Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no

responsibility for the contents of this announcement make no representation as to its accuracy or completeness

and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the

whole or any part of the contents of this announcement.S.F. Holding Co. Ltd.順豐控股股份有限公司

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 6936)

ANNUAL RESULTS ANNOUNCEMENT

FOR THE YEAR ENDED DECEMBER 31 2024

The board of directors (the “Board”) of S.F. Holding Co. Ltd. (the “Company” together

with its subsidiaries the “Group”) is pleased to announce the audited results of the Group for

the year ended December 31 2024. This announcement containing the full text of the 2024

Annual Report of the Company is prepared with reference to the relevant requirements of the

Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in

relation to preliminary announcement of annual results. The Company’s 2024 Annual Report

will be published on the HKExnew’s website (www.hkexnews.hk) and the Company’s website

(www.sf-express.com) in due course and will be sent to the Company’s shareholders (if

requested).By Order of the Board

S.F. Holding Co. Ltd.GAN Ling

Joint Company Secretary

Shenzhen the PRC March 28 2025

As at the date of this announcement the Board comprises Mr. Wang Wei as chairman and executive director

Mr. Ho Chit Ms. Wang Xin and Mr. Xu Bensong as executive directors; Mr. Chan Charles Sheung Wai

Mr. Lee Carmelo Ka Sze and Dr. Ding Yi as independent non-executive directors.Annual Report 2024 S.F. Holding Co. Ltd. 001

Company Vision

001

To be the well-respected and the world’s leading

digital intelligence logistics solution providerImportant Notice

The Company’s Board of Directors Board of Supervisors Directors The profit distribution plan considered and approved at the Board

Supervisors and senior management hereby guarantee that the Meeting is as follows: based on the total number of Shares at the

contents of this annual report (the “Report”) are true accurate and record date in respect of the implementation of 2024 final dividend

complete and that there are no misrepresentations misleading distribution plan less the Shares in repurchase securities account

statements or material omissions and shall assume individual and of the Company a final cash dividend of RMB4.4 (tax inclusive)

joint legal liabilities. per 10 Shares will be distributed to all Shareholders. The Company

will not carry out bonus issue or conversion of capital reserve into

The Financial Report is prepared in accordance with the

share capital for the year of 2024. Upon preliminary calculation

International Financial Reporting Standards and audited by

using the Company’s total number of Shares as of the date of

PricewaterhouseCoopers which has expressed a standard

this Report and excluding the Shares in the repurchase securities

unqualified opinion thereon.account on the even date the amount of the final cash dividend

The Report has been considered and approved at the 19th meeting distribution is expected to be RMB2.185 billion. Coupled with the

of the sixth session of the Board of Directors of the Company (the 2024 interim cash dividend of approximately RMB1.918 billion

“Board Meeting”) with all Directors present and voting in favor. disbursed the estimated aggregate amount of cash dividends

for 2024 is RMB4.104 billion (excluding the one-off special cash

Forward-looking statements such as future development plans dividend disbursed for returning shareholders which amounted to

contained herein do not constitute any undertaking made by the approximately RMB4.795 billion) accounting for 40% of the profit

Company to investors. Investors are advised to invest rationally and attributable to owners of the Company in 2024. The cash dividend

to take into account possible investment risks. payout ratio has increased steadily from 35% in 2023. The 2024

Investors are advised to pay attention to the major risks currently final dividend distribution plan is subject to consideration and

faced by the Group and the countermeasures the details of which approval at the 2024 annual general meeting of the Company.are set out in the “Risk Management and Internal Controls” of the The Report is prepared in both Chinese and English versions.“Corporate Governance Report.” If there is any ambiguity in understanding the Financial Report

the English version shall prevail. If there is any ambiguity in

understanding of other contents other than the Financial Report

the Chinese version shall prevail.Contents

004 Corporate Information

008 Key Accounting Data and Financial Indicators

013 Chairman’s Statement

016 Management Discussion and Analysis

053 Directors Supervisors and Senior Management

056 Corporate Governance Report

068 Report of Directors

084 Independent Auditor’s Report

088 Consolidated Statement of Profit or Loss

089 Consolidated Statement of Other Comprehensive Income

090 Consolidated Statement of Financial Position

093 Consolidated Statement of Changes in Equity

095 Consolidated Statement of Cash Flows

097 Notes to the Consolidated Financial Statements

185 Definitions004 S.F. Holding Co. Ltd. Annual Report 2024

Corporate Information

Board of Directors H Share Registrar

Executive Directors Tricor Investor Services Limited

Mr. Wang Wei (Chairman) 17/F Far East Finance Centre

Mr. Ho Chit 16 Harcourt Road

Ms. Wang Xin Hong Kong

Mr. Xu Bensong

Legal Advisers

Independent Non-executive Directors As to Hong Kong laws:

Mr. Chan Charles Sheung Wai Herbert Smith Freehills

Mr. Lee Carmelo Ka Sze 23rd Floor Gloucester Tower

Dr. Ding Yi 15 Queen’s Road Central

Hong Kong

Audit Committee

Mr. Chan Charles Sheung Wai (Chairman) Auditor

Mr. Lee Carmelo Ka Sze

PricewaterhouseCoopers

Dr. Ding Yi

Certified Public Accountants and

Nomination Committee Registered Public Interest Entity Auditor

Mr. Lee Carmelo Ka Sze (Chairman) 22/F Prince’s Building

Dr. Ding Yi Central Hong Kong

Mr. Wang Wei

Compliance Adviser

Remuneration and Appraisal Committee

Caitong International Capital Co. Limited

Dr. Ding Yi (Chairlady)

Unit 2401-05 24th Floor

Mr. Chan Charles Sheung Wai

Grand Millennium Plaza

Mr. Lee Carmelo Ka Sze

181 Queen’s Road Central

Risk Management Committee Hong Kong

Mr. Ho Chit (Chairman)

Mr. Chan Charles Sheung Wai Registered Address in the PRC

Mr. Lee Carmelo Ka Sze 3/F Complex Building

SF South China Transit Center No. 1111 Hangzhan 4th Road

Strategy Committee

Shenzhen Airport Caowei Community

Mr. Chan Charles Sheung Wai (Chairman)

Hangcheng Sub-district Bao’an District Shenzhen

Dr. Ding Yi

Guangdong Province the PRC

Mr. Wang WeiAnnual Report 2024 S.F. Holding Co. Ltd. 005

Corporate Information

005

Principal Place of Business in the PRC Joint Company Secretaries

TK Chuangzhi Tiandi Building Ms. Gan Ling

Keji South 1st Road Ms. So Ka Man (FCG HKFCG (PE))

Nanshan District Shenzhen

Guangdong Province the PRC Authorized Representatives

Mr. Ho Chit

Principal Place of Business in Hong Ms. Gan Ling

Kong

9/F Asia Logistics Hub - SF Centre Company’s Website

36 Hong Wan Road Tsing Yi www.sf-express.comNew Territories Hong Kong“SF Holding is the largest integrated logistics service provider inChina and Asia and the fourth largest in the world.1”

Focusing on its logistics ecosystem SF has continually enhanced its portfolio of product and service capabilities and has expanded to cover

time-definite express economy express freight cold chain and pharmaceutical logistics intra-city on-demand delivery international express

international cargo and freight forwarding and supply chain to provide customers with domestic and international end-to-end one-stop

integrated logistics services. Meanwhile leveraging its leading technology and research and development capabilities the Company is

committed in building a digitalized supply chain ecosystem empowering clients with technology to create secure and efficient digital supply

chain systems. SF aspires to be the well-respected and the world’s leading digital intelligence logistics solution provider.The Company has adhered to sustainable and healthy development through visionary and forward-looking strategic planning. For the past 32

years the Company has accurately seized opportunities to expand its scale maintain industry leadership and has become the leading logistics

company in China and Asia. The Company was ranked 415th on the Fortune Global 500. The Company’s flagship product time-definite

express has dominant market leadership in China and through leveraging the network resources and capabilities for its time-definite express

the Company has rapidly and efficiently expanded into new logistics service sub-segments covering from small parcels to bulk and heavy

cargoes from standardized express delivery to customized supply chain services and from China to Asia and further to the world. The Company

is the market leader in China1 across five logistics sub-segments including express freight cold chain intra-city on-demand delivery2 and

supply chain3 and the market leader in Asia1 across four logistics sub-segments including express freight intra-city on-demand delivery2

and international business? in Asia.Looking ahead the Company is committed to becoming the leading global logistics company connecting Asia and the world. While continuously

solidifying its leadership position in the Chinese market the Company continues to expand its market influence across Asia and globally

rapidly replicate its proven domestic know-how to overseas networks. Leveraging its well-recognized brand leading cost advantages and

integrated logistics service capabilities the Company expands the international market drives the sustainable and healthy growth of business

so as to become the go-to logistics partner of global business customers and retail customers to foster shared-growth and create enduring

value together.Extensive Scale Leadership 1 Premium Brand

Largest in Asia No. 1 in Asia No. 1

Express LTL Freight Intra-city On-demand Delivery 2 Customer satisfaction for express

International Business4 services in China

4th Largest Globally No. 1 in China

Integrated logistics service provider1 Express LTL Freight Cold Chain Intra-city 15 years in a row

On-demand Delivery 2 Supply Chain3

1 According to Frost & Sullivan Report in terms of revenue in 2023 3 Among non-state-owned independent third-party supply chain solution providers

2 Among third-party intra-city on-demand delivery service providers 4 Among the integrated logistics service providers in AsiaBusiness Segments

007

Express Logistics

Provide time-definite and high-quality door-to-door delivery service for consumers enterprises and mid- to

high-end brand merchants

Options of half-day delivery same-day delivery next morning/next day delivery taking into account on shipping route and distance;

Time-definite Addressing time-efficient and door-to-door delivery demands such as personal pieces industrial and commercial pieces mid- to high-end brand order

Express fulfillment parcel return services for e-commerce platforms immediate response in JIT mode of production and distribution and other scenarios.Provide cost-effective and quality-guaranteed delivery services mainly for e-commerce platforms and

merchants

We focus on serving e-commerce platforms and merchants with stringent requirement on user experience by virtue of our high-quality fulfillment

capabilities standing out in the market attributable to timeliness and door-to-door delivery;

Economy Express Integrated warehousing and distribution service to serve warehousing needs arising from differentiated service offering and pricing level with

nationwide sub-warehouses smart cloud-based warehouses and integrated warehousing and distribution service.Provide one-stop comprehensive logistics transportation distribution and to-door extended service of large

parcel mainly for enterprise production and commercial distribution and personal life scenarios

Provide large parcels B2C delivery B2B batch shipments less-than-truck-load freight transport and full-truck-load transport;

Large parcel warehousing and distribution moving store distribution integrated delivery and installation and other scenarios;

Freight SF Freight carried out through directly-operated network to serve mid- to high-end customers while SX Freight carried out through franchising network

to serve lower-tier markets.Mainly for customers from three sectors: seasonal and fresh frozen food and pharmaceutical

Seasonal and fresh food logistics: Deliver seasonal agricultural products across China directly from place of origin to consumers;

Cold Chain and Cold chain food logistics: Provide high-standard B2B2C end-to-end temperature-controlled cold chain logistics services;

Pharmaceutical Pharmaceutical logistics: Serve clients throughout the entire pharmaceutical value chain capable of conducting multi-temperature zone control and

Logistics transportation (from -80°C to 25°) and GSP certified pharmaceutical cold storage service.Point-to-point instant delivery service mainly for merchants and customers within the city

Provide customized and standardized product system for business merchants service integrating features of ‘Fetch for Me Deliver for Me Purchase for

Intra-City Me Solve for Me’ for consumer-end users and city-wide on-demand delivery services within average 1 hour.On-demand Delivery

Supply Chain and International

Provide domestic and foreign manufacturers trading enterprises cross-border e-commerce merchants and

consumers with international express delivery overseas local express cross-border e-commerce parcel

delivery and overseas warehousing services

Cross-border standard express: Standard services with high timeliness that meet the needs of cross-border expedite delivery including

high-quality international standard express and cost-effective international special-offer products;

International Cross-border e-commerce delivery: Cost-effective and economical services that meet the needs of cross-border e-commerce platforms and

Express merchants including efficient international e-commerce express and economical international small parcels delivery;

Overseas local express: Offered in Southeast Asian countries such as Thailand Vietnam Malaysia Singapore Indonesia.Provide customers with air sea railway ground and multi-modal freight transport solutions

Air transport: provide air transport services such as pick-up at departure point multiple integration customs clearance delivery to end customer;

International Sea freight: provide sea freight service including all kinds of traditional freight FCL freight and LCL freight;

Cargo and Freight

Forwarding Ground transport: provide innovative and economical road and railway transport services across Europe and Asia.Provide customers in various industries with one-stop domestic and international digital supply chain solutions

Empowering customers with technology leveraging SF’s big data IoT technology and software and hardware system integration capabilities to help

customers establish a global smart supply chain system.Supply Chain008 S.F. Holding Co. Ltd. Annual Report 2024

Key Accounting Data and Financial Indicators

Financial Summary

Results Overview for 2024

Revenue Total assets

RMB284.4 billion 10.1% RMB213.8 billion 3.5%

Equity attributable to owners

Gross profit of the Company

RMB38.9 billion 19.2% RMB92.0 billion 0.9%

EBITDA Basic earnings per share

RMB32.7 billion 11.0% RMB2.11 per Share 24.1%

Profit attributable to owners

of the Company Weighted average return on net assets

RMB10.2 billion 23.5% 11.2% 2.0%Annual Report 2024 S.F. Holding Co. Ltd. 009

Key Accounting Data and Financial Indicators

009

Total Volume Unit: 1 billion parcels Total Revenue Unit: RMB Billion

+11.3%+10.1%

13.33

267.5284.4

11.97258.4

11.14

202220232024202220232024

The total volume includes the volume of express logistics business and

international express business (exclude oversea local express business).Excluding Fengwang business the volume of parcels increased by 15.3%

year-on-year.Revenue Breakdown by Segment

2.8%2.9%

24.8%

23.2% Time-definite Express

Economy Express

44.7% Freight

2023 Cold Chain and 43.0% 2024

2.8% Pharmaceutical Logistics 3.1%

4.0% Intra-city On-demand Delivery

Supply Chain and 3.4%

International Business

12.8% Other Non-logistics Business 13.2%

9.7%9.6%

Unit: RMB Billion 2023 2024

5.8%

122.21

115.46

17.5%

70.49

59.98

13.8%

8.8%

33.0837.64

25.0527.2511.8%4.9%22.4%

7.258.877.288.14

10.319.81

Time-definite Economy Express Freight Cold Chain and Intra-city Supply Chain and Other Non-logistics

Express Pharmaceutical Logistics On-demand Delivery International Business Business010 S.F. Holding Co. Ltd. Annual Report 2024

Key Accounting Data and Financial Indicators

Gross profit Unit: RMB Billion EBITDA Unit: RMB Billion

Gross profit Gross profit margin EBITDA EBITDA margin

13.7%

12.3%12.6%11.4%11.5%

10.8%

38.9

33.032.6

29.029.4

32.7

202220232024202220232024

Profit attributable to owners Quarterly profit attributable to

of the Company Unit: RMB Billion owners of the Company Unit: RMB Billion

Profit attributable to owners of the Company Profit attributable to owners of the Company of 2023

Profit attributable to owners of the Company of 2024

Profit margin attributable to owners of the Company Profit margin attributable to owners of the Company of 2024

4.2%3.9%3.3%

3.2%3.6%

2.32.9%%

10.17

2.90

8.232.812.462.55

6.231.912.091.721.97

2022 2023 2024 Q1 Q2 Q3 Q4

Assets Unit: RMB Billion Net cash flow Unit: RMB Billion

Total assets Equity attributable to owners Debt/asset ratio 2023 2024

of the Company

54.7%53.4%52.1%

32.2

216.8221.5213.826.6

-13.5-12.192.892.0-13.086.3

-28.0

2022 2023 2024 Net cash flow from Net cash flow from Net cash flow from

operating activities investing activities financing activitiesAnnual Report 2024 S.F. Holding Co. Ltd. 011

Key Accounting Data and Financial Indicators

011

Year ended December 31 Changes in this Year ended December 31

year over the

Income Statement Items 2024 2023 previous year 2022 2021

RMB’000 RMB’000 RMB’000 RMB’000

Revenue 284420059 258409403 10.07% 267490414 207186647

Gross profit 38895947 32633725 19.19% 33012406 25777544

EBITDA(1) (Non-IFRS measure) 32695124 29441939 11.05% 28987966 21780927

Profit for the year 10218845 7911609 29.16% 7056914 4382094

Profit attributable to owners of the Company 10170427 8234493 23.51% 6227058 4731979

Note:

(1) EBITDA = profit for the year + depreciation and amortization + finance costs net + income tax expense. For further details please refer to page

38 of the “Non-IFRS measures” section.

