Lyon: The strategic mutual shareholding between Litu Rabbit (01519) and SF Express (06936) can enhance overseas business development.

Lyon released a research report stating that J&T EXPRESS-W (01519) and S.F. Holding (06936) have announced a strategic equity cooperation, with both parties issuing new shares to each other, involving a total of 8.3 billion yuan. Under the agreement, J&T Express will issue nearly 822 million Class B shares to SF Holding at a discount of nearly 14%, while SF Holding will issue approximately 226 million H-shares to J&T Express at a premium of about 3.9%. After the transaction, SF Holding will hold 10% of J&T Express's shares, while J&T Express will hold 4.29% of SF Holding's shares. Lyon currently gives J&T Express and SF Holding target prices of 11.9 Hong Kong dollars and 47.4 Hong Kong dollars, respectively, with both rated as "outperform". Lyon stated that this cooperation will be an important step for both companies in business development, helping to drive growth through the key growth engine of overseas business. It is expected that deeper cooperation will enhance the logistics capabilities of both parties in overseas markets. Based on the issue price, J&T Express is valued at approximately 29 times and 20 times the forecasted P/E ratio for 2025/2026, while SF Holding is valued at approximately 16 times and 14 times the forecasted P/E ratio for 2025/2026.