The annual results of the holding company of China’s biggest courier company, SF Express (顺丰快递), reveal net profits for 2017 of just RMB4.77 billion on a revenue of almost RMB71.1 billion. Generated by delivering 3.05 billion parcels that’s an average of RMB1.56 net profit per delivery–and that’s before recurring deductions. But why does only SF Express have such a low-profit rate in the industry when it charges double what the rest do?

SF Holdings’ revenue was up almost 24% but net profits rose only 14%. The good news is that due to the nature of the company’s spending in 2017, even after deducting non-recurring profits and losses, SF Holdings made a profit of RMB3.7 billion (or RMB1.21 per parcel) which is actually an increase of 40% on the previous year. A dividend of RMB2.20 is to be issued per 10 shares.

A report by Daily Economic News (每日经济新闻) has compiled the figures of SF Express’s competitors (in Chinese) to show that ZTO’s revenues of RMB13 billion (up 33%) netted a profit of RMB3.16 billion (up 54%), close to SF Express’s profit. Competitors Shentong and Yunda have similarly higher profit rates.

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Frank Hersey

Frank Hersey is a Beijing-based tech reporter who's been coming to China since 2001. He tries to go beyond the headlines to explain the context and impact of developments in China's tech sector. Get in...