As of December 31 Changes in this As of December 31

year over the

Balance Sheet Items 2024 2023 previous year 2022 2021

RMB’000 RMB’000 RMB’000 RMB’000

Current assets 88686806 90990680 -2.53% 90673493 94112124

Non-current assets 125137407 130499975 -4.11% 126169214 115734564

Total assets 213824213 221490655 -3.46% 216842707 209846688

Current liabilities 72193368 73989641 -2.43% 77676909 76021629

Non-current liabilities 39295624 44217354 -11.13% 40879749 35963106

Total liabilities 111488992 118206995 -5.68% 118556658 111984735

Total equity 102335221 103283660 -0.92% 98286049 97861953

Equity attributable to owners of the Company 91993286 92790344 -0.86% 86263741 82889932

Year ended December 31 Changes in this Year ended December 31

year over the

Cash Flows Statement Items 2024 2023 previous year 2022 2021

RMB’000 RMB’000 RMB’000 RMB’000

Net cash generated from operating activities 32186373 26569819 21.14% 32702947 16078955

Net cash used in investing activities -12054744 -13505617 10.74% -12091458 -17131227

Net cash (used in)/generated from -27979113 -12994685 -115.31% -16016950 20498576

financing activities012 S.F. Holding Co. Ltd. Annual Report 2024

Key Accounting Data and Financial Indicators

Year ended December 31 Changes in this Year ended December 31

year over the

Key Financial Indicators 2024 2023 previous year 2022 2021

Gross profit margin 13.68% 12.63% Up by 1.05 12.34% 12.44%

percentage points

EBITDA margin 11.50% 11.39% Up by 0.11 10.84% 10.51%

percentage point

Profit margin attributable to owners 3.58% 3.19% Up by 0.39 2.33% 2.28%

of the Company percentage point

Basic earnings per share (RMB) 2.11 1.70 24.12% 1.28 1.03

Diluted earnings per share (RMB) 2.11 1.70 24.12% 1.28 1.03

Weighted average return on net assets 11.16% 9.19% Up by 1.97 7.41% 7.58%

percentage points

Asset-liability ratio 52.14% 53.37% Down by 1.23 54.67% 53.37%

percentage points

Differences in net profit and net assets in the financial reports disclosed in accordance with the International Accounting Standards and the

Chinese Accounting Standards are as follows:

Profit attributable to owners of Equity attributable to

the Company owners of the Company

Year ended December 31 As of December 31

2024202320242023

RMB’000 RMB’000 RMB’000 RMB’000

In accordance with the International Accounting

Standards 10170427 8234493 91993286 92790344

In accordance with the Chinese Accounting Standards 10170427 8234493 91993286 92790344

Items and amounts adjusted in accordance with

the International Accounting Standards:

In accordance with the International Accounting

Standards – – – –

Difference description No differenceAnnual Report 2024 S.F. Holding Co. Ltd. 013

Chairman’s Statement

Dear Shareholders profit margin was 3.6% representing a year-on-year increase of

40 basis points delivering solid results and demonstrating notable

In 2024 China’s economy made steady progress in a complex

developmental resilience.and ever-changing global environment demonstrating resilience.The Chinese express logistics industry supported by government

policies technological innovations and market demands continued Operational Revitalization: More

to grow at a stable pace with volume and revenue reaching new Authorization and Support to Business

historical highs. The express logistics industry in 2024 saw two

major innovations: First the application of new technologies and Frontlines

models such as AI algorithms autonomous vehicles and logistics

drones enhanced the industry’s level of intelligence and supported In 2024 the Company implemented the “Activating Operations”

its digital transformation; Second the demand for comprehensive strategy focusing on the core business principles oflogistics solutions has set higher standards with noticeable growth “customer-first competitive leadership market orientation andin lower-tier markets and the manufacturing sector. The global employee satisfaction” and initiating a series of organizational

expansion of Chinese brands and production capacities has become and mechanism reforms. The headquarter upgraded from a

a new driving force for cross-border logistics growth continuously traditional management model to a service-oriented operational

promoting the high-quality development of the industry. model emphasizing service support for business frontlines. The

Company increased authorization to regional business teams

In 2024 SF successfully listed on the Hong Kong Stock Exchange enhancing decision-making agility at the frontline and unleashing

becoming the first A+H company in the domestic logistics industry. market expansion dynamics for local branches and thousands

This marks another significant milestone in SF’s 32-year history. of service outlets. Gradually an incentive mechanism driven

This listing serves as a new starting point for SF to build an by business results multiple motivators and shared outcomes

international capital platform continuously deepen its globalization was implemented upgrading the Group into a more cohesive

strategy and develop an elite team with shared values vision and community of shared interests igniting the entrepreneurship within

mission. SF is committed to becoming a culturally inclusive and and fostering symbiotic development between the enterprise and

diverse international enterprise striving to be a globally leading employees.provider of intelligent logistics solutions trusted and respected by

customers employees and partners.Accelerating Penetration Into the Supply

In the first year of this pivotal milestone the Company embraced Chain of Customers Across Major

the theme “United for Shared Goals Pioneer with Steadfast Drive”

by fully invigorating operational dynamism and keenly capturing Industries

new opportunities in both domestic and international markets

and achieved healthy growth in overall businesses. In 2024 the Market competition and business innovation have increasingly driven

Group achieved revenue of RMB284.4 billion representing a diverse customer demands. Corporate clients do not only focus on

year-on-year increase of 10.1% among which the express logistics the cost-effectiveness of logistics services but also prioritize the

business achieved revenue of RMB205.8 billion representing a optimal layout of diversified business models across the entire

year-on-year increase of 7.7%; the supply chain and international supply chain as well as the efficient implementation of digitalization

business achieved revenue of RMB70.5 billion representing a intelligence and eco-friendliness. Perceiving the everlasting market

year-on-year increase of 17.5% effectively securing the Company’s changes and leveraging SF’s unique full spectrum of logistics

second growing curve. Alongside business expansion continuous services in 2024 the Company has hastened the strategic shift

improvements in backbone logistics network efficiency and from selling “standardized products” to selling “industry solutions”.operational model reforms have driven cost reductions and efficiency By building comprehensive logistics solutions and standardized

enhancements leading to sustained profitability growth. The profit portfolio service that fit various industries and scenarios the

attributable to owners of the Company in 2024 was RMB10.2 Company rapidly expands supply chains solutions across all

billion representing a year-on-year increase of 23.5% and the sectors enhancing its market share in logistics. Simultaneously

the Company focuses on building long-term strategic capabilities014 S.F. Holding Co. Ltd. Annual Report 2024

Chairman’s Statement

in the industry constructing long-term competitive edge in various implemented fully automatic operations. In terms of transportation

sectors through technology empowerment operational innovation the Company continuously refined transfer modes and route

and external collaborations. planning to maximize delivery consolidation and streamline routes

to achieve network streamline and reduced costs. In terms of

In 2024 the Company achieved business growth by penetrating

last-mile delivery the Company strengthened the operational model

customer’s upstream and downstream supply chain scenarios

transformation to reduce processes at the outlets and improve

across multiple industries. Logistics revenue in the e-commerce

the couriers’ collection and delivery efficiency for better service.high-tech automotive and industrial manufacturing sectors all grew

Additionally by fully utilizing idle capacity and flexibly integrating

by over 20% year-on-year. Additionally the Company launched

external resources the Company expanded into more industrial

dozens of standardized product packages tailored to eight major

or niche markets with competitive services and pricing leveraging

industries facilitating rapid market replication and enhancing

network scale economy to foster a virtuous cycle of volume growth

business expansion efficiency.and cost optimization.Expanding Global Reach: Driving Business Technology-Driven Smart Supply Chain

Growth Through Globalization Innovation

The globalization of Chinese enterprises including product exports

The Company has integrated cutting-edge technology with

production capacity expansion and brand globalization has

industry-specific applications to enhance logistics network efficiency

fueled robust demand for cross-border logistics. Furthermore The

and digital customer services. In 2024 the Company won multiple

Asia-Pacific region continued to lead in logistics growth globally.international awards and national recognitions in the field ofIn response to this trend the Company has reinforced its “Thelogistics technology and has been selected as a finalist for theOne in Asia” strategy and focused on improving the self-operated

2025 Franz Edelman Award the highest honor in the world for

networks in Southeast Asia and Asian countries including Japan

operations research and management science becoming the only

and Korea based on the integration of KLN’s overseas capabilities

representative from China into this year’s final round.and resources strengthening its international express delivery

and supply chain service capabilities. Additionally the Company The Company leveraged cutting-edge large-scale modeling

continues to densify its international air network improve customs technology to build the SF Logistics Decision-Making Large Model

clearance capabilities and construct overseas warehouses flexibly and SF Large Language Model. SF Logistics Decision-Making

expanding into the cross-border logistics markets toward Europe Large Model can intelligently analyze and optimize volume demand

and America. With a full range of international express supply forecasting route planning and operational decisions while

chain cross-border e-commerce logistics and freight forwarding SF Large Language Model has been widely applied in over 20

services SF is dedicated to becoming the go-to logistics partner scenarios including company operations international custom

for Chinese companies going global. clearance affairs and customer services contributing to improved

employee efficiency and customer service experience. Meanwhile

In 2024 the Company customized integrated cross-border

through the implementation of unmanned technologies including

end-to-end logistics solutions with both cost-efficiency and

AGV unmanned vehicles intelligent driving assistance systems and

high-quality services for customers and achieved the 0-to-1 –

automated warehouses the Company comprehensively improved

to-N breakthroughs in international supply chain projects across

its operation efficiency. Moreover the Company widely applied RPA

countries industries and business scenarios. In 2024 the Company

(Robotic Process Automation technology) during the collection

won bids for an aggregate of 100 overseas supply chain projects

transit and delivery process to assist in automatically generating

and over 45% of Fortune China 500 companies are using SF’s

various data reports and analysis monitoring various processes and

international logistics services.providing automatic warning comprehensively optimizing business

operations and improving the network efficiency.Network Optimization: Structural Cost Meanwhile the Company adopted leading logistics technologies

Reduction and Efficiency Enhancements to empower customers across the industries to build the best

practices of digital logistics and supply chains. The logistics

The Company remains committed to lean operations implementing technologies have been widely applied in various industries such

operational model transformations and optimizing network layout to as high-end manufacturing cosmetics automobile accessories

drive structural cost reductions. Integrated resource management home appliances and consumer goods and the Company has

and cost efficiencies were achieved across the entire logistics chain successfully accumulated nearly a hundred cases of industry-leading

enhancing product competitiveness. customers empowering over 4000 industry customers in dozens

In 2024 the Company’s average operating cost per parcel of fields. For small and medium-sized customers the Company

continued to decline. In terms of sorting large-scale multifunctional penetrated into their logistics services through light-version SaaS

sorting and warehousing centers were built to reduce the number products to enhance the added value of the Company’s express

of sorting centers and improve capacity utilization. Meanwhile the and logistics services contributing to the business expansion and

Company adhered to technological innovation created the first customer loyalty.unmanned container sorting center in the industry and partiallyAnnual Report 2024 S.F. Holding Co. Ltd. 015

Chairman’s Statement

Cultivating a Green Sustainable and approximately RMB1.9 billion representing a dividend payout ratio

of approximately 40% and a special dividend of approximately

Ethical Logistics Ecosystem RMB4.8 billion distributed before its listing on the Hong Kong Stock

Exchange demonstrating SF’s commitment to its shareholders in

The Company has always upheld sustainable and healthy

return for their long-standing support. In addition the Board of

development and is committed to fulfilling social responsibilities

Directors proposed to distribute a final dividend for 2024 of RMB4.4

as well as integrating corporate value with social value while

per 10 shares (tax inclusive).delivering financial results. The Company always implements its

customer-centric service philosophy and provides customers with Looking ahead in 2025 SF will continue to focus on the logistics

premium services for their value creation. Simultaneously the industry starting from the original aspiration of serving the real

Company continues to promote the construction of a green economy empower the operation upgrade across industries and

logistics system and contribute to the establishment of a green support the development of new productive boosters by providing

and low-carbon supply chain ecosystem. Additionally the Company digital logistics solutions to achieve increased revenue and cost

continuously improves employee benefits and care remains true control with an improved supply chain efficiency.to its original aspiration and actively participates in public welfare

Last but not least I would like to convey my sincere gratitude

to contribute to the society. The Company’s ESG practices

to each of our customers for their trust each of our employees

have achieved constant recognition in China and overseas. The

for their diligent work and each of our shareholders for their

Company’s MSCI ESG rating is BBB being the first in China’s

support. We still have a long journey to conquer ahead and we

express delivery logistics industry and it is rated as low risk by

must be acutely aware that the market and customer demands

the Sustainalytics ESG rating which is the best rating in the

are changing. The only way to achieve sustainable long-term and

global express delivery logistics industry. The Company has been

healthy development is to be customer-centered honesty-based

honorably selected into the list of ESG influence in China issued by

and love-oriented. We shall work together closely to embrace the

Fortune for three consecutive years (2022-2024) making it the only

challenges and create excellence and a brighter future.selected express delivery logistics company in China. The Company

has also continued to innovate in green solutions providing green

and low-carbon solutions for over 60 customers in 2024 and

achieving the first commercial flight of sustainable aviation fuel for

full-cargo aircraft in China. In the future the Company will depend WANG Wei

on its own resource advantages to provide more customers with

end-to-end green solutions. Chairman and General Manager

The Company also has a strong emphasis on shareholder return. March 28 2025In March 2024 the Company issued the “Shareholder ReturnPlan for the Following Five Years (2024-2028)” specifying a

steady increase in the cash dividend payout ratio based on that in

2023. The Company has fully paid an interim dividend for 2024 of016 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Industry Review in 2024 the previous year. The revenue of China’s express delivery business

in 2024 was RMB1.4 trillion representing an increase of 13.8%

over the previous year. Moreover consumers’ focus on value-for-

Domestic Market money will motivate companies and merchants to seek for efficiency

enhancement and cost reduction for the supply chain. The reduced

China’s economy has achieved steady development with an logistics cost and improved timeliness supported the consumer

accelerated transition from old to new dynamics. According to market and the real economy. In the future logistics companies with

the data from National Bureau of Statistics China’s GDP reached capabilities in digital integration and global supply chain optimization

RMB134.9 trillion in 2024 representing an increase of 5.0% over are poised for significant growth in emerging industries.the previous year and continuing to be a significant engine for

global economic growth. Large enterprises and strategic emerging

industries significantly boosted economic growth with major Overseas Market

companies’ value-added industrial output growing by 5.8% driven Amid global economic challenges policy stimuli and regional

by sectors such as intelligent equipment and new energy. High-tech cooperation drive resilient growth. The international market

manufacturing was particularly strong increasing by 8.9% as the environment remains complex and dynamic with geopolitical

impact of strategic emerging industries on the economy continued conflicts and intertwined uncertainties in international trade

to expand. The total retail sales of consumer goods were RMB48.8 creating multiple constraints on economic recovery. However

trillion among which the online retail sales of physical goods global inflation rates have moderated and major economies have

reached RMB13.1 trillion representing a year-on-year increase of shifted towards interest rate cuts in an effort to stimulate economic

6.5% showing a stabilization in e-commerce penetration. At the recovery. According to the International Monetary Fund (IMF) the

policy level the state focused on propelling domestic demand and global economic growth forecast for 2024 was 3.2%. Emerging

industrial upgradation. The Action Plan for Promoting Large-Scale markets and developing economies in Asia sustained robust

Equipment Renewals and Consumer Goods Trade-ins issued growing headwinds with a forecasted economic growth rate of

by the State Council proposed equipment renewal consumer 5.2% continuously outpacing the global economy. Global trade

goods trade-in recycling and reuse standard improvement demonstrates resilience under pressure. According to the data

and other critical actions aiming to stimulate economic vitality from the United Nations Conference on Trade and Development

through market mechanisms and promote both quantitative and (UNCTAD) trade in goods has gradually rebounded driven by

qualitative improvements in economic activities along with structural further regional cooperation with strong performance in information

optimization. and communications technology sector and a mild growth in

In 2024 China’s logistics industry demonstrated enhanced automobile trade.quality and efficiency supported by advancements in intelligent China’s foreign trade realized paralleled growth in overall

technologies and strategic depth contributing to industrial volume incremental volume and quality. According to the data

upgrading. According to the data from China Federation of from General Administration of Customs of the PRC the total value

Logistics & Purchasing the total cost of social logistics in 2024 of China’s imports and exports in 2024 amounted to RMB43.9

was approximately RMB19.0 trillion representing an increase of trillion increased by 5.0% over the previous year. Among them

4.1% over the previous year and accounting for 14.1% of the GDP the total value of exports was RMB25.5 trillion increased by 7.1%

which decreased by 0.3 percentage point over the previous year. In over the previous year. In terms of product categories the export

particular the express industry continuously adhered to the strategy value of mechanical and electrical products increased by 8.7%

of “go to the countryside go to factories and go global” to improve accounting for 59.4% of the total value of exports with exports of

people’s life quality promote the industrial supply chain upgrade high-end equipment increasing by over 40%. High-tech products

and pave the way for the international trade. According to the data gained favorable growth with new high-tech products increasingly

from State Post Bureau express deliveries volume in China in 2024 venturing overseas. The exports of self-owned brands in China

exceeded 175.08 billion representing an increase of 21.5% over hit a record high booming cross-border e-commerce and otherAnnual Report 2024 S.F. Holding Co. Ltd. 017

Management Discussion and Analysis

017

emerging business. In terms of business partners China’s exports Positioning and Competitive Strengths of the

to over 160 countries and regions increased including an increase

of 9.6% in exports to countries involved in the Belt and Road Company in the Logistics Industry

Initiative and an increase of 13.4% in exports to ASEAN countries. As the largest integrated logistics service provider in China and

The international logistics market continued to rebound pillared Asia and the fourth largest player globally the Company adheres

by increased trade and cross-border e-commerce activities. to long-term sustainable and healthy development as well as

According to the data from International Air Transport Association foresight strategy. Amidst the ever-changing market the Company

(IATA) the global overall demand for air freight in 2024 increased is capable of promptly seizing development opportunities pursuing

by approximately 11.3% over the previous year outpacing the continuous innovation and reform reinforcing service capabilities

growth of air transport capacity over the same period thereby and navigating through business cycles together with its clients.driving continuous increase in the price of air freight throughout the Diversified Logistics Network Connecting Asia and the World.year. In particular the annual demand for air freight in Asia-Pacific Through organic growth and strategic mergers & acquisitions the

experienced the fastest increase of 14.5% among all regions. Company has built a one-stop integrated logistics service landscape

Additionally the price for sea freight from Asia-Pacific to Europe and with a more complete product portfolio a more comprehensive

to the Americas substantially increased where the sea freight price network and more diversified service scenarios covering the

for China exports hit its peak in the middle of 2024 and remained end-to-end supply chain from production to sales and from

stable till the end of the year. Furthermore along with the in-depth domestic to abroad. The Company’s efficient and reliable logistics

trade cooperation between China and ASEAN RCEP member infrastructure network covered all cities in China and a number of

countries and countries involved in the Belt and Road Initiative the countries and regions around the world and it owns the largest airindustrial chain and supply chain were deeply interconnected with cargo fleet in Asia and the Ezhou cargo hub enabling “reachinga smoother customs clearance of goods spurring the growth of nationwide overnight and connecting the world the third day”.demand for international logistics and supply chain. Meanwhile the Company leverages extensive maritime ground

The globalization of Chinese enterprises in production capacity and rail transportation resources and routes to provide clients with

and brand expansion accelerating the globalization of China’s multi-modal solutions for domestic and cross-border transportation

logistics sector. Driven by the restructuring of global industrial of LTL and bulk cargo. The acquisition and integration of KLN have

chains and China’s industrial upgrading Chinese enterprises are further strengthened the Company’s local logistics capabilities in

accelerating in globalization and evolving into a new dual-track Southeast Asia and its international freight forwarding capacity of

model that combines “production capacity globalization” and “brand connecting Asia with the world. Amidst the complex and volatileglobalization”. In production capacity globalization industries such trade environment and the accelerated restructuring of the global

as 3C electronics automotive manufacturing garment OEM lithium industry chain the Company is capable of adapting swiftly and

batteries and photovoltaics have emerged as the main drivers. flexibly to market shifts with integrated logistics expertise and the

Enterprises have been actively setting up overseas production solid network coverage overseas especially in Asia and reshaping

facilities particularly as uncertainties in international trade and the supply chain structure in China and overseas together with

tariff policies intensify. This trend is further accelerating industrial its customers across industries to withstand market risks for a

chain restructuring and relocation creating urgent demand among successful international expansion.Chinese enterprises to establish comprehensive and efficient Leading Position in Multiple Logistics Sub-Segments in China

overseas supply chain systems. Regarding brand globalization and Asia. Leveraging the time-definite and high-density network

sectors including coffee/tea beverages food & catering and with the “1-to-n” expansion strategy the Company has quickly

beauty/personal care have seen rapid growth. These industries transformed from China’s leading time-definite express service

are accelerating the establishment of overseas direct-operated provider into a leading global integrated logistics service provider.stores and sales channels to actively expand in global consumer The Company enjoys an unrivaled leading position in China in

markets. This dual-track expansion is fundamentally supported by terms of time-definite express services and is also a market leader

Chinese logistics providers’ competitive advantages in efficient in China in terms of logistics sub-segments including LTL freight

supply chain management and cost-effectiveness. Through digital cold chain logistics third-party intra-city on-demand delivery and

system integration flexible supply chain network deployment non-state-owned independent third-party supply chain solutions.and large-scale operational capabilities these enterprises are In particular SF Freight ranked first in terms of revenue from LTL

successfully translating domestic supply chain expertise into transportation for five consecutive years (2020-2024) in the List of

international market competitiveness. The continuous enhancement LTL Transport Enterprises in China* (中國零擔企業排行榜) issued

of China’s industrial chain capabilities and brand competitiveness by Wetuc Think Tank* (運聯智庫) and SF Cold Chain ranked firstcoupled with the global expansion of cross-border e-commerce for six consecutive years (2019-2024) in the “China Top 100 Coldmarketplace and independent e-commerce websites has created Chain Logistics List”* (中國冷鏈物流百強企業榜) issued by the

exceptionally favorable conditions and opportunities for Chinese Cold Chain Logistics Committee of China Federation of Logistics

comprehensive logistics service providers to expand globally & Purchasing. According to Frost & Sullivan the Company was

alongside their clients. also Asia’s largest provider of overall express delivery LTL freight

delivery and third-party intra-city on-demand delivery and had

the largest international operation among Asia-based integrated

logistics service providers.018 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Unique Business Model – Directly-Operated Integrated and layout high-quality service and strong technology capabilities will

Independent Third-Party. Direct operation ensures highly unified contribute to the Company’s excelling and everlasting success

top-down strategic alignment and rapid business execution for from the competition.swift adaptation to market changes and successful incubation of

more new business formats within a short period of time with the

strong operational control backing the Company’s unrivaled leading Business Development of the Company

position of delivery timeliness and overall customer satisfaction

over the years. Second the Company offers comprehensive Accelerating penetration into the supply

logistics solutions standardized or customized to address a full

range of customers’ logistics demand capture greater share in chains of customers across major industries

the customers’ supply chain service across industries for better In 2024 the Company formulated business strategies aimed

customer stickiness and business growth. Third the Company is at accelerating transformation to industry logistics solutions

independent of e-commerce platforms allowing for its impartial shifting from traditional selling standardized products (such as

services to customers with over 2.3 million customers with active standardized express or freight delivery services) to selling industry

credit accounts and over 730 million retail customers as of the logistics solutions. It is committed to providing industry-specific

end of 2024 and is capable of grasping emerging opportunities and customized integrated logistics solutions and standardized

more quickly and building long-term sustainable relationships with portfolio service to industry leaders mid-market enterprises and

customers under the evolving market of new retail platforms and SMEs across sectors. Through in-depth analysis of industrial

businesses. trends and identification of logistics scenario opportunities the

Advanced Technology Empowering a Highly Efficient and Company enhanced capabilities in developing core scenario-specific

Intelligent Supply Chain. Amid the trend of “express-style logistics” logistics solutions and standardized portfolio service. By expanding

and growing customer demand for intelligent high-efficiency presence across clients’ upstream and downstream supply chain

supply chains technology has become an indispensable driver in ecosystems it achieved scalable business growth. Due to deepened

building digital automated and smart supply chain systems. The penetration into customers’ supply chains in 2024 the Company’s

Company remains committed to innovative R&D and technological logistics revenue saw a year-on-year increase of 20% or above in

advancement continuously spearheading internal and external e-commerce and circulation telecommunication and high-tech

digital-intelligent supply chain transformation. Through its automobiles and industrial manufacturing sectors.self-developed SF Smart Brain the Company ensures efficient E-commerce and Circulation: The Company actively expanded its

network operations despite its extensive logistics network diverse cooperation with emerging e-commerce platforms in China across

service ecosystem and global business reach. Furthermore various business scenarios and models. By enhancing international

leveraging its cutting-edge technological solutions the Company air freight express and warehousing capabilities the Company

collaborates deeply with cross-industry clients to empower holistic penetrated into more overseas business scenarios of major cross-

supply chain decision-making operational efficiency gains and border e-commerce platforms and secured more customers with

cost reduction. Notably the Company has been named a finalist self-built overseas e-commerce websites; furthermore leveraging

for the 2025 Franz Edelman Award – the highest global accolade its robust logistics network and professional cold chain capabilities

in operations research and management science – making it the the Company swiftly expanded into the thriving online shops on

sole Chinese representative in this year’s finals. platforms and provided comprehensive O2O services to large-scalePremium Services Forging Unparalleled Brand Value. “Let me supermarkets continuously solidifying its market share in theSF this to you” has become synonymous with “Let me express mail e-commerce and circulation industry.this to you.” In China our household brand name has become a Telecommunication and High-tech: The Company maintained

commonly used verb for time-definite express. SF brand means a leading position in the distribution supply chain for consumer

premium services. Many business customers actively advertise electronics communication equipment telecom operators and other

their use of SF delivery for consumers’ impression and trust on segments. Additionally through B2B bulk cargo transportation and

their product quality. As published by the State Post Bureau the cross-border logistics services the Company extended services to

Company has been ranked first for 15 consecutive years (2009 the production supply chain. In particular the Company developed

to 2023) and the first three quarters of 2024 (annual results not end-to-end service capabilities in the import of high-end equipment

yet released) for overall customer satisfaction. Attributable to the and partnered with a number of leading high-end equipment

peer-leading track record and reputation in providing premium manufacturers in the world for the successful completion of multiple

services the Company has accumulated the most extensive import projects covering the entire process of overseas pickup

customer base across varied industry sub-segments with high export customs clearance import customs clearance and delivery.customer loyalty and stickiness and served as a highly reliable

logistics partner for customers. Automobiles: The Company explored new supply chain scenarios

strengthened cooperation with benchmark brands by leveraging

Overall both China and Asia have an enormous logistics market. full-scenario service capabilities and boosted the rapid growth of

Though securing a leading position across industry verticals the upstream and downstream logistics businesses. In the automobile

Company still has tremendous promise for future integration and aftermarket the Company’s integrated warehousing and distribution

expansion under the huge and fragmented potential logistics service for automobile parts has been successfully promoted

market. The long-term strategic vision prospective businessAnnual Report 2024 S.F. Holding Co. Ltd. 019

Management Discussion and Analysis

019

to a number of automobile brands. Additionally the Company sorting centers. The number of cities with direct pick-up or delivery

cooperated with 70% of the Top 20 passenger vehicles brands and services between customers and airports has increased to 164

established full-scenario collaboration with 11 of these customers and the next-day timeliness completion rate for large item air

in the inbound in-plant finished product and after-sales scenarios. freight increased by 7.3 percentage points over the previous year.In terms of business development the Company dedicated to

Industrial Manufacturing: The Company built a cost-effective bulk

scenario-customized solutions offering value-added services such

cargo transportation network for the manufacturing industry and

as dedicated personnel and vehicles as well as nighttime pickup

integrated the internal supply chain service capabilities achieving

and delivery and efficiently addressed urgent demands within 24

breakthroughs in segments including industrial raw materials

hours from response to delivery to production line. The Company

industrial equipment light manufacturing energy and chemicals.also customized air freight solutions for oversized and overweight

Penetrating further into the cooperation with key customer groups

goods or goods with magnetic or electric properties. In 2024 the

across segments the Company gained rapid growth in its business

volume of large item air freight business increased by over 20%.and successfully seized more shares of logistics services.Strengthening the Efficient Fulfilment of Intra-city Express

Meanwhile the Company designed and optimized dozens of

Delivery: The Company’s half-day express delivery service

standardized portfolio service solutions for eight major industries

with an average fulfillment time of 4-6 hours for intra-city and

to swiftly expand logistics services for customers across industries.cross-city within economic regions has been expanded to 291

The solutions in high-end equipment spare parts warehousing andcities. Meanwhile the Company has implemented the “upper-layerdistribution cross-border transportation and allocation of consumerwarehouse lower-layer sorting” pattern in 104 locations seamlessly

electronics raw materials beauty and cosmetic warehousing and

integrating warehouse operations with sorting schedules. Leveraging

distribution furniture delivery and assembly and new energy

frequent sorting and transportation schedules to complete rapid

battery materials logistics and other scenarios have been rapidly

distribution the Company achieved an intra-city express fulfillment

promoted driving rapid revenue growth and significantly improved

time of 4-6 hours as well as the same-day or next-morning delivery

delivery efficiency. The average time from cooperation to project

within provinces and for economic regions enabling efficient order

implementation has been reduced by 20 days thereby improving

fulfillment for a wide range of businesses. Additionally leveraging

the Company’s sales efficiency and conversion rate of industry

its technological and operational capabilities and integrating

customer business opportunities.external resources the Company has steadily penetrated the

urban freight market achieving breakthroughs in urban store

Time-definite Express distribution scenarios such as wholesale snacks tea beverages

and supermarkets and established an efficient urban distribution

In 2024 the Company’s time-definite express achieved

network to enlarge the scale of intra-city logistics services.tax-exclusive revenue of RMB122.21 billion representing a

year-on-year increase of 5.8% with the year-on-year increase Securing Market Share in E-commerce Return Parcels: By

of 11.8% in business volume. The business mix of time-definite leveraging its efficient door-to-door pickup and end-to-end delivery

parcel steadily expanded from business documents to consumption the Company continuously strengthened its partnership with major

and industrial manufacturing with consumption and industrial e-commerce platforms for return parcel services. Meanwhile the

manufacturing-related delivery became major growth driver for Company featured a dedicated “Online Shopping Returns” section

time-definite express. on SF App and mini-program to address customers’ self-service

return needs. The Company’s e-commerce return parcel services

Continuous Improvement in Competitive Edges: Through

experienced rapid growth and maintained a leading market share.leveraging the competitive edges of the Ezhou cargo hub and

all-cargo fleet as well as optimizing the integration between air Strengthening Competitive Edges with the Ezhou cargo hub:

and ground networks the delivery time of SF speedy express Leveraging Ezhou cargo hub’s nationwide and global connectivity

has been continuously shortened which strengthened its core the Company offered integrated warehousing and transit services

competitiveness. Meanwhile the Company focused on critical urban to support customers in establishing efficient supply chains withroutes the optimization of transportation pattern and the reduction its utmost efficiency of “delivery in the evening with arrival in thein the number of transits continuously upgrading the next morning next morning”. By the end of 2024 the Company has operated

delivery of SF standard express. Additionally the Company utilized 55 domestic routes and 15 international routes through the Ezhou

the remaining production capacity and strategically expanded its cargo hub. Many customers in various industries have already

presence in low-tier cities to increase network density in lower-tier established their presence in relevant warehousing facilities

markets in order to expand the business scale. encompassing high-end industries including 3C high-tech

FMCG pharmaceuticals automobiles and engineering machinery.Accelerated Expansion of Air Freight Market: The Company’s

Additionally the Company actively solicited investment around the

time-definite service offerings expanded from small-parcel express

Ezhou cargo hub with successful investment projects worth of

to freight logistics providing customers with large item air freight

billions enriching the hub’s supply chain ecosystem and expecting

services between provinces in as fast as seven hours. In terms

to generate significant growth in air cargo services in the future.of capabilities the Company leveraged abundant dedicated and

chartered aircraft resources and established 24 exclusive intelligent020 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Economy Express Freight

In 2024 the Company’s economy express business achieved In 2024 the Company’s freight business achieved a

tax-exclusive revenue of RMB27.25 billion representing a tax-exclusive revenue of RMB37.64 billion representing a

year-on-year increase of 8.8%. Committed to high-quality year-on-year increase of 13.8% with cargo volume increasing

business development the Company completed the sale of by over 20% compared to the previous year.Fengwang Express which operated under the franchise model inUnder China’s industrial upgrading initiatives and the “Large-ScaleJune 2023. Excluding Fengwang Express the economy expressEquipment Renewals and Trade-ins of Consumer Goods”

revenue in 2024 increased by 11.8% year-on-year while the

policy industries including communication equipment industrial

business volume increased by 17.5% compared to the previous

manufacturing new energy vehicles/parts home appliances and

year.furniture have experienced growing demand alongside rising

Expanding the Scale of Economy Express Business: The consumer spending. Simultaneously customers have raised higher

Company maintained robust growth in its economy express expectations for freight services emphasizing fast and precise

services which are pivotal in the e-commerce market for their delivery timelines stable and reliable service quality and strict cost

timely stable and high-quality door-to-door services. Leveraging control. Adhering to its customer-centric business philosophy SF

its improvement of digital and intelligent capabilities the precise Freight provide high-quality products and services achieving a peak

matching of resources and the transformation of the operation daily LTL volume of over 69000 tons in its direct operation network

mode the Company adopted appropriate business strategies for and over 32000 tons in its franchise network maintaining a leading

goods of different weight ranges and further expanded the market position in terms of business scale in the industry.for economy express delivery.Creating Competitive Edges in the Mid- to High-end Ground

Expanding Warehousing and Distribution Integration Large Parcel Delivery Market: The Company has established a

Services to More Industry Scenarios: Leveraging its nationwide tiered timeliness guarantee system to ensure fast and accurate

warehouse network standardized integrated warehousing and delivery speeding up the timeliness for over 400 core routes

distribution products and solutions professional operational team enhanced last-mile collection and delivery capabilities and adjusted

and end-to-end system deployment capabilities the Company the standard weight limit for single parcel to one ton. Furthermore

provides customers with cost-effective integrated warehousing and the Company developed differentiated packaging and delivery

distribution services. Compared to its competitors the Company’s capabilities accumulating professional logistics solutions across

self-developed warehousing system and integrated services offer various industries such as home appliances and automobiles.greater flexibility. In B2B2C scenarios across various production Meanwhile the Company focused on core business production

and consumption industries as well as in the optimal deployment areas by optimizing operations through dedicated direct routes

of online and offline inventory the Company has accumulated a customer self-delivery to sorting centers network integration with

wealth of benchmark cases and mature experience. This enables SX Freight and integrated loading/shipping mode to enhance

the Company to offer customized solutions tailored to the specific efficiency reduce costs and secure the Company’s market share.characteristics and diverse needs of different industries. In 2024

Building a High-quality LTL Logistics Network Tailored for

the revenue from integrated warehousing and distribution services

Industrial Manufacturing: The Company has been continuously

for the SKA KA and SME customers witnessed a year-on-year

optimizing its operational model and resource allocation to establish

increase of over 20%.a high-quality LTL logistics network that better aligns with the

Leveraging its unique competitive edge as an independent manufacturing sector’s demand – LTL shipment minimal transfers

third-party the Company deepened cooperation with e-commerce and cost control – while rapidly expanding into the industrial freight

platforms and successfully undertook several integrated market. By optimizing its network structure and establishing over

warehousing and distribution projects for online supermarkets 300 direct dispatch routes the Company significantly enhanced

in 2024. By adopting consolidated transportation models and delivery timeliness while reducing operational costs. A dedicated

supporting in-warehouse operations the Company expanded sales team of several hundred professionals was deployed to

delivery to remote areas and cross-border first-mile collection provide personalized “concierge-style” services strengthening

scenarios. Moreover by closely tracking consumer trends the the Company’s differentiated service advantages. Furthermore

Company established innovative quality inspection centers within its the Company has integrated diversified resources strengthened

warehouses for high-value items in cooperation with e-commerce collaboration with external specialized transport providers

platforms and merchants. Products undergo quality inspections coordinated small and large parcel couriers and added over 3400

directly in the warehouse before delivery ensuring product quality large vehicles to enhance its lean logistics capabilities. In 2024

and improving fulfillment efficiency. The Company also achieved SF Freight deepened its presence in over 20000 industrial parks

significant breakthroughs in integrated warehousing and distribution covering more than 300 cities. The cargo volume for industrial large

services across multiple sectors including in-plant logistics for the item weighing above 100kg increased by more than 30% over the

industrial manufacturing inventory replenishment for wholesale previous year.snack chains and B2C fulfillment for traditional Chinese medicine

and tea beverages. The Company continued to seize new market

opportunities for additional business growth.Annual Report 2024 S.F. Holding Co. Ltd. 021

Management Discussion and Analysis

021

Accelerating Expansion into Lower-tier Markets through Through close collaboration with local governments industry

Franchise Networks: In 2024 the SX Freight franchise network associations and leading brands the Company launched over 50

accelerated its expansion into lower-tier markets. The total number new regional agricultural brands in 2024. It also organized brand

of network outlets exceeded 20000 with a coverage rate of promotion events such as harvest festivals picking festivals

85.3% for township deliveries. Its market share remained firmly fishing season opening ceremonies and trade fairs implementing

among the top three in the franchised freight delivery market. SX various initiatives to enhance the reach and visibility of agriculturalFreight also introduced products such as light freight and bulk brands. Guided by the principle of “Quality-Driven Agriculture andfreight offering a cost-effective network to meet the demands Brand Empowerment” the Company focuses on three strategic

of lower-tier market customers. In terms of core networks SX dimensions – value enhancement branding and standardization –Freight continuously optimized operations by reducing distribution to facilitate the shift of China’s agriculture from “volume-drivennodes and streamlining routes cutting the average delivery time expansion” to “quality-oriented development”. Additionally the

by 6.5 hours. These measures combined with route structure Company has continuously improved packaging solutions by

optimization and enhanced capacity procurement have driven a incorporating features such as extended freshness improved

reduction in parcels’ per-kilogram operating costs. By investing recognizability cultural attributes and environmentally friendly

in technological tools such as sorting equipment and unmanned materials. More than 40 customized packaging designs have been

forklifts SX Freight enhanced operational efficiency and customer developed for dozens of fresh produce categories enhancing the

satisfaction. The synergies between SX Freight franchise network competitiveness of regional specialty agricultural products. The

and SF Freight direct operation network steadily expanded the Company has also leveraged multiple resources to explore new

cargo volume continuously improved operational efficiency and e-commerce models such as livestream-assisted agricultural sales

delivered high-quality services to achieve a win-win outcome for providing one-stop marketing solutions for local specialty products

its franchisees and customers. and contributing to the sustainable growth of the agricultural

industry.Cold Chain and Pharmaceutical Logistics

Food Cold Chain Logistics Services

In 2024 the Company’s cold chain and pharmaceutical logistics

business achieved a tax-exclusive revenue of RMB9.81 billion In 2024 the Company prioritized five core cold chain logistics

representing a year-on-year decrease of 4.9%. This decrease scenarios – integrated warehousing and distribution large item

was mainly due to the climatic factors which caused a significant B2C delivery store delivery and cross-border cold chain. By

reduction in certain seasonal fresh agricultural products thereby optimizing operational processes and developing innovative

hampering the growth of fresh produce logistics services. tools the Company enhanced its service capabilities and provide

high-quality end-to-end cold chain logistics services for customers

In 2024 China’s overall cold chain logistics market experienced across the entire supply chain from production to consumption.stable growth. The e-commerce of fresh and seasonal food

remained active while catering chain brands accelerated their Leveraging its full-scenario capabilities in warehousing LTL B2B

expansion into lower-tier cities and counties driving rising and B2C delivery the Company penetrated more cold chain

demand for cost-effective cold chain services. Additionally the segments and scenarios for existing customers increasing its

expansion of large supermarket chains and the rising demand market share in the cold chain logistics services. The Company

for central warehouse and city warehouse distribution created leverages its self-operated cold storage facilities and outsourced

new opportunities for LTL cold chain logistics. In response to warehouse resources utilizing warehousing services as the

these industry developments and market trends the Company cornerstone to expand customer distribution operations and scale

optimized its cold chain network with a more cost-efficient model up integrated warehousing-delivery business. Additionally by

continuously providing customers with intelligent and digitalized developing new temperature-controlled containers and leveraging

cold chain solutions. its express delivery network the Company rapidly expanded its

presence in China in the cold chain freight logistics services

Fresh and Seasonal Food Logistics Services launching pickup services in 85 cities and delivery services in 131

cities in 2024 to obtain new growth potential. Furthermore the

The Company has played a crucial role in enabling fresh agricultural Company incubated urban cold chain delivery networks in selected

products to reach consumers directly from their place of origin cities to provide centralized warehousing and shared distribution

with services covering over 2800 county-level cities and more services for catering stores upgraded urban cold chain distribution

than 5500 categories of fresh agricultural products nationwide. from local to regional networks and focused on food cross-border

It is projected to increase farmers’ income by over RMB100 air freight Southeast Asian cold chain ground transportation and

billion thereby driving local agricultural modernization and quality fresh and seasonal food imports via the Ezhou cargo hub achieving

upgrading while providing robust support for enhancing rural more breakthroughs in cross-border cold chain logistics services.prosperity.022 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Pharmaceutical Logistics Services the on-demand delivery needs across diversified business verticals.In 2024 the scale of annual active merchants of SF Intra-city

The rapid evolution of China’s pharmaceutical regulations has had a reached 650000 representing a year-on-year increase of 39%.profound impact on the pharmaceutical logistics industry requiring For consumer services SF Intra-city is committed to providing

logistics providers to accelerate transformation to meet both industry-leading and professional fulfilment services strengtheningquality compliance and cost-effectiveness demands. Leveraging the brand image of “SF Intra-city the first choice for urgentits extensive logistics network and specialized service capabilities delivery” and improving consumers’ satisfaction by providing highthe Company delivered high-quality cost-effective pharmaceutical quality services. Through the upgrading of one-on-one “Exclusivelogistics solutions achieving growth that outpaced the industry Delivery” product and the capability of medium – and long-distance

average. “delivery within an hour” services the Company addressed the

The Company focused on expanding end-to-end supply chain delivery needs for high-value time-sensitive and items with high

services in ten core scenarios within four major segments of safety requirements products. Meanwhile the Company optimized

biopharmaceuticals vaccines IVD and samples. It has achieved its brand promotion and channel marketing strategies which

significant breakthroughs in various aspects such as from contributed to the rapid growth of order volume and revenue from

production warehouse to distribution warehouse from medical proprietary channels including SF Intra-city’s WeChat mini program

institution to testing institution and vaccine reverse logistics and App and an increased user activity. In 2024 the scale of

services. In particular the Company experienced rapid growth annual active consumers in SF Intra-city exceeded 23.41 million.in biopharmaceuticals driven by collaborations with leading Accelerating the Nationwide Network Coverage and

pharmaceutical distribution companies and expansions into Achieving Rapid Market Expansion with Full-scenario Delivery

high-growth scenarios including traditional Chinese medicine and Capabilities: For service scenarios SF Intra-city optimised products

pharmaceutical e-commerce platforms. The Company continued and services around key categories. In 2024 intra-city on-demand

to improve the quality and cost-effectiveness of its self-operated delivery achieved high-double-digit growth in industries including

pharmaceutical warehouses. In 2024 The Company’s Chengdu tea beverages supermarkets and convenience stores cosmetics

warehouse for example obtained the Modern Logistics Acceptance pharmaceuticals and maternity and baby products especially with

Certificate from the National Medical Products Administration. a year-on-year increase of 73% for tea beverages delivery revenue

This recognition validated the modern logistics capabilities of as well as breakthroughs in cooperation with national and regional

the Company’s pharmaceutical warehousing and earned it the supermarket chain customers. For regional expansion SF Intra-city

prestigious supplier and quality awards from leading global has covered over 2300 cities and counties in China including over

pharmaceutical clients. Moreover the Company also expanded 1300 counties. Revenue from counties achieved a year-on-year

into outsourced warehousing services offering comprehensive increase of 121% highlighting the effective expansion in lower-

solutions that combine warehouse operations logistics distribution tier markets. For commercial districts operation both the number

and technology systems deepening the Company’s partnership of served business districts and order density continue to grow

with its customers. with a growing proportion of these areas achieving profitability.Additionally through resource coordination with other business

Intra-city On-demand Delivery segments within the Group the Company developed an integrated

supply chain solution that combines warehousing sortation and

In 2024 the Company’s intra-city on-demand delivery intra-city on-demand delivery. This strategic synergy expanded the

business achieved a tax-exclusive revenue of RMB8.87 billion Company’s customer base while enhancing customer retention.representing a year-on-year increase of 22.4%. Sustained

revenue growth in the intra-city on-demand delivery segment Full-chain Technology Improving Network Timeliness and Rider

combined with technology and lean management-driven operational Efficiency: SF Intra-city’s City Logistics System (CLS) established

enhancements has led to a doubling of its net profit. a full-chain cooperation network to optimally match orders and

riders across industries and under multi-scenarios. By leveraging

Deepened Cooperation and Service Upgrading Expanding the advanced AI-powered models the system significantly enhanced

Merchant and Consumer Base: In terms of merchant collaboration both service experience and operational efficiency across the entire

it reinforced and deepened its relationships with KA customers by workflow – from customer demand analysis merchant operations

leveraging its stable fulfillment service quality. This enabled the strategies intelligent customer service responses to capacity

Company to maintain its leading market share while continuing allocation and delivery execution. In terms of rider management

to expand its network of partnered chain brands. In 2024 the CLS utilized smart algorithms to optimize route planning and

Company added more than 7500 new KA client stores to its dispatch logic taking into account factors such as rider experience

network. Additionally by expanding customer acquisition channels workload weather conditions and peak/off-peak hours. This

and optimizing collaboration processes it increased the number of approach improved rider productivity and income while maintaining

small and medium-sized merchants using its services. Moreover stable delivery timeliness through dynamic adjustments.leveraging its neutral and open market positioning the Company

further deepened cooperation with leading digital platforms to meetAnnual Report 2024 S.F. Holding Co. Ltd. 023

Management Discussion and Analysis

023

Supply Chain and International Business International Express and Cross-border E-commerce

Delivery Services

In 2024 the Company’s supply chain and international

business achieved a tax-exclusive revenue of RMB70.49 billion Outbound logistics demand from China remained robust throughout

representing a year-on-year increase of 17.5%. This business 2024. Despite challenges such as shifts in e-commerce platforms

benefited from stable international air and ocean freight demand from full-entrusted to semi-entrusted logistics models and increasing

rising freight rates and the Company’s strategic focus on capturing pressure for cost-effective delivery solutions the Company

growth opportunities in China’s production capacity expansion leveraged its extensive global network and integrated service

brand globalization and cross-border e-commerce. By deepening capabilities to strengthen partnerships with major e-commerce

its business integration and expanding in both supply chain and platforms. It expanded its customer base to include more cross-

international markets the Company achieved strong growth. The border independent sellers and merchants leading to a 24% year-

Company is committed to becoming the go-to logistics partner for on-year increase in cross-border e-commerce clients. Leveragingcustomers venturing into international markets and “The One in improved door-to-door next-day fulfillment capabilities from China toAsia” with global coverage. Southeast Asia the Company provided efficient cross-border B2C

services to emerging platforms and brand customers addressing

Enhancing End-to-end International Network Infrastructure: The

the pain points of lengthy fulfillment chains slow delivery and

Company continued to strengthen its air cargo network operating

high damage rates. These efforts empowered customers to rapidly

over 9100 all-cargo international flights in 2024 representing a

penetrate the Southeast Asian consumer market. Additionally

year-on-year increase of 19%. The Company established a global

for the delivery flows to Europe and Americas the Company

air network centered on the Ezhou cargo hub connecting Europe

quickly established overseas warehouses to provide customers

and Americas with the Shenzhen Hub as the auxiliary connecting

with one-stop solutions that integrate first-mile parcel consolidation

Southeast Asia Japan and Korea. The number of flights from China

and overseas warehousing focusing on cost-effectiveness and

to South Asia and certain destinations in Europe and Americas

enhancing customer loyalty. For return shipments to China the

doubled in 2024. Meanwhile the Company’s all-cargo flight routes

Company proactively expanded its import services for fresh and

have expanded to reach 10 international terminals in Asia and 8

seasonal food specialties and local products from Southeast Asia

in Europe and Americas. With an airside facility in Singapore the

Europe and the Americas. This improved the loading rates of all-

Company enhanced its cross-border next-day delivery capabilities

cargo aircraft on return flights and improved the overall operational

between China and Singapore as well as China and Southeast

efficiency of international business. In 2024 the Company’s revenue

Asia. Furthermore the Company provided cargo customs clearance

from international express products increased by over 20% year-

services across 78 ports worldwide through both self-operated

on-year.models and partnerships with agents. This includes 10 AEO

Advanced Certifications in China and 14 overseas ports with

self-operated customs clearance capabilities further enhancing International Cargo and Freight Forwarding Business

the clearance efficiency of the Company’s parcels. In addition The global economy revived slowly in 2024 where inflation gradually

the Company increased the investment in self-operated overseas eased and merchandise trade showed signs of recovery. However

warehouses in Asia Europe and Americas serving B2B supply geopolitical instability rising trade protectionism and supply chain

chains and B2C cross-border e-commerce businesses. Besides restructuring introduced new uncertainties. The global freight

the Company also continued to collaborate with local express market faced supply shortages starting in May 2024 due to

logistics companies in Europe and Americas establishing stable geopolitical conflicts driving up ocean and air freight rates with

local pick-up delivery and fulfillment capabilities. Through the ocean freight demand exceeding supply in the third quarter.above-mentioned network capacity building the Company fulfills Meanwhile air freight remained in high demand particularly for

the efficiency requirements of cross-border e-commerce and China’s thriving cross-border e-commerce sector. The Company

multinational production and distribution supply chains. flexibly adjusted its strategies to capture market opportunities

Expanding Supply Chain and International Markets: The leveraging its extensive resources to offer stable and high-quality

Company continuously developed cost-effective and high-quality international freight forwarding services while continuously

international express and cross-border e-commerce logistics improving operational efficiency. Benefiting from sustained high

products. Leveraging deep understanding of various industries and freight rates on key trade lanes from China to Southeast Asia

integrating the supply chain service capabilities of Fenghao Supply Europe and Americas as well as stable air cargo volume growth

Chain SXH China Logistics and KLN the Company provided the Company’s international cargo and freight forwarding business

domestic and international integrated supply chain solutions tailored recorded over 30% year-on-year revenue growth in 2024.to various industries’ characteristics and needs. Meanwhile guided

by the keynote of energizing organizational vitality the Company

optimized the incentive mechanisms for international business

teams in order to effectively promote the development and growth

of international business.024 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Supply Chain Services Operation Optimization

The Company has capitalized on the growing trend of Chinese

enterprises expanding their production capacity and brands Sorting process

overseas building efficient and reliable international supply chains Establishing Efficient Sorting Networks: The Company continues

for clients. It achieved breakthroughs from 0 to 1 to scale across to enhance the efficiency of its network by streamlining its

multiple countries industries and service scenarios. In 2024 the backbone network operations and consolidating multifunctional

Company secured contracts for over 100 overseas supply chain large-scale sorting centers reducing the number of sorting centers

projects with more than 50 successfully implemented. These by 22. Technology has been leveraged to improve sorting center

projects serve leading clients across diverse sectors including management and efficiency including the use of software robotics

e-commerce and circulation industrial manufacturing high-tech for automated data analysis and process monitoring simulation

apparel and footwear home appliances and furniture automotive models intelligent warning systems and other tools to assist on-

and coffee and tea beverage chains. The services span key markets site management and minimize human intervention. The Company

such as Singapore Malaysia Vietnam Thailand South Korea deployed hundreds of AGVs and approximately 300 sets of

Philippines Netherlands Germany and France. automated equipment to improve sorting efficiency. In 2024 the

In the coffee and tea beverage industry the Company has sorting efficiency of small parcel increased by 13% and the sorting

supported a number of emerging Chinese coffee and tea brands efficiency of large parcel improved by 8.5%.in their overseas expansion including assisting a coffee brand Improving the Operational Efficiency of Sorting Centers: The

client in the quick opening and operation of more than 50 stores Company has been transforming sorting centers into operational

in Singapore and as the exclusive supply chain partner of a tea centers enhancing their autonomy and awareness to maximize

brand client for overseas expansion supporting it to open 110 resource utilization. Initiatives included adding collection function

stores in eight countries. In the automotive industry the Company direct parcel delivery to sorting centers to skip the consolidation

not only provided cross-border air and sea transportation services at outlets; warehousing functions have been added to achieve

for new energy materials batteries and high-end equipment “upper-layer warehouse lower-layer sorting” operations maximizing

but also successfully undertook the integrated warehousing and the utilization of storage space. Management structures have

distribution logistics services for overseas auto spare parts of a been streamlined and performance-driven incentive programs

leading automotive enterprise. This includes integrated supply chain were introduced to enhance employee motivation. The Company

services covering customs clearance of auto spare parts port-to- streamlined processes integrated resources and optimized staffing

warehouse transfer warehousing and local store distribution. In scheduling to enhance staff efficiency in different functional areas

the consumer goods sector the Company provided efficient air maximizing operational efficiency.and ground transportation services for the export of raw materials

and components in the multinational production supply chain of Establishing the Industry’s First Unmanned Sorting Center

3C electronic products. In the consumer goods sector beyond with Cage Trolleys: The Company established the industry’s first

its existing role in managing cross-border supply chains for 3C unmanned intelligent sorting center enabling parcels to be loaded

electronics the Company capitalized on the growing trend of and transferred using cage trolleys. This innovative unmanned

Chinese cultural IP brands expanding internationally. It served a top- sorting mode reduced human labor and partially implemented

tier domestic designer toy brand with comprehensive international fully automatic operations. With a processing capacity of over

logistics solutions including express delivery cross-border ground 1200 cage trolleys per hour the sorting center achieved a daily

transportation and overseas warehousing. The services covered peak sorting efficiency that amounts to four times of the network

both online direct-to-consumer channels and offline retail stores average while reducing container handling time by 45% compared

facilitating the brand’s entry into the Southeast Asian market. In to normal parcel handling. The Company has begun collaborating

the engineering logistics sector the Company leveraged its with certain customers to consolidate parcels into cage trolleys at

extensive logistics network and integrated capabilities with KLN to the warehouse level and deliver directly to the destination reducing

successfully execute multiple overseas infrastructure projects for the number of sorting. This approach reduced sorting costs per

