The summer of 2026 is proving exceptionally difficult for China's leading express delivery company.
On one hand, a nearly 6-billion-yuan share buyback program has just been completed, with management attempting to use real money to signal confidence to the market. On the other, the stock price has plummeted to a near-decade low, erasing over 370 billion yuan in market value from its historical peak. While the company reported impressive 2025 results, surpassing 300 billion yuan in revenue for the first time with net profit exceeding 11 billion yuan, its reputation for "good service" is being steadily eroded by frequent consumer disputes, such as a case where a 1-million-yuan insured item resulted in only 500 yuan in compensation.
Major Buyback Fails to Halt Stock Decline
On July 21, 2026, S.F.Holding Co.,Ltd. announced the completion of its 2025 Phase 1 A-share buyback plan. By the deadline, the company had repurchased approximately 160 million A-shares, representing 3.04% of the total share capital, for a total consideration of about 5.999 billion yuan.
This was a substantial capital operation. The buyback, which began on September 3, 2025, saw the company twice increase the total amount from an initial range of 1.5-3 billion yuan to a final range of 3-6 billion yuan. A key change occurred on March 30, 2026, when the board altered the purpose of the repurchased shares from "for employee shareholding plans or equity incentives" to "for cancellation and reduction of registered capital." Cancellation-style buybacks are generally viewed in capital markets as an effective means of directly rewarding shareholders and boosting earnings per share.
This was accompanied by a high dividend payout. According to the 2025 annual report, the company planned a total cash dividend of approximately 4.46 billion yuan, representing about 40% of its 2025 net profit. Combined, the buyback and dividend meant a total return to shareholders of 6.22 billion yuan in 2025, or 55% of that year's net profit. In contrast, a peer company's buyback plan was capped at just 50 million yuan.
However, the money spent did not yield the desired effect. On June 1, 2026, the stock hit an intraday low of 34.53 yuan, a new 60-day low. By June 24, the price had fallen further below 31 yuan, touching a near-decade low and leaving the market capitalization at just 160 billion yuan. Compared to its historical high of 124.37 yuan per share in 2021, the stock price has been halved twice, wiping out over 400 billion yuan in market value.
Investor sentiment in online forums reflects deep frustration, with comments about continuous monthly declines and the stock's underperformance being common. The situation where increased buybacks coincide with a falling stock price was likely unforeseen by management.
Who is Voting with Their Feet?
With nearly 6 billion yuan spent on buybacks yet the stock continuing to fall, the question arises: where is the problem?
Data reveals an uncomfortable truth: while the company spent nearly 5.8 billion yuan on repurchases, Hong Kong Securities Clearing Company Ltd., representing northbound capital, significantly reduced its holdings of the company's A-shares by nearly 200 million shares—an amount exceeding the company's own buyback volume during the same period.
Northbound capital includes many long-term European and American funds and sovereign wealth funds, which typically focus on long-term allocation and rarely trade frequently. When such capital begins a large-scale exit, it usually signals a fundamental loss of confidence in the company's fundamentals and future growth.
This is not an isolated incident. In mid-May 2026, HSBC Research downgraded its rating on S.F.Holding Co.,Ltd. from "Buy" to "Hold," citing "short-term headwinds and reduced visibility on cost performance." Its A-share target price was cut from 56 yuan to 45.2 yuan, and its H-share target from 61.6 HKD to 42.1 HKD.
Institutional concerns are not unfounded. Financial reports show that in Q1 2026, the company's sales expense ratio and administrative expense ratio increased year-on-year by 0.1 and 0.4 percentage points, respectively. HSBC Research noted that operating costs grew by 13.3% and sales expenses by 26.8%, leading to margin compression.
A larger hidden risk lies in leveraged funds. The company's financing balance is approximately 4.9 billion yuan, with many margin positions having an average cost above 40 yuan. The current price is approaching forced liquidation levels. Furthermore, the warning lines for major shareholder pledged shares are in the 32-37 yuan range. If a chain reaction is triggered, the stock could face even greater selling pressure.
While management uses real money to tell the market "I am valuable," major capital is voting with its feet, signaling "I don't believe it." This rift reflects deep market skepticism about the company's growth narrative.
Service Reputation Under Strain
Beyond the chill in the capital markets, what troubles the company more is the ongoing decline in its service reputation.
In June 2026, multiple consumers reported to media that valuable items shipped via the company's service were damaged during rough handling, receiving only minimal compensation despite having purchased insurance, leading to questions about the effectiveness of the insurance system.
One extreme case was particularly shocking: a consumer shipped nearly 800,000 yuan worth of new skiing equipment, specifically choosing the "reliable" service and insuring it for 1 million yuan. Upon receipt, over 100 pieces of new skis and ski boots were extensively damaged—boards with chipped edges and finishes, crushed and torn shoeboxes, and scratches inside the boots, essentially turning new products into defective goods.
After over a month of communication regarding compensation for the 1-million-yuan insured shipment, the final settlement offered was merely 500 yuan, a ratio the consumer found unacceptable.
