2030. This explosive growth is transforming urban life and creating immense opportunities for logistics providers.

However, the field is crowded and intensely competitive. The market is dominated by giants like Meituan, which holds a commanding share of food delivery, and Alibaba's Ele.me, which is aggressively challenging for a larger piece of the overall instant commerce pie. Analysts predict the market is shifting from a near-monopoly to a duopoly between Meituan and Alibaba, with other strong players like JD.com's Dada Group also vying for position.

In this high-stakes environment, SF Intra-city has carved out a distinct and powerful niche. By positioning itself as a "neutral and open third-party" provider, it avoids direct competition with the e-commerce platforms it serves. Unlike Meituan or Ele.me, which operate within their own ecosystems, SF Intra-city can partner with any business, from local restaurants and florists to large retail chains, without a conflict of interest. This independent status has allowed it to become the largest provider in the third-party segment, building widespread trust and accelerating customer recognition.

Delivering the 'Everything, Now' Lifestyle

The surge in on-demand services is fueled by a fundamental shift in consumer behavior. The convenience of app-based ordering has cultivated a "buy now, get now" expectation, especially among younger demographics. This trend has expanded far beyond food delivery, creating an "everything, now" economy where consumers expect rapid fulfillment for groceries, electronics, medicine, and daily necessities.

Third-party delivery providers like SF Intra-city are the essential infrastructure enabling this transformation. They are turning every physical store into a potential micro-fulfillment center, bridging the gap between online browsing and immediate physical possession. This model is not only thriving in China's megacities but is also rapidly penetrating lower-tier cities and county-level markets, which are becoming the next major growth frontier for digital consumption.

As SF Intra-city continues to scale up and broaden its service scenarios, it is not just delivering packages; it is delivering the very fabric of modern urban convenience. Its ability to adapt to changing consumption patterns and expand the boundaries of on-demand fulfillment will be critical as it seeks to consolidate its competitive position and capture further value in China's fast-evolving local lifestyle service industry.