Chinese enterprises. These projects spanned renewable energy parcel improved delivery timeliness and significantly reduced

sectors such as wind power photovoltaics and energy storage parcel damage rates and customer complaint rates.showcasing the Company’s leading expertise in complex cross-

border logistics solutions.Annual Report 2024 S.F. Holding Co. Ltd. 025

Management Discussion and Analysis

025

Transportation shipping outlet transportation and the deployment of unmanned

vehicles in the short-haul and last mile delivery the Company

Optimizing Route Planning for Ground Transportation: With has achieved continuous cost reduction for the transformation.the integration of sorting centers as well as the consolidated In the fourth quarter of 2024 the average cost savings per

transportation for small and large parcels the Company parcel under the transformation areas exceeded the incremental

continuously refined sorting modes and route planning to streamline investment achieving positive operational results. This operational

the process. In 2024 the Company added nearly 440 direct routes transformation reduced the procedures at the outlets lowering

between places of departure and destination cities increasing the labor costs of warehouse management at outlets and branch

city connectivity and reducing the average number of sorting. transfers and shortened the average distance by 38% for parcel

Additionally the Company fully leveraged the capacity of the Ezhou handovers by couriers thus improving the network efficiency.cargo hub to create a ground transportation hub. By adopting an

optimal planning approach that allowed parcels between north and Incentivizing Couriers for Revenue Growth: The Company

south China to be consolidated and sorted at the Ezhou cargo hub established a performance evaluation system tailored for couriers.the Company maximized direct routes from the Ezhou cargo hub Through regional rankings and incentive mechanisms cash rewards

to the destinations on the basis of the guaranteed loading rate were provided to top-performing couriers who demonstrated

thus reducing transit frequency while improving delivery timeliness. exceptional business development. The Company also identified

and incentivized couriers who showed significant sales progress

Optimizing Transportation Resource Allocation: Transportation and potential. Additionally the Company provided training and

capacity has also been strategically restructured. In terms of growth opportunities for lower-performing employees to enhance

line-haul transportation the Company prioritized long-term contracts their competitiveness. Furthermore the Company continued to

with stable pricing ensuring that over 95% of transportation needs build a system of team leaders by nominating couriers with

are fulfilled by self-owned or long-term outsourced fleets securing strong sales capabilities and outstanding leadership skills as team

cost stability. Fleet upgrades were also a key focus with more than leaders in specific regions with respective titles as well as clear

1000 line-haul routes shifting to high-capacity vehicle models responsibilities and rights. Under this system team members in

adding over 140000 long-haul trips in 2024 lowered per-unit the region could work collaboratively and grow their income with

transport costs. Additionally round-trip optimized routes increased increasing business volume.by 11 percentage points and the use of self-owned vehicles

was expanded significantly reducing outsourced transportation Enhancing Courier Efficiency: The Company continuously

costs. For short-haul transportation the Company reduced costs innovated and iterated on tools for courier collection and delivery

by implementing standardized pricing for routes and deploying efficiency and reduce labor intensity. In 2024 the small parcel

large-capacity vehicles on multi-stop routes to handle small-parcel collection and delivery efficiency increased by 7.8% over the

transport tasks. previous year and the freight collection and delivery efficiency

increased by 9.1% over the previous year. With the help of

Last-Mile Delivery intelligent robots built on a large language model the Company

provided instant answers to various inquiries accumulating over

Enhancing Outlets Efficiency: The Company launched the 5 million inquiries resolved and assisting couriers in standardizingoperational transition of “direct sorting and delivery from sorting operations and improving customer experiences. By setting upcenters using cage trolleys to the service outlets” model. Instead WeCom accounts and integrating them with the courier collection

of traditional model which requires sorting twice at sorting center and delivery system the Company enabled automatic notification

and service outlet this new model only requires one-time sorting of delivery information to customers improving communication

at the sorting center with direct delivery to the couriers effectively convenience between couriers and customers. Moreover the

enhancing the operational efficiency. This model has been Company’s marketing strategies could be quickly and efficiently

implemented in over 3400 service outlets and over 9600 terminal sent to customers through WeChat empowering couriers in

stations by the end of 2024. Through continuous optimization business development and enhancing customer retention. By the

of outlet layouts integration of nearby areas for consolidated end of 2024 the Company’s WeCom accounts had engaged over

12 million customers.026 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Core competitiveness

The Company has an efficient and reliable global logistics infrastructure network

rooted in China radiating to Asia and connecting the world

Note: The data below are all as of December 31 2024

Global service network coverage

Domestic

Prefecture-level divisions County-level divisions

covered in China covered in China

3392813

Prefecture-level divisions coverage County-level divisions coverage

100%98.9%

Overseas

International express delivery

freight forwarding and supply International small parcels

chain business business

100 countries and countries and regions covered 206 regions coveredAnnual Report 2024 S.F. Holding Co. Ltd. 027

Management Discussion and Analysis

027

We are operating a cargo airline that is the largest in China and maintains leading position in the world

Waned awree oapree raalstion gth ae claarrggeos at isrlhinipep thear to ifs a tihr ec alargrgoe isnt Cinh Cinhaina and maintains leading position in the world

and we are also the largest shipper of air cargo in China

Note: For the data below the time points are all as of December 31 2024 and the periods are all from January 1 2024 to December 31 2024.Note: For the data below the time points are all as of December 31 2024 and the periods are all from January 1 2024 to December 31 2024.SF’s global air cargo volume

SF2’s glob4al a2ir ca0rgo volume2420000000tonstons

SF’s domestic cargo volume accounted for

S3F’s1 do.m1es%tic cargofo t hveo nlautmionea l aaicr counted forcargo and mail traffic31.1% of the national air cargo and mail trafficAll-cargo aircraft

SF’s global average daily flights

All-cargo aircraft

SF5’s glob2al a0ver0age daily flights

111079834

times

all-c1arg0o p7ilots9 in se8rvice p3airs 4of fligaircraft in operation 69 domest33 timesht righ ts 5200ic destinations

8al9l- caairrcgraof t self-operated pilots in service 5p1ai rins toefr nflaigtihotn raigl hatnsd regional

aircraft in operation d69es dtionmateiosntisc cdoevsetirneadtions

89 aircraft self-operated 51 international and regional

11773

destinations covered

1240

routes o3perated worldwide of cargo55000 flights of w1hich m2ore 4than 0000

tons

tons

3200000 ton0s 0

r5o2u tinetse ronpaetiroanteadl r owuotreldsw inid e wofe crea rsghoip ped internationally

5op5e0r0at0io flnights of which more than 320000 tons

5O2v einr t9er1n0a0tio flnigahl rtosutes in were shipped internationally

operation

Over 9100 flights

Belly Cargo Capacity

Belly Cargo Capacity

33000 13000 domestic0 rou0tes0 inte1rn3ationa0l ro0utes0

domestic routes i n t ernational routes

1860000 1860000 111180flights in shipments of whicwere shipp8ed in0terna000000tonsh over 430000 tonstionally tons

flights in shipments of which over 430000 tons

were shipped internationally

The Ezhou cargo hub is the first dedicated air cargo hub in Asia and The strategic vision for the Ezhou cargo hub is not only to become

fourth in the world which is of strategic value and scarce position. the center of global supply chain but also as a high-end processing

The Company officially commenced operation of its logistics complex and distribution hub. Top-tier customers from various industries

in the Ezhou cargo hub in September 2023. By the end of 2024 55 including 3C electronics cosmetics and cold-chain pharmaceuticals

domestic and 15 international cargo routes had been launched at have established their presence in the Ezhou cargo hub. The hub-

the Ezhou cargo hub. The Ezhou cargo hub features an extensive and-spoke mode of the Ezhou cargo hub enables the Company to

52-kilometer intelligent sorting line that can process up to 280000 enhance its aviation network to seamlessly integrate domestic andparcels per hour at its peak capacity. Additionally 14 intelligent international routes thus gradually achieving “overnight nationwidecustoms inspection lines featured with a fully automated sorting delivery and the third day global connectivity.”

system ensure efficient customs clearance pickup and delivery

of international parcels. In 2024 the international cargo volume at

the Ezhou cargo hub witnessed over 200% growth as compared

to 2023.028 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Our extensive transportation resources allow us to provide domestic

and cross-border multi-modal transportation services for our customers

Note: For the data below the time points are all as of December 31 2024 and the periods are all from January 1 2024 to December 31 2024.Ground transport Railway transport

High-speed rail express

100000 products with General railway trains

trunk and feeder trucks under 883flows 240lines

management worldwide

100000 International trains 38

vehicles for termination's collection 303lines countries and regions covered

and distribution

Total volume of rail shipments

3220000 tons

Sea freight

18000 Sea freight shipments

maritime routes 1230000TEUAnnual Report 2024 S.F. Holding Co. Ltd. 029

Management Discussion and Analysis

029

The globally-spread outlets pillaring

our international and localized operations

Note: The data below are all as of December 31 2024

Service outlets

3600014000440000

domestic service outlets and overseas self-operated & network-wide couriers

other service stations joint-operated outlets

160000

cooperative service points

(including city stations and rural distribution shops)

Sorting Hubs

Express Hubs Freight Hubs

221152

sorting hubs sorting hubs

in operation in operation

Warehouses

operational warehouses covering franchised warehouses

1700 9.9million sqm 59

137 12 950 covering

food cold-warehouses pharmaceutical overseas warehouses

covering warehouses covering covering 0.99million sqm

0.800.102.5

million sqm million sqm million sqm030 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

We possess numerous key site resources such as logistics parks and logistics centers in countries

including China and Southeast Asian both through our direct ownership or via REITs

Note: The data below are all as of December 31 2024

Total land area Total building area

12.11million sqm 11.08million sqm

Completed operational projects Projects to be completed in the year of 2025

and beyond

Land area Land area Building area

9.56million sqm 2.55 million sqm 2.28million sqm Changchun

Building area Shenyang

8.79million sqm

Urumqi Beijing Weihai

a

hai Se

Tianjin Bo QingdaoShijiazhuang

Weifang w Seao

Hebi Yell

Nanjing

Zhengzhou Yancheng

Nantong Changzhou

Lanzhou Luoyang Huai’an

a Sea Wuxi

Xi’an Hefei East C

hin

Maanshan Suzhou

Xiaogan Yiwu KunshanWuhu

Wuhan Shanghai

Chengdu Quzhou wei Yu

Nanchang Jiaxing

Chi

Yiyang

Lhasa JinhuaChongqing Wenzhou iaoyu Islan

ds Ningbo

D

Changsha Quanzhou

Ganzhou

Guiyang Xiamen Zhangjiagang

Guangzhou

Taiwan EzhouLiuzhou Foshan Dongguan

Mundra Huizhou

Nanning Zhongshan

Zhuhai Shenzhen

Hong Kong

ngsha Is

lands

Do

Haikou

Mumbai

ainan Is

land

H

Bay of Bengal n Islan

d

a

Xisha Is

lands Huang

y

China

Sea

Yangon Region uth Rayong So

Da Nang City

Islands

hongsh

a

Z

Tamilnadu

l

Phnom Penh James Shoa

Completed operational projects Mandalay Region

Projects to be completed in the year of 2025 and beyond

Binh Duong Province

Tampines

Note 1: Where there are multiple legends preceding the name of a single city it

indicates that the projects in that city are being constructed in phases or there Chonburi Province Map scale

are multiple projects in that city and their completion dates fall in different

intervals. Samutprakan Province

Note 2: The above data includes industrial park projects that have been placed into the

real estate investment trusts which are operated and managed by the Company.Yangt Yz ee l lR oi wve Rr iver

Nansha IslandsAnnual Report 2024 S.F. Holding Co. Ltd. 031

Management Discussion and Analysis

031

Industry-leading Logistics Technology and an intelligent supply chain system and combining professional

algorithms and operational data analysis the Company provided

Application Facilitating Intelligent Supply accurate supply chain solutions. For instance in addressing

Chain out-of-stock scenarios the AI model identifies root causes and

suggests corrective actions to help customers respond to market

The Company is committed to building an intelligent supply chain

fluctuations efficiently enhancing decision-making speed and

ecosystem in the digital era and aims to become the leader in the

accuracy.intelligent supply chain sector. By leveraging deep insights into

supply chain scenarios and extensive experience serving top-tier SF Large Language Model: SF’s proprietary large language

industry clients along with continuous exploration and application model is widely applied across over 20 business scenarios

of cutting-edge technologies the Company enhances the efficiency including customs clearance customer service pickup and

of its internal logistics network while providing customers with delivery and marketing empowering employees with industry

best-in-class digitalized logistics and supply chain solutions. knowledge and improving operational efficiency while delivering

superior customer experiences. The applications include: *

By the end of the Reporting Period the Company had 4180

Operational optimization: In sorting process the AI-driven smart

patents and patent applications with invention patents accounting

security screening system combined with full-chain monitoring

for 61.5% of the total and 2505 software copyrights. The Company

automatically detects risks and ensures parcel security. In pickup

actively collaborated with logistics and supply chain organizations

and delivery operations AI-powered digital assistants provide

universities and other social institutions to enhance the social

real-time training and Q&A support to new couriers enabling them

impact of its technological advancements. Meanwhile the Company

to quickly learn parcel handling standards and product information.was named as one of the top six finalists in the global competition

The system achieves a 99% accuracy rate in understanding

of the prestigious Franz Edelman Award for Operations Research

inquiries. * Customs clearance optimization: During the order

and Management Science for 2025. It was also selected as one of

placement process the large language model automatically

the first batch of benchmark cases for Digital China initiative by the

analyzes customs regulations from multiple countries ensuring

National Data Administration and received recognition in the relevant

precise clearance procedures. During document verification the

category of the IDC China Future Enterprise Award. Additionally the

model automatically reviews shipment details achieving a 97%

Company was honored with the Science and Technology Award by

auto-review rate at selected customs ports. In customs inspection

the China Federation of Logistics & Purchasing in 2024.the multi-modal AI model analyzes product images and determines

clearance eligibility achieving an 83% human-machine match rate

The Application of Large Models significantly improving customs clearance efficiency. * Enhancing

SF has developed logistics decision-making models and large customer experience: In the parcel ordering process customers

language models tailored to the logistics and supply chain can complete orders using a single voice command. In return

industry. These innovations significantly enhance supply chain logistics users can upload a product image to automatically

decision-making and daily operational efficiency accelerating the generate a return request with the large language model extracting

industry’s transition to intelligent logistics. order details in just nine seconds. In customer service AI-powered

assistants extract key information from conversations and generate

SF Logistics Decision-Making Model: Leveraging years of real-time summaries reducing customer service response time by

industry expertise and underlying data the Company’s AI-driven 30%.logistics decision-making model overcomes traditional algorithm

limitations significantly enhancing intelligent decision-making in The Company will continue to explore the application of large

logistics. This model has been successfully implemented in several model technology in logistics services across more industries and

industries such as cosmetics 3C food and automotive parts. The scenarios driving the intelligent transformation and upgrades of the

model is mainly used in the following areas: * Volume demand logistics and supply chain industry.forecasting: By integrating multi-modal AI technology the model

extracts deep insights from product images and textual information The Application of Unmanned Technologies

building multi-scale multi-channel forecasting models that improve

The Company has extensively explored and implemented

prediction accuracy while reducing resource consumption. In one

automation and unmanned technology across various logistics

case study the model reduced server resource usage by 80%

scenarios driving transformation in operational models and

increased computational efficiency by 120 times and improved

enhancing network efficiency.prediction accuracy by 5%. * Decision optimization: The

decision-making large model significantly improved computational Unmanned Sorting Centers: Through the transformation of transit

efficiency in supply chain route planning and packing optimization. model the Company utilized AGV equipment for short-distance

For example in terms of transportation route optimization the automated handling and sorting operations at the sorting centers.model can quickly respond to complex scenarios involving inbound The Company’s self-developed Xinghe Dispatch Management

logistics store delivery and short-haul network planning eliminating Platform has been integrated into over 60 large SF sorting centers

tedious customized development processes and responding flexibly managing nearly a thousand AGVs and completing over 5.2 million

to business requirements. * Operational analysis: By building automated container transits.032 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Unmanned Vehicles: The Company deployed over 800 customized by high uncertainty and complex processes. Given the customer’s

unmanned vehicles for short-haul transportation between sorting relatively independent business management and absence of data

centers and service outlets the connection between service outlets communication the Company built a digital and visualized logistics

and couriers’ collection and delivery areas and pickup and delivery management platform that integrates marketing warehousing

within enclosed areas such as industrial parks and campuses. This transportation and settlement processes. This platform made the

automation of short-haul transportation and collection and delivery entire supply chain transparent reducing information barriers and

has improved efficiency and reduced costs. By building a unified management costs. In addition the energy industry often involves

platform for unmanned vehicle integration and simplifying loading bulk commodity trading and customers tend to use multimodal

and unloading operations the Company effectively reduced the transportation. The Company intelligently identified rational delivery

operational costs for future new scenarios and vehicle types. outlets return vehicle routes and orders with the same delivery

direction while smartly dispatching resources such as vehicles

Unmanned Warehouses: The Company has developed automated

and ships to reduce costs and improve transportation efficiency. In

warehousing systems that integrate robotic storage and retrieval

terms of warehousing the Company accurately analyzed inventory

solutions offering customized end-to-end automation for various

level and outputs logistics demand plans to help the company

industries. For example for the cosmetics industry where SKU

improve its level of intelligent management.complexity small item handling and expiration management are

critical the Company’s automated warehouses feature high-density New energy vehicle industry case: The Company cooperated

storage solutions that optimize space and labor efficiency. These with a leading new energy vehicle brand to create an integrated

facilities include shuttle-based warehousing systems for accurate after-sale solution for auto parts circulation that includes

pallet and item-level handling AGVs lifting mechanisms and transportation warehousing and distribution services based on

sorting machines ensuring seamless inventory control and the its self-developed supply chain system. By structured integration

ability to process over 100000 daily outbound orders. The system of express FTL LTL and store delivery transportation modes

is already implemented in pharmaceuticals high-tech home the Company improved transportation flexibility and intelligently

appliances and other industries. and dynamically distributed transportation resources based on

the weight volume and flow direction of the shipments reducing

The Application of Robot Process Automation transportation costs. The Company also provided various efficient

Technologies system access methods and in conjunction with the transportation

execution monitoring module allowing customers to transparently

RPA technology simulates human operations to automate repetitive control logistics performance quality. In addition with years of

and rule-based business processes across logistics operations experience in self-operated warehousing services the Company

significantly improving efficiency and optimizing workflows. The provided standard warehousing and distribution services for the

Company extensively utilized RPA robots covering various stages customer’s own online store ultimately forming a comprehensive

of collection sorting transportation and delivery to improve supply chain technology solution from warehousing to distribution

operational efficiency and optimize business processes. This which currently serves multiple well-known automobile companies.technology assisted employees in automatically generating daily

weekly and monthly reports reducing the burden of repetitive Consumer goods industry case: The Company cooperated

report preparation. It also helped employees monitor performance with a top-tier condiment brand to build an all-channel intelligent

metrics such as timeliness and delivery efficiency providing data for order center achieving intelligent distribution ordering and order

analysis and reporting. Currently these robots are deployed at the processing. When distributors place orders the system can

Company’s various scenarios such as sorting centers and service automatically provide ordering suggestions improving the accuracy

outlets. In customer-facing processes RPA applications expanded of dealer orders and increasing the sales of brand merchants.self-service capabilities for customers significantly improving The intelligent order center aggregates all-channel inventory

response timeliness. In the delivery process the Company utilized information providing real-time scheduling of available inventoryRPA robots to automatically monitor the status of parcels at resources for each sales channel achieving all-channel “onedifferent time periods and promptly remind couriers at each stage inventory” management. At the same time it manages the order

enhancing on-time delivery rates and overall customer service fulfillment status of each channel realizing automatic order review

quality. allocation and shipping improving order processing efficiency and

customer experience. Currently this solution has been replicated

and promoted among multiple customers in the food industry.Intelligent Supply Chain Solutions

SF provides comprehensive digital supply chain solutions for top-tier Intelligent Logistics Products

industry clients across high-end manufacturing cosmetics auto

parts home appliances and consumer goods industries. The For small and medium-sized customers the Company utilized

Company has successfully developed hundreds of industry use light-version SaaS products to enhance the value-added

cases empowering over 4000 customers with smart supply chain services in various aspects of its express delivery and logistics

management. services. The Company has successfully deployed dozens of

technology-powered SaaS products enabling SMEs to streamline

Energy industry case: The Company partnered with a well-known supply chain operations reduce costs and optimize last-mile

petrochemical company to provide an end-to-end data-driven supply delivery performance.chain solution. The energy industry supply chain was characterizedAnnual Report 2024 S.F. Holding Co. Ltd. 033

Management Discussion and Analysis

033

Premium service establishing an unparalleled SF’s commitment to excellence has led to unparalleled brand value.The Company has built a loyal and highly engaged customer base

brand value across various industries becoming the go-to logistics partner for

In China SF is a household name and has become a synonym for many top-tier customers. This dedication to premium service has

high-timeliness express delivery service. “Let me SF this to you” earned SF wide recognition from customers industry peers and

has been equivalent with “express delivery to you”. The Company the public alike.has built a strong brand reputation centered around “fast” “reliable” In the ranking released by the State Post Bureau SF has been

and “premium service” setting the industry benchmark for superior ranked first in public satisfaction with express delivery services for

customer experiences. As a result many corporate customers 15 consecutive years (2009-2023) and the first three quarters of

actively advertise their use of SF as a symbol of premium service 2024 as well. The Company ranked 415th in the Fortune Global 500

and brand trustworthiness. By associating their products with list for 2024 released by Fortune magazine. It has been on this list

SF’s premium services corporate customers are able to enhance for three consecutive years and it is also the first and only Chinese

consumer perception of their product quality foster greater trust private express delivery enterprise among the Fortune Global 500.and improve sales performance.State Post Bureau

for 15 consecutive years

No.1 No .1

in Overall Customer Satisfaction in Overall Customer Satisfaction in 2023

in the first three quarters of 2024

(As of the disclosure date of the annual

report the data of express satisfaction

survey for 2024 has not been released)

Fortune

415 selected for 3 consecutive years 2 selected for 8 consecutive years selected for 3 consecutive yearsth nd China ESG

among “2024 Global 500 Companies” among “Most Admired Chinese Impact ListCompanies” in 2024

Brand Finance

396 selected for 5 consecutive years 7 selected for 6 consecutive yearsth th 7th

among “World’s Top 500 Most Valuable Brands” among “World’s Top 10 Most Valuable Logistics among “World’s Top 10in 2024 Brands” in 2024 Logistics Brands by SustainabilityPerceptions Value” in 2024034 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Financial Review

Revenue

In 2024 the Company adhered to sustainable and healthy development and achieved high-quality business growth. The total revenue of

the Group reached RMB284.42 billion representing an increase of 10.07% as compared to the same period in 2023 (excluding Fengwang

business the total revenue increased by 10.35% year-on-year). The breakdown of the revenue categorized by industry by operating segmentand by geographical region is set out below. For details of the development of each major business please refer to “Business Developmentof the Company” in this section.Year ended December 31

20242023

Amount change

Percentage of Percentage of over the

Amount revenue Amount revenue previous year

RMB’000 RMB’000

Total revenue 284420059 100.00% 258409403 100.00% 10.07%

Categorized by industry:

Logistics and freight forwarding 276275771 97.14% 251127665 97.18% 10.01%

Other non-logistics business(1) 8144288 2.86% 7281738 2.82% 11.85%

Categorized by operating segment:

Express and freight delivery segment 200162392 70.38% 186890137 72.32% 7.10%

Time-definite express 122205976 42.97% 115456067 44.68% 5.85%

Economy express 27251227 9.58% 25051548 9.69% 8.78%

Freight 37641125 13.23% 33078821 12.80% 13.79%

Cold chain and pharmaceutical logistics 9812161 3.45% 10312988 3.99% -4.86%

Others(2) 3251903 1.14% 2990713 1.16% 8.73%

Intra-city on-demand delivery segment 9010521 3.17% 7371250 2.85% 22.24%

Intra-city on-demand delivery 8872800 3.12% 7249500 2.81% 22.39%

Others(2) 137721 0.05% 121750 0.05% 13.12%

Supply chain and international segment 74000342 26.02% 62859302 24.33% 17.72%

Supply chain and international business 70492482 24.78% 59978741 23.21% 17.53%

Others(2) 3507860 1.23% 2880561 1.11% 21.78%

Undistributed units(3) 1246804 0.44% 1288714 0.50% -3.25%

Categorized by region:

Mainland China 242796156 85.37% 223510607 86.49% 8.63%

Hong Kong Macao and Taiwan China 9467291 3.33% 9134850 3.54% 3.64%

Other international 32156612 11.31% 25763946 9.97% 24.81%Annual Report 2024 S.F. Holding Co. Ltd. 035

Management Discussion and Analysis

035

Notes:

(1) “Other non-logistics business” categorized by industry mainly represents the ancillary non-logistics services provided by the Company including the

purchase and sales of goods involved in the process of providing end-to-end supply chain services for customers leasing services and provision

of technical services.

(2) “Others” categorized by operating segment mainly comprise the purchase and sale of goods involved in the process of providing end-to-end supply

chain services for customers.

(3) “Undistributed units” mainly comprise leasing services and provision of technical services.

(4) Any discrepancies between totals and sums of the numbers are due to rounding.

Cost of Revenue

The cost of revenue of the Group in 2024 amounted to RMB245.52 billion representing an increase of 8.75% as compared to the same

period in 2023 which was in line with the growth trend of revenue during the Reporting Period. The breakdown of the cost categorized by

industry is set out below:

Year ended December 31

20242023

Amount change

Percentage of Percentage of over the

Amount cost of revenue Amount cost of revenue previous year

RMB’000 RMB’000

Total cost of revenue 245524112 100.00% 225775678 100.00% 8.75%

Categorized by industry:

Logistics and freight forwarding 238694175 97.22% 219622449 97.27% 8.68%

Labor cost(1) 112117267 45.66% 102785140 45.53% 9.08%

Transportation cost(1) 93294058 38.00% 82930208 36.73% 12.50%

Other operating costs 33282850 13.56% 33907101 15.02% -1.84%

Other non-logistics business 6829937 2.78% 6153229 2.73% 11.00%

Note:

(1) The Company calculated the costs and expenses accurately according to the nature of resources in accordance with relevant provisions of the

accounting standards. For details please refer to note 8 to the consolidated financial statements. As outsourced resources were used in some

parts of the logistics network operation of the Company in order to effectively analyze the composition of the operating costs the Company mainly

divided its outsourcing costs into labor outsourcing cost and transportation outsourcing cost which were aggregated with the employee benefit

expenses and transportation expenses as labor cost and transportation cost respectively.Among which the cost of revenue of logistics and freight forwarding business was RMB238.69 billion representing an increase of 8.68%

compared to the same period in 2023. It was mainly affected by changes in the following three major cost items:

The labor cost was RMB112.12 billion representing an increase of 9.08% compared to the same period in 2023 mainly because the Company

has always attached great importance to the salary competitiveness of couriers and other frontline employees and introduced comprehensive

incentive mechanism to encourage the couriers to actively engaging in business development. The growth in business volume further increased

the remuneration of employees.The transportation cost was RMB93.29 billion representing an increase of 12.50% compared to the same period in 2023 mainly due to the

rapid growth of the Company’s international cargo and freight forwarding business as well as the expansion of express logistics business in

China which led to more investment in transportation resources.The other operating costs was RMB33.28 billion representing a decrease of 1.84% compared to the same period in 2023. Other operating

costs mainly include depreciation and amortization expenses depreciation charge of right-of-use assets venue usage expenses and taxes

and surcharges. The Company further developed the centralized construction of sorting centers and continued to invest in automated sorting

and smart warehousing equipment to fully utilize the benefits of venues and improve operating efficiency resulting in the slight decrease in

other operating costs as compared to the previous year.036 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Gross Profit and Gross Profit Margin

The overall gross profit of the Group in 2024 amounted RMB38.90 billion representing an increase of 19.19% as compared to the same

period in 2023. The breakdown of the gross profit categorized by industry is set out below:

Year ended December 31

2024 2023 Year-on-year change

Change in

Gross profit Gross profit Change in gross profit

Amount margin Amount margin amount margin

RMB’000 RMB’000

Total gross profit 38895947 13.68% 32633725 12.63% 19.19% Up by 1.05

percentage

points

Categorized by industry:

Logistics and freight forwarding 37581596 13.60% 31505216 12.55% 19.29% Up by 1.05

percentage

points

Other non-logistics business 1314351 16.14% 1128509 15.50% 16.47% Up by 0.64

percentage

point

Among which in 2024 the gross profit of logistics and freight forwarding business was RMB37.58 billion representing an increase of 19.29%

as compared to the same period in 2023 and the gross profit margin was 13.60% representing an increase of 1.05 percentage points as

compared to the same period in 2023 reflecting the continuous improvement in profitability. The change in gross profit margin was mainly

affected by changes in the percentage of the following three major cost items to revenue:

Year ended December 31

2024 2023 Year-on-year change

Percentage of labor cost to revenue 40.58% 40.93% Decreased by

0.35 percentage point

Percentage of transportation cost to revenue 33.77% 33.02% Up by

0.75 percentage point

Percentage of other operating costs to revenue 12.05% 13.50% Decreased by

1.45 percentage points

Labor cost-to-revenue ratio decreased by 0.35 percentage point from the same period in 2023 and increased by 0.77 percentage point from

the same period in 2023 if KLN1 being excluded. While enhancing the competitiveness of employees’ salaries the Company also improved

its operational efficiency and managed to control the rise in labor costs by reforming its operating model and investing in automated and

unmanned equipment.Transportation cost-to-revenue ratio increased by 0.75 percentage point from the same period in 2023 and decreased by 0.78 percentage

point from the same period in 2023 if KLN1 being excluded. This was mainly because the Company continued to streamline its network

structure promote consolidated deliveries and streamline routes and reduce transit process as well as effective control over transportation

capacity procurement which contributed to the continuous optimization of the transportation cost.Other operating costs-to-revenue ratio decreased by 1.45 percentage points from the same period in 2023 and decreased by 1.15 percentage

points from the same period in 2023 if KLN1 being excluded. This was mainly because the Company adhered to lean operations strengthened

the management of resources effectively controlled the increase in capital expenditure maintained a healthy ratio of capital expenditure to

revenue thus ultimately achieving better economies of scale along with the growth in parcel volume.Note 1: There are significant differences between the cost structure of KLN (in which transportation costs of international freight forwarding

business account for a large proportion) and that of the Company’s express & other logistics business. In order to provide a clearer

picture of the changes in the breakdown of the Company’s costs cost analysis above also presents data excluding KLN business.Annual Report 2024 S.F. Holding Co. Ltd. 037

Management Discussion and Analysis

037

Selling and marketing expenses Other income

The selling and marketing expenses of the Group in 2024 amounted Other income of the Group in 2024 amounted to RMB0.99 billion

to RMB3.10 billion representing a year-on-year increase of representing a year-on-year decrease of RMB1.29 billion compared

3.50% compared with RMB2.99 billion in 2023 and the selling with RMB2.28 billion in 2023 which was mainly because the

and marketing expenses ratio was 1.09% in 2024 representing preferential tax policy on VAT (according to the Announcement

a year-on-year decrease of 0.07 percentage point compared No. 1 [2023] of the Ministry of Finance and the State Taxation

with 1.16% in 2023. This was mainly because the Company’s Administration) has expired in December 2023 and the amount of

continuous effort to lean operations resulting in the selling and government grants decreased accordingly.marketing expenses remained stable.Finance costs net

General and administrative expenses

The finance costs net of the Group in 2024 amounted to RMB1.76

The general and administrative expenses of the Group in 2024 billion representing a year-on-year increase of 7.29% compared

amounted to RMB18.73 billion representing a year-on-year increase with RMB1.64 billion in 2023 mainly due to an increase in interest

of 5.44% compared with RMB17.77 billion in 2023 and the general expenses on borrowings.and administrative expenses ratio was 6.59% in 2024 representing

a year-on-year decrease of 0.29 percentage point compared with

6.88% in 2023. This was mainly due to the Company’s adherence Income tax expense

to lean operations technology empowerment to digitalized and The income tax expense of the Group in 2024 amounted to

intelligent management streamlined organizational structure and RMB3.39 billion representing an increase of 31.59% as compared

improved management efficiency. with the corresponding period in 2023 which was mainly due to the

increase in the profit for the year of the Company and the effective

Research and development expenses income tax rate remained stable.The research and development expenses of the Group in 2024

amounted to RMB2.53 billion representing a year-on-year increase Profit

of 10.86% compared with RMB2.29 billion in 2023 and the The Group achieved profit of RMB10.22 billion in 2024 representing

research and development expenses ratio was 0.89% in 2024 an increase of 29.16% as compared to the same period in 2023. Of

representing a year-on-year increase of 0.01 percentage point which profit attributable to owners of the Company amounted to

compared with 0.88% in 2023. The overall investment in research RMB10.17 billion representing an increase of 23.51% as compared

and development of the Company remained stable as detailed to the same period in 2023 and profit margin attributable to owners

in the section “Investment in research and development” under of the Company was 3.58% representing an increase of 0.39

“Investments”. percentage point as compared to the same period in 2023 which

was mainly attributable to the Company’s continuous improvement

on the economies of scale and the pursuit of lean management to

constantly lower various expense ratios thereby enhancing the

Company’s efficiency.Year ended December 31

2024 2023 Change over the previous year

Profit for the year (RMB’000) 10218845 7911609 29.16%

Profit margin for the year 3.59% 3.06% Up by 0.53 percentage point

Profit attributable to owners of the Company (RMB’000) 10170427 8234493 23.51%

Profit margin attributable to owners of the Company 3.58% 3.19% Up by 0.39 percentage point

The net profit or loss for each of the Company’s operating segments is set forth below:

Year ended December 31

2024 2023 Change over the previous year

RMB’000 RMB’000

Express and freight delivery segment 10981266 8452862 29.91%

Intra-city on-demand delivery segment 132460 50595 161.80%

Supply chain and international segment -1324413 -534501 -147.78%

Undistributed units 395920 -86037 560.17%038 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Net profit of the express and freight delivery segment for 2024 Net profit of the undistributed units for 2024 amounted to

amounted to approximately RMB10.98 billion representing an approximately RMB0.40 billion mainly including segments of non-

increase of 29.91% as compared to the same period in 2023 principal logistics and freight forwarding such as industrial parks

mainly driven by (1) a steadfast commitment to sustainable and investment and other functional segments.healthy development focusing on high-quality business growth;

(2) continuous efforts to strengthen network integration optimize Non-IFRS Measures

lean resource management and streamline operations to achieve

structural cost reductions; and (3) fully leveraging the network’s To supplement the consolidated financial statements which are

economies of scale to enhance profitability. presented by the Company in accordance with IFRS the Company

also uses certain additional non-IFRS measures namely EBITDA

Net profit of the intra-city on-demand delivery segment for and EBITDA margin as additional financial metrics. These non-IFRS

2024 amounted to approximately RMB0.13 billion representing measures are not required by or presented in accordance with

an increase of 161.80% as compared to the same period in IFRS.