Another alarming case involved a consumer shipping an 88,000-yuan audio amplifier, insured for 50,000 yuan. Upon delivery, the external wooden frame was bent, the carton split, and internal components of the amplifier were loose or detached, rendering the unit inoperable. The initial compensation offer was 5,000 yuan, later raised to 10,000 yuan, which the consumer still rejected, arguing it violated the insurance promise.
Some consumers have described the insurance service as an "IQ tax," where fees are charged based on the full declared value but payouts are drastically reduced. This practice of "generosity in charging, stinginess in compensating" is severely eroding consumer trust.
Worryingly, such disputes are not isolated incidents. In another case, a consumer shipped a graduation sculpture project insured for 5,500 yuan. After damage in transit, the initial compensation offer was 1,000 yuan. Although full compensation was eventually paid following media exposure, the difficult process highlighted systemic issues within the claims system.
Simultaneously, the company's smart locker service has been embroiled in an advertising controversy. Users in multiple locations reported pop-up ads during parcel retrieval with obscure and tiny close buttons (less than 5mm), some featuring "shake-to-jump" functions that trigger redirects with slight phone movement, leading to complaints that "picking up a parcel is like navigating a minefield." Customer service initially stated these pop-up ads "could not be closed temporarily."
This former industry benchmark, which firmly held the high-end market with "speed" and "reliability," now faces tens of thousands of complaints, making the divergence between its service reputation and brand premium increasingly apparent.
Solid Performance Fails to Impress the Market
Objectively speaking, the company's fundamentals are not poor. In 2025, revenue exceeded 300 billion yuan for the first time, reaching 308.227 billion yuan, with net profit attributable to shareholders of 11.117 billion yuan, a year-on-year increase of 9.31%. For Q1 2026, revenue was 74.14 billion yuan, up 6.1% year-on-year, with net profit of 2.53 billion yuan, up 13.1%. The company forecasts H1 2026 revenue between 153.5 and 155.5 billion yuan, representing growth of 5.2% to 6.5%.
Given these solid fundamentals, why does the market remain unimpressed?
The core reason is that the company can no longer tell a "new story" that excites investors. Its main "Express & Heavy Goods Division" achieved 2025 revenue of 217.553 billion yuan, accounting for a high 70.58% of total revenue, but its year-on-year growth rate was only 8.69%. Within this, the most profitable time-sensitive express service revenue grew by 7.24%. The most lucrative core business is gradually approaching its ceiling.
A more severe test lies in profitability quality. In 2025, total express delivery volume reached 16.63 billion parcels, a 25.4% year-on-year increase, but the average revenue per parcel fell to 13.7 yuan, down 11.4% year-on-year. In competing for market share in lower-tier segments, the company has continuously expanded its economy express service. The result of this "trading volume for price" strategy is structural compression of profit margins, with the overall gross profit margin declining by 0.61 percentage points year-on-year.
The reputation built over years through service is also being eroded in the low-price competition.
To address the predicament, Chairman Wang Wei internally implemented an "Activate Operations" plan, shifting from a scale-oriented to a value-oriented approach and actively abandoning the low-price parcel market. Starting from March 2026, the company's express delivery volume experienced three consecutive months of negative growth. Although average revenue per parcel rebounded, the overall express business volume has stagnated.
After abandoning the low-price market, where will new growth come from? This is a significant question mark.
Wang Wei has turned his focus to international business and supply chain solutions. In 2025, supply chain and international business revenue was 76.35 billion yuan, but net profit was only 188 million yuan. To build its international footprint, the company has spent over 20 billion yuan on acquisitions like Kerry Logistics and the construction of Ezhou Huahu Airport. In January 2026, the company also entered into an 8.3-billion-HKD strategic cross-shareholding agreement with J&T Express, taking a 10% stake in J&T while J&T acquired a 4.29% stake in S.F.
However, when these investments will translate into substantial profits remains unknown.
Navigating a Challenging Period
In the summer of 2026, the company stands at a crossroads.
Regarding its stock price, as of July 23, the shares were trading at 33.90 yuan, with a total market capitalization of approximately 174.8 billion yuan. With the 6-billion-yuan buyback "ammunition" spent, what resources remain to stabilize the share price?
On the performance front, revenue continues to grow, but slowing growth and margin pressure are undeniable facts. Having abandoned the low-price market, how does it find a new growth engine?
Regarding reputation, extreme cases like "1 million yuan insurance, 500 yuan compensation" continue to ferment on social media, gradually consuming the brand trust accumulated over many years.
For Wang Wei, this is not just a battle to defend capital but a war to rebuild market trust in the company.
A company secretary's office representative previously responded, stating that market hot money is concentrated in the technology sector, reducing attention on traditional logistics stocks and impacting the share price. They emphasized that the company's fundamentals are improving and that, in the long run, the stock price will reflect its value.
But whether the market is willing to wait for this "long term" is an unanswered question. Some investors bluntly state that the market is always right, and truly good companies get bid up. For a stock that has fallen for six years, arguments about being undervalued or mispriced hold little weight—the market has already cast its vote over that period.
The title of "Express Delivery Leader" was once the company's most shining badge of honor. But in the summer of 2026, this badge is becoming increasingly burdensome. How to restore confidence in the capital markets, how to regain consumer trust, and how to find a new growth curve—these three major challenges now lie before Wang Wei and the company, awaiting solutions.
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