"Large Banks" Huayan lowered the target price for SF INTRA-CITY to 19.5 yuan, growth slows but profitability improves, rating "Buy"

Huiyan published a research report, stating that SF INTRA-CITY (09699.HK) stock price has adjusted by 18% since early February, underperforming the Hang Seng Index's 5% decline during the same period. The firm believes that the market's concerns about the impact of slowing growth in instant delivery orders on profitability are excessive. It expects growth to remain at a high level, and easing cost pressures may become a catalyst for further expanding profit margins. The stock is maintained with a "Buy" rating, with the target price lowered from HKD 21.4 to HKD 19.5.

Considering the tightening regulatory environment, the firm has lowered its forecast for instant delivery order volume for this year and next year by 4% to 7%; overall total revenue forecasts have been reduced by 5% and 7%, respectively. However, taking into account that the "anti-involution" in the instant retail industry will alleviate competitive intensity, and that management is shifting towards efficiency optimization after the rapid expansion of the rider team, the firm has lowered its forecast for the company's unit operating costs for this year and next year by 4% to 7%. Considering all these factors, the forecast for net profit in 2026 has been raised by 3%, but the forecast for 2027 has been lowered by 6%