2023 and recording a doubled increase in net profit mainly

attributable to (1) accelerated growth in the revenue scale and The Company believes that these non-IFRS measures facilitate

order volume and sustained expansion of the network’s economies evaluation of its operating performance by eliminating potential

of scale; (2) optimization of business structure and continued impacts of certain items listed below. The Company also

increase in revenue contribution of high-quality customers; and believes that such non-IFRS measures present useful information

(3) the improvement in operation quality and efficiency driven by to investors in understanding and evaluating its consolidated

technological empowerment and lean management promoting results of operations in the same manner as they presented to its

the continuous enhancement of gross profit margins and expense management. However its presentation of such non-IFRS measures

ratios. may not be comparable to similarly titled measures presented

by other companies. The use of these non-IFRS measures has

Net loss of the supply chain and international segment for 2024 limitations as an analytical tool and you should not consider it

amounted to approximately RMB1.32 billion primarily due to on an isolated basis or as substitute for analysis of the results

increased short-term losses resulting from business adjustments of operations or financial condition of the Company as reported

following the organizational restructuring of the Group’s subsidiary under IFRS.KEX.The following table reconciles profit for the year of the Company

calculated and presented in accordance with IFRS to EBITDA

(non-IFRS measure) for the years indicated:

Year ended December 31

20242023

RMB’000 RMB’000

Profit for the year 10218845 7911609

Add:

Depreciation and amortization 17332257 17319107

– Depreciation of right-of-use assets 6798783 7213063

– Depreciation and amortization (excluding right-of-use assets) 10533474 10106044

Finance costs net 1755606 1636327

Income tax expense 3388416 2574896

EBITDA 32695124 29441939

EBITDA margin 11.50% 11.39%Annual Report 2024 S.F. Holding Co. Ltd. 039

Management Discussion and Analysis

039

Cash Flow

Year ended December 31

2024 2023 Change over the previous year

RMB’000 RMB’000

Net cash generated from operating activities 32186373 26569819 21.14%

Net cash used in investing activities -12054744 -13505617 10.74%

Net cash used in financing activities -27979113 -12994685 -115.31%

Net decrease/increase in cash and cash equivalents -7847484 69517 -11388.58%

Exchange gains on cash and cash equivalents 45231 98844 -54.24%

Cash and cash equivalents at the beginning of the year 40448308 40279947 0.42%

Cash and cash equivalents at the end of the year 32646055 40448308 -19.29%

Net cash generated from operating activities: In 2024 net cash generated from operating activities of the Group was RMB32.19 billion

representing an increase of 21.14% as compared to the same period in 2023 mainly due to the combined effect of the Group’s profit growth

and optimized operating cash flow management. Please refer to note 34(a) to the consolidated financial statements for a detailed explanation

of the difference between the Group’s net cash generated from operating activities and net profit in 2024.Net cash used in investing activities: In 2024 net cash used in investing activities of the Group was RMB12.05 billion representing a

decrease of 10.74% as compared to the same period in 2023 mainly attributable to the combined effect of the decrease in the Group’s

net cash outflow from purchasing property plant and equipment the decrease in net cash outflow from acquiring subsidiaries and other

investments and the increase in net cash outflow from purchasing structured deposits.Net cash used in financing activities: In 2024 net cash used in financing activities of the Group was RMB27.98 billion representing an

increase of 115.31% as compared to the same period in 2023 mainly attributable to the combined effect of the increase in net cash outflow

from borrowings the increase in net cash outflow from dividend distribution and net cash inflow from the proceeds from the Listing on the

Hong Kong Stock Exchange.040 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Assets and Liabilities

Changes in major items of assets and liabilities

As of December 31

Year-on-year

2024 2023 Amount changes

change in the

Percentage Percentage over the percentage

of total of total previous of total

Amount assets Amount assets year assets

RMB’000 RMB’000

Non-current assets

Property plant and equipment 59174305 27.67% 60104416 27.14% -1.55% 0.53%

Right-of-use assets 19625629 9.18% 20890047 9.43% -6.05% -0.25%

Investment properties 7241199 3.39% 6418720 2.90% 12.81% 0.49%

Investments in associates and joint ventures 6203642 2.90% 7378831 3.33% -15.93% -0.43%

Current assets

Inventories 2432383 1.14% 2440425 1.10% -0.33% 0.04%

Contract assets 2740820 1.28% 1632592 0.74% 67.88% 0.54%

Trade and note receivables 27981633 13.09% 25360433 11.45% 10.34% 1.64%

Financial assets at fair value through profit or 11246156 5.26% 6809742 3.07% 65.15% 2.19%

loss

Cash and cash equivalents 32646055 15.27% 40448308 18.26% -19.29% -2.99%

Non-current liabilities

Borrowings 26319260 12.31% 30396912 13.72% -13.41% -1.41%

Lease liabilities 7094483 3.32% 8038495 3.63% -11.74% -0.31%

Current liabilities

Trade and note payables 27395524 12.81% 24914300 11.25% 9.96% 1.56%

Contract liabilities 2039198 0.95% 1832018 0.83% 11.31% 0.12%

Borrowings 18365122 8.59% 22309103 10.07% -17.68% -1.48%

Lease liabilities 5501314 2.57% 5769965 2.61% -4.66% -0.04%

Equity

Treasury shares 758081 0.35% 2575532 1.16% -70.57% -0.81%

Contract assets: As of December 31 2024 the Group’s contract assets amounted to RMB2.74 billion representing an increase of 67.88%

as compared with the end of 2023 mainly due to the business growth of the Group.Financial assets at fair value through profit or loss: As of December 31 2024 the Group’s financial assets at fair value through profit or

loss amounted to RMB11.25 billion representing an increase of 65.15% as compared with the end of 2023 mainly due to the increase in

structured deposits.Borrowings: As of December 31 2024 the Group’s borrowings under non-current liabilities amounted to RMB26.32 billion representing a

decrease of 13.41% as compared with the end of 2023; the borrowings under current liabilities amounted to RMB18.37 billion representing

a decrease of 17.68% as compared with the end of 2023 mainly due to the repayment of borrowings.Treasury shares: As of December 31 2024 the treasury shares of the Group amounted to RMB758 million representing a decrease of

70.57% as compared with the end of 2023 mainly due to the cancellation of the Company’s repurchased shares.Annual Report 2024 S.F. Holding Co. Ltd. 041

Management Discussion and Analysis

041

Liquidity and Capital Structure

Sources and uses of funds

In 2024 the Group primarily raised funds required for its development through cash generated from operating activities issuance of shares

and bonds proceeds from external debts and other financing activities. The Group’s cash requirements are mainly used for daily operations

repayment of maturing liabilities capital expenditures payment of interest and dividends and other unexpected cash needs. The Group has

always adopted a prudent financial management policy maintaining sufficient and appropriate funds to meet the repayment of matured debts

capital expenditures and normal operations.As of December 31 2024 the total amount of cash and cash equivalents and wealth management products in the Group’s other financial

assets was RMB43.66 billion. For details of the Group’s cash flow data during the Reporting Period please refer to “Cash Flow” in “FinancialReview” in this section and note 34 to the consolidated financial statements in the Report.As of December 31

20242023

RMB’000 RMB’000

Cash and cash equivalents 32646055 40448308

Financial assets at fair value through profit or loss

– Structured deposits 11015904 6542881

Total 43661959 46991189

The free cash inflow of the Group in 2024 was RMB22.30 billion which was derived from net cash generated from operating activities of

RMB32.19 billion less capital expenditures (excluding equity investments) of RMB9.89 billion representing a year-on-year increase of 70.14%

as compared with the free cash inflow in 2023 of RMB13.11 billion. Looking forward the Group believes that it will be able to meet the liquidity

requirements of the Company by using the existing cash and cash equivalents cash generated from operating activities and financing activities.As of December 31 2024 the Group’s debt to asset ratio was 52.14% representing a decrease of 1.23 percentage points from 53.37%

at the end of 2023 and the overall capital structure remained stable. (Note: Debt to asset ratio is calculated by total liabilities dividing total

assets on the corresponding date)042 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Borrowings

As of December 31 2024 the Group’s short-term borrowings long-term borrowings corporate bonds short-term bonds and loans from

non-controlling interests amounted to RMB44.68 billion in aggregate which were mainly denominated in RMB HKD and USD with no significant

seasonal demand. Among which the aggregate amount of non-current corporate bonds with fixed interest rates amounted to approximately

RMB19.94 billion and the rest were carried at floating interest rates. Most of the bank borrowings are unsecured and the assets involved in

some of the secured borrowings are set out in “Limitation of asset rights” under “Assets and Liabilities” in “Financial Review” in this section.The Group did not have any borrowings that were past due during the Reporting Period. Please refer to note 26 to the consolidated financial

statements in the Report for details of the bank borrowings and other borrowings of the Group. The details are as follows:

As of December 31

20242023

RMB’000 RMB’000

Non-current: 26319260 30396912

Long-term bank borrowings 6186386 11355241

Corporate bonds 19941935 18794782

Loans from non-controlling interests 190939 246889

Current: 18365122 22309103

Current portion of long-term bank borrowings 1677715 2813385

Short-term bank borrowings 15118534 18765366

Short-term debentures 807787 –

Corporate bonds 627779 615295

Loans from non-controlling interests 133307 115057

Total 44684382 52706015

Limitation of asset rights

As of December 31 2024 the Group’s assets subject to restricted rights are mainly statutory reserve placed at the Central Bank and the

bank borrowing mortgage as set out below:

Closing book value Reasons for limitation

RMB’000

Restricted cash 1354303 Mainly statutory reserves in the Central Bank

Property plant and equipment 490886 Bank borrowing mortgage

Right-of-use assets 203922 Bank borrowing mortgage

Investment properties 111847 Bank borrowing mortgage

Total 2160958

External guarantees

As of December 31 2024 the Group provided guarantees of RMB951 million to investee companies (such amount was RMB946 million as

of December 31 2023).Contingent liabilities

As of December 31 2024 the Group did not have any material contingent liabilities.Annual Report 2024 S.F. Holding Co. Ltd. 043

Management Discussion and Analysis

043

Investments

Capital expenditures

Year ended December 31

2024 2023 Year-on-year change

RMB’000 RMB’000

Total investment amount 10714792 17524710 -38.86%

The amounts of the Group’s capital expenditure items during the Reporting Period are set out below:

Year ended

December 31 2024

RMB’000

Office and buildings 463150

Land 262306

Warehouse 1024636

Sorting center 3489292

Aircraft 2411185

Vehicle 801230

Information technology equipment 455857

Equity investments 826633

Others 980503

Total 10714792

The Company adhered to lean resource planning and better control over its investment efficiency which led to a year-on-year decrease in

the amounts of capital expenditure in 2024. In 2024 investments in fixed assets (i.e. investments other than equity investments) amounted

to RMB9.89 billion in aggregate representing a decrease of 26.56% compared to the same period in 2023 and accounted for 3.48% of the

revenue representing a decrease of 1.73 percentage points compared to the same period in 2023.Capital commitments

The Group’s capital commitments represent capital commitments contracted but not yet provided for that arise from established contractual

relationships the amounts of which are set out below:

As of December 31

20242023

RMB’000 RMB’000

Contracted but not provided for purchases of property plant and equipment 1515674 1858672

Investment to be paid 121043 131895

Others – 944

Total 1636717 1991511044 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

Investments in financial assets

Assets and liabilities measured at fair value

Gains and

losses from

changes in Accumulated Provision for Amount of Decreased

fair value fair value impairment purchase amount

in the changes in the in the in the

Opening Reporting included in Reporting Reporting Reporting Other Closing

Item balance Period equity Period Period Period changes(2) balance

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Financial assets 16889273 -82984 -1553885 – 4121474 -265393 847081 19955566

Current financial assets at

fair value through profit or

680974216492––4050575-19462456397111246156

loss (excluding derivative

financial assets)(1)

Other non-current financial assets 589996 -99476 – – 21114 -42595 8377 477416

at fair value through profit or

loss

Investments in other equity 9489535 – -1553885 – 49785 -28174 274733 8231994

instruments

Financial liabilities 92120 6927 3185 – – – 3232 105464

Notes:

(1) This item includes structured deposits that do not meet the principal-plus-interest contractual cash flow characteristics. These structured deposits

characterized by short maturities and high liquidity are presented on a net basis for the current period’s purchase and sale amounts. Except for

structured deposits all other items are presented separately with their respective purchase and sale amounts for the current period.

(2) Other changes in current financial assets at fair value through profit or loss are mainly income realized from matured structured deposits and other

changes in investments in other equity instruments are mainly due to exchange differences on translation of foreign currency financial statements.Investments in securities

Gains and

losses from Accumulated Decreased

Book value at changes in fair fair value Purchase amount Book value

Initial the beginning value during changes amount during during at the end of

investment of the Reporting the Reporting included in the Reporting the Reporting Other the Reporting

Security type Stock code Abbreviation of security cost Period Period equity Period Period changes Period

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Stocks 1519.HK J&T Express 1892944 2345581 – -1454140 – – 47690 939131

Stocks 300771.SZ Zhilai Sci And Tech 13670 72394 – -720 – -26872 1 44803

Stocks GB00BLH1QT30 Samarkand 28847 867 – -136 – – 22 753

Funds 180302.SZ China AMC-Shenzhen 49750 – – -1219 49750 – – 48531

International REIT

Total 1985211 2418842 – -1456215 49750 -26872 47713 1033218Annual Report 2024 S.F. Holding Co. Ltd. 045

Management Discussion and Analysis

045

Investments in derivatives

The amounts of the Group’s derivatives investments for hedging purpose during the Reporting Period are set out below:

Percentage

of investment

amount at

Gains and the end of

losses from the period to

changes in Accumulated Amount of net assets of

fair value fair value purchase Amount of Amount at the Company

Initial Amount at during the changes during the sales during the end of at the end of

Type of derivatives Investment the beginning Reporting included in Reporting the Reporting the Reporting the Reporting

investment amount of the period Period equity Period Period Period Period

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Forward foreign exchange 5839480 – 8991 8644 N/A N/A 5839480 6.35%

Total 5839480 – 8991 8644 N/A N/A 5839480 6.35%

During the Reporting Period there were no significant changes in the accounting policies and accounting principles of hedging of the Company

compared with the previous reporting period.Actual gains/losses during the Reporting Period: The actual gains/losses of derivatives investments refers to the change in fair value of derivative

financial instruments and the actual losses for the Reporting Period amounted to approximately RMB3.19 million.Hedging effects: The Company’s derivative investment business mainly consists of forward contracts purchased in this year with the underlying

asset being the exchange rate and the currency involving USD and HKD. The main elements are: operation of forward forex hedging for the

Company’s US dollar bonds which generates exchange losses on the US dollar bonds and gains on changes in the fair value of the forward

exchange contracts when the USD strengthens against the HKD. By utilizing the derivative transactions to lock in costs the impact of exchange

rate fluctuations on the Company’s profit was effectively reduced.Source of fund for the Company’s derivatives investment is mainly self-owned funds.Risk analysis and control measures for derivatives positions during the Reporting Period:

(I) Risk analysis

The foreign exchange hedging business is carried out by the Company based on the principles of legality prudence safety and effectiveness

and not for speculative purposes. All foreign exchange hedging transactions are derived from actual foreign currency business but certain

risks may exist in foreign exchange hedging transactions.

1. Market risk: The foreign exchange hedging business carried out by the Company and its holding subsidiaries mainly involves daily

international express international cargo and freight forwarding business and investment and financing activities denominated in foreign

currencies related to the main business. The associated market risk refers to losses which may arise from changes in price of foreign

exchange hedging products due to fluctuations in market prices of underlying exchange rates and interest rates.

2. Liquidity risk: Since all foreign exchange hedging business is conducted through financial institutions we are subject to the risk of having

to pay fees to banks caused by insufficient liquidity in the market.

3. Non-performance risk: The Company and its holding subsidiaries conduct foreign exchange hedging business mainly based on cash flow

rolling forecasts for risk management. We are subject to the risk that the actual cash flow deviates from forecast resulting in failure to

fulfil obligations under relevant hedging contracts when due.

4. Operational risks: In the course of business if the corresponding personnel fails to report and seek approval in accordance with the

prescribed procedures or fails to make records on foreign exchange hedging business accurately timely and completely losses may be

incurred. At the same time if the person concerned fails to fully understand the terms of the transaction contract and product information

we are exposed to related operational risks and transaction losses as a result.046 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

(II) Risk control measures value. The Company determines the fair value of the hedging

products in accordance with the transaction data provided

1. Clarify the criteria of initiating transaction of foreign exchange

by or obtained from the public domain including banks and

hedging product: All foreign exchange hedging businesses are

Reuters.derived from actual foreign currency business for the purpose

of averting and preventing exchange rate and interest rate risk. 5. Equipped with professional staff: The Company has maintained

No foreign exchange derivatives trading shall be carried out for a team of professionals with expertise in financial derivatives

speculative purposes. responsible for the Company’s exchange rate risk management

market analysis product research and the Company’s overall

2. Selection of products: Hedging products with simple structure

management policy recommendations etc.strong liquidity and manageable risk are selected to carry out

foreign exchange hedging business. 6. Establishing a comprehensive risk alarm and reporting

mechanism: The Company sets risk limits for foreign

3. Counterparty selection: The counterparties of the Company’s

exchange hedging business where transactions have been

foreign exchange hedging business are large state-owned

made timely evaluates changes in risk exposure and derived

commercial banks and international banks with sound

gains and losses and provides regular risk analysis report

operation good credit long history of cooperation with the

to the management and the Board of Directors. Appropriate

Company and good credit standing.risk assessment models or monitoring systems are used to

4. Determination of fair value of foreign exchange hedging continuously monitor and report various risks. More frequent

products: The foreign exchange hedging products operated reports are made when the market fluctuates drastically or

by the Company are mainly for the management of foreign when risks are higher. A response plan will be made promptly.exchange transactions in the predictable future period with

7. Separation of duties and personnel between the front end and

high market transparency and active trading; the transaction

back end is strictly implemented. Dealers cannot concurrently

price and settlement unit price of which can fully reflect their fair

hold the position as accounting personnel and vice versa.Investment in research and development

The Group’s total research and development investment (including research and development expenses and development expenditures) in

2024 amounted to RMB3.09 billion representing a decrease of 8.02% as compared with the corresponding period in 2023 and its proportion

to revenue was 1.09% representing a decrease of 0.21 percentage point as compared with that of the corresponding period in 2023. The

Company’s research and development investment mainly focused on digitalized and intelligent upgrading of logistic networks internally and

promoting the implementation of intelligent supply chain technology externally empowering the digitalized and intelligent improvement in

customers’ supply chains through technology and ultimately achieving lowering costs generating revenue and enhancing operating profits

for the Company. For details please refer to “Industry-leading Logistics Technology and Application Facilitating Intelligent Supply Chain” of

“Core Competitiveness” of this section.Year ended December 31

2024 2023 Change over the previous year

Research and development investment amount 3093713 3363294 -8.02%

(RMB’000)

Research and development investment as a percentage 1.09% 1.30% Decreased by

of revenue 0.21 percentage point

Amount of capitalized research and development 560106 1077980 -48.04%

investment (RMB’000)

Capitalized research and development investment as a 18.10% 32.05% Decreased by

percentage of research and development investment 13.95 percentage pointsAnnual Report 2024 S.F. Holding Co. Ltd. 047

Management Discussion and Analysis

047

Use of Proceeds

The Company was successfully listed on the Main Board of the Hong Kong Stock Exchange on November 27 2024. A total of 170000000

ordinary Shares with a par value of RMB1 per Share were successfully placed and issued at a price of HKD34.3 per share in the global offering

with an aggregate par value of RMB170000000. After deducting the underwriting commissions and other estimated expenses related to

the global offering the net proceeds from the share issuance in the global offering for the Company were approximately HKD5662 million

equivalent to approximately RMB5299 million at the exchange rate of HKD1.00 to RMB0.9358.For the year ended December 31 2024 the proceeds from the global offering were utilized in accordance with the planned uses and proportions

as stated in the prospectus. The details are as follows:

Planned use of proceeds As of December 31 2024

Expected timeline for the

Utilized Unutilized utilization of the unutilized

Percentage Amount amount amount amount

RMB’000 RMB’000 RMB’000

Strengthening international and cross-border 45% 2384395 – 2384395 On or before the end of 2026

logistics capabilities

Strengthening and optimizing logistics network 35% 1854529 324410 1530119 On or before the end of 2026

and service offerings in China

Research and development of advanced 10% 529866 1572 528294 On or before the end of 2026

technologies and digital solutions to upgrade

supply chain and logistics services and

implement ESG-related initiatives

Working capital and general corporate 10% 529866 529866 – On or before the end of 2026

purposes

Total 100% 5298656 855848 4442808

Significant Investments Acquisitions and Disposals

The Group did not make any significant investments acquisitions and disposals of equity interests in subsidiaries or investee companies or

any significant investments and disposals of non-equity assets for the year ended December 31 2024.Future Plans for Significant Investments and Capital Assets

As of December 31 2024 the Group did not have any significant investment and capital asset plans.048 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

ESG SF also continues to refine carbon data standardization and

precision management. The company has independently developed

SF is committed to integrating corporate value with social the Fenghe Sustainability Platform an end-to-end logistics carbon

value ensuring a balance between business growth and footprint management system which has obtained ISO 14064

social responsibility. As a company with a strong sense of certification and in 2024 received the ISO 14083 global logistics

social responsibilities SF adheres to a sustainable and healthy carbon accounting standard certification. As the first digital carbon

development strategy continuously advancing smart efficient management platform in the industry to achieve shipment-level

and eco-friendly supply chains to enhance the efficiency and carbon footprint tracking the platform enables precise calculation

cost-effectiveness of logistics. At the same time the Company of greenhouse gas emissions and reductions across the entire

actively supports customer empowerment environmental logistics process – including collection transfer transportation

protection employee well-being and philanthropic initiatives and delivery. This transparency in data not only helps clients reduce

fulfilling its corporate social responsibilities and demonstrating a compliance costs and climate risks but also significantly enhances

strong commitment to social responsibility and leadership. green low-carbon supply chain operations. As of the end of the

Reporting Period over 60 globally renowned clients have utilized

In response to natural disasters in Hainan in 2024 SF quickly the Fenghe Sustainability Platform for carbon emission monitoring.mobilized resources launching emergency cargo flights to the

affected areas. Leveraging its extensive logistics network and The Company’s ESG practices achieved constant recognition by the

rapid-response capabilities the Company swiftly delivered industry. The Company’s MSCI ESG rating is BBB being the first

relief supplies to disaster-stricken regions providing essential in China’s express delivery logistics industry and is rated as low

life-supporting assistance to affected communities. risk by the Sustainalytics ESG rating which is the best rating in the

global express delivery logistics industry. The Company has been

For environment protection the Company incorporated climate honorably selected into the list of ESG influence in China issued by

change responses into its business management practices. The Fortune for three consecutive years (2022-2024) making it the only

Company achieved low-carbon management covering the entire selected express delivery logistics company in China.logistics chain through measures including the promotion of

low-carbon transportation construction of green industrial parks Looking ahead the Company will continuously adhere to

development of sustainable packaging and application of green long-termism as well as the sustainable and healthy development

technologies. As of the end of the Reporting Period the Company contribute to the establishment of a green and low-carbon supply

has utilized over 40000 new energy vehicles for transportation chain ecosystem improve employee benefits and care fulfil

covering 253 cities; completed construction of roof photovoltaic its social responsibilities and is committed to becoming the

power stations in 24 industrial parks with an annual renewable benchmark enterprise that consistently generates outstanding

energy generation exceeding 70 million kWh and a clean energy social value and delivers enduring impulses for the sustainable

utilization exceeding 42 million kWh; reduced the use of raw paper development around the world.by approximately 42 thousand tons and plastic by approximately For details of the environmental social and corporate governance

155 thousand tons through the implementation of green and content please refer to the 2024 SF Holding Sustainability Report

minimum packaging; innovatively developed recyclable packaging published by the Company on the website of the Hong Kong Stock

containers to provide customer with recyclable packaging solutions Exchange (www.hkexnews.hk) on March 28 2025.and deployed total of 19.18 million recyclable packaging containers

with an aggregate reuse exceeding 1 billion times and reducing the

greenhouse gas emissions exceeding 472 thousand tons.Annual Report 2024 S.F. Holding Co. Ltd. 049

Management Discussion and Analysis

049

Prospects for Future Development Acceleration of International Expansion for Chinese Logistics

Enterprises: Chinese companies are rapidly expanding their

international presence moving beyond traditional markets in Europe

Industry Trends and North America and actively exploring Southeast Asia Africa

and Latin America to unlock new growth opportunities. Many

The global economic landscape remains complex and volatile manufacturers are relocating production facilities to lower-cost

yet China’s economy is expected to maintain high-quality countries while brands are establishing overseas sales channels

and steady growth. According to the latest forecast by the to tap emerging consumer markets. At the same time the rise of

International Monetary Fund (IMF) the global economic growth is cross-border e-commerce is propelling Chinese products onto the

forecasted at 3.2% in 2025 a slight downward adjustment from global stage with leading e-commerce platforms and numerous

earlier estimates. While advanced economies are expected to lag SMEs leveraging cross-border e-commerce channels to penetrate

behind the global average China and several emerging economies international markets. In the face of volatile international trade

in Asia will continue to exhibit strong development momentum. As policies and rising tariff barriers global supply chain restructuring

a pivotal driver of global economic growth China’s GDP target for will accelerate. The ongoing wave of Chinese companies expanding

2025 is projected to grow around 5% demonstrating its economic abroad is driving increased demand for cross-border logistics and

resilience. In response to the challenging global landscape supply chain services requiring logistics enterprises to provide

China’s fiscal policies are expected to be more proactive focusing international transportation warehousing customs clearance and

on expanding domestic demand unlocking market potential integrated supply chain solutions. To support global expansion

advancing technological innovation strengthening self-sufficiency Chinese logistics companies are accelerating the development

and upgrading industries. Additionally the government will advance of global logistics networks establishing overseas warehouses

high-level opening-up policies to deepen international economic and distribution centers integrating multiple transportation modes

cooperation and trade. Entering a new phase of high-quality (including sea air and rail) and enhancing customs clearance

development China will continue to serve as the world’s foremost capabilities. These efforts are crucial in enhancing service quality

engine of economic growth. and securing a competitive position in the international market.China’s Structural Growth Opportunities in Logistics: The Technological Advancements Driving Logistics Efficiency: The

stimulation of domestic demand and industrial upgrades in China rapid advancement of smart technologies is set to revolutionize

will create structural growth opportunities in the logistics sector. In the logistics industry ushering in a new era of automation

2025 the government is expected to broaden and intensify subsidy and intelligence. As technological development accelerates

policies covering more industries and product categories while and deployment costs decrease the industry will shift from

raising subsidy ratios. These measures will effectively stimulate labor-intensive operations to technology-driven efficiencies.consumer demand drive industrial development and consequently Logistics infrastructure will undergo a complete transformation

accelerate growth in e-commerce logistics urban delivery with fully automated warehouses autonomous driving unmanned

large-item logistics and reverse logistics. According to projections sorting centers and robotic last-mile delivery solutions becoming

from the State Post Bureau China’s express delivery industry is increasingly widespread. The traditional logistics platform is evolving

expected to handle 190 billion parcels in 2025 with express delivery from a standalone operational hub into a real-time digital command

revenue surpassing RMB1.5 trillion representing an annual growth center powered by advanced algorithms that offer full visibility and

rate of approximately 8%. Meanwhile policy support and logistics control across the entire supply chain. With the integration of big

infrastructure improvements are fueling the expansion of rural data machine learning and AI-driven decision-making logistics

e-commerce leading to increased demand for cold chain logistics service providers can achieve accurate volume demand forecasting

warehousing and distribution services as agricultural products dynamic route planning optimized warehouse networks and

are shipped to urban markets. Additionally the inflow of industrial intelligent inventory management. These technological innovations

goods into rural areas is driving rapid growth in last-mile logistics will fundamentally reshape the logistics industry significantly

for lower-tier markets. As China’s industrial landscape upgrades enhancing efficiency reducing costs and improving customer

high-end manufacturing sectors such as electronic information experience. The sector is moving toward a future defined by

biopharmaceuticals and new energy will experience a surge in intelligence high efficiency and sustainability where automation

logistics demand particularly for high-precision and time-sensitive and data-driven operations will become the new standard.services. The shift towards personalized and customized production

models will also require logistics providers to offer more flexible and

tailored solutions to meet the diverse needs of different industries.050 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

The Company’s Strategic Vision “The One In Asia”. Concurrently it will enhance the density of

its logistics network within Asia and between Asia and the rest

The Company is accelerating its penetration into the supply of the world leveraging the Ezhou cargo hub and domestic and

chains of customers across major industries and expanding international infrastructure to increase resource allocation flexibility

its market share to drive scaled growth. As industries undergo and improve global and cross-border service capabilities. To

upgrades and transformation amid increasingly complex market strengthen its international competitiveness the Company will

competition customer demands are becoming more diverse and pursue a diversified strategy that includes mergers and acquisitions

comprehensive. Rather than focusing solely on cost reduction for strategic investments and partnerships to fill key resource gaps and

single logistics processes an increasing number of customers are enhance capabilities. As global trade uncertainties rise and supply

prioritizing holistic supply chain optimization efficient omnichannel chain restructuring accelerates the Company will leverage its

fulfillment and the digitalization intelligence and sustainability of comprehensive logistics solutions international network integration

supply chains. For express logistics companies homogeneous and robust risk management capabilities to help customers build

products and price competition alone are not viable for long-term resilient and efficient global supply chains enabling them to

sustainable growth. With a comprehensive product and service navigate challenges in international business operations.portfolio leading logistics technology capabilities and extensive

expertise in deploying supply chains for top-tier industry clients Building a Digitalized Supply Chain Ecosystem through

the Company continues to refine standardized service capabilities Technological Leadership: With its cutting-edge technological

tailored to specific industries and business scenarios. This enables capabilities and continuous innovation the Company is committed

the development of customized scalable logistics solutions that can to establishing a digital supply chain ecosystems. The Company’s

be rapidly implemented and replicated across mid-sized enterprises efforts will focus on end-to-end digital transformation across

in different sectors. In the future the Company will continue to logistics networks improving automation levels and operational

expand its presence in various industry verticals identify new supply efficiency. Leveraging SF Smart Brain the Company will promote

chain scenarios and convert emerging business opportunities. digital transformation among the whole chain of collection transit

By deepening its penetration from top-tier to mid-sized industry and delivery and comprehensively enhance the intelligence of

customers the Company aims to expand its logistics market share the Company’s logistics network. Supported by the Company’s

across different industries driving sustained business growth at rich supply chain service experience and domain-specific insights

scale. in multiple industries combined with advanced data prediction

algorithms application of visualization monitoring and early warning

Further developing globalization enhancing the connection systems the Company will strive in achieving intelligent route

between Asia and the world and offering one-stop solutions. planning and scheduling in the whole field as well as the dynamic

The Company is committed to becoming “The One in Asia” and optimal allocation of resources and facilities. Furthermore the

and connecting the world with end-to-end integrated logistics Company is intensifying its investment in emerging technologies

service across diversified scenarios. It strives to be the go-to such as IoT blockchain cloud computing AI-driven models

logistics partner for the global expansion of China’s enterprises and automation technologies to deliver comprehensive solutions

meeting the diverse needs of cross-border supply chains and for complex logistics scenarios. By continuously enhancing its

cross-border e-commerce. In key Asian markets the Company technological edge the Company will not only strengthen its

will build comprehensive service capabilities covering international competitive positioning but also advance the digital transformation

express delivery freight forwarding supply chain management of the entire logistics and supply chain industry.and last-mile logistics to achieve its strategic goal of beingAnnual Report 2024 S.F. Holding Co. Ltd. 051

Management Discussion and Analysis

051

Business Plan in 2025 Freight Strategy: For B2B production scenarios the Company

will expand its sales force strengthen customer relationship

Industry-Specific Strategy: To rapidly expand logistics market management and implement incentive mechanisms to drive lead

share across various industries the Company will implement generation and business conversion. Additionally by straightening

three key initiatives: organizational upgrades strategy iteration out the routes optimizing freight consolidation models and

and capability enhancement. In terms of organizational upgrades expanding air freight utilization the Company will enhance service

the Company will establish industry business units to strengthen efficiency and pricing competitiveness for industrial freight solutions.organizational capacity with each region formulating and executing For B2C life scenarios the Company will build integrated warehouse

development paths tailored to its local market. For strategy and distribution capabilities optimize line-haul routes and last-mile

iteration the Company will focus on deepening engagement with delivery models and enhance delivery installation and reverse

key industry clients enhancing core service capabilities and logistics services (including returns and recycling solutions). By

iterating logistics service packages accelerating adoption among deepening service capabilities and improving cost efficiency the

mid-sized enterprises to achieve a multi-dimensional strategy Company aims to enhance its competitive positioning in the B2C

upgrade. In capability enhancement the Company will strengthen logistics market.warehousing infrastructure flexible resource allocation operational

security measures and talent development programs ensuring the Cold Chain and Pharmaceutical Logistics Strategy: In terms

Company’s long-term competitive edge. of fresh and seasonal food delivery the Company will adopt a

multi-pronged approach by building regional agricultural brands

Time-Definite Express Strategy: The Company will position developing customized packaging leveraging technology for

SF Express as the flagship high-end express service solidifying efficiency investing in automation and utilizing livestreaming to

its reputation for premium time-definite delivery. By expanding expand sales and marketing efforts all aimed at accelerating

high-speed rail and same-day air freight routes the Company will growth in fresh and seasonal food delivery business. In terms of

densify its same-day delivery network coverage. The Company will food cold chain the Company will focus on developing its service

also secure priority access to high-quality air cargo capacity expand capabilities in integrated warehousing and distribution oversized

its sales force and intensify sales incentives and continuously items B2C delivery store delivery and cross-border cold chain.enhance operational capabilities and regulatory compliance to In terms of pharmaceutical logistics the Company will continue to

widen the range of air-transportable goods. The expansion of build a compliant lean and professional service network in the

large-item air freight will remain a key focus area. The Company will field of precise temperature control benchmark against peers to

also deepen penetration across multiple sales channels leveraging continuously optimize internal resources and costs and expand

differentiated resource allocation and evolving business models business scale. In terms of warehousing it will innovate and expand

to enhance market competitiveness. Additionally by increasing various modes of flexible warehousing resources including external

investments in lower-tier cities and adopting flexible external cooperation warehouses and warehousing operations to develop

collaboration models the Company aims to accelerate network pharmaceutical warehousing and distribution business.expansion and gain market share in lower-tier markets.Intra-city On-demand Delivery Strategy: Adhering to “high-qualityEconomy Express Strategy: The Company will focus on structural and sustainable growth” the Company embraces the continuous

cost reduction in its economy express service by innovating penetration of third-party on-demand delivery services under

operational processes optimizing transportation models and opportunities including traffic diversification local retail development

enhancing last-mile delivery methods. Through cost efficiencies and and accelerated intra-city logistics and continuously dedicates

an incentivized sales model the Company will stimulate frontline to scaling up full-scenario coverage premium services and

sales engagement and market competitiveness exploring growth strengthened network. Additionally the Company will extend

potential in lower-tier markets and capturing additional economy the boundaries of real-time logistics fulfillment accelerate

express market share. the deployment of automation and AI-driven innovations and

collaborate with more strategic partners to support the growth of052 S.F. Holding Co. Ltd. Annual Report 2024

Management Discussion and Analysis

new consumption models. By doing so the Company will enhance operational costs and improve business competitiveness.its ability to provide seamless urban logistics solutions contributing

In terms of the transit the Company will accelerate the integration

to a more convenient and efficient lifestyle for consumers.of sorting centers to enhance scale effect; build unmanned

Supply Chain and International Business Strategy: The container sorting centers to meet the needs of parcel flow between

Company will seize opportunities presented by China’s expanding economic circles; adhere to the customer-centered approach

global presence actively focusing on cross-border supply chain deepen the independent operation of transfer stations and through

solutions and international e-commerce logistics. The goal is technological innovations workflow improvements and operational

to strengthen end-to-end integrated solutions and enhance refinements fully expand the functions of sorting centers and

competitiveness in international express overseas warehousing enhance transit benefits. In terms of the transportation the

and integrated warehousing and distribution services. In Asia Company will continue to refine transfer models and route planning

the Company will align with each country’s key industries and increase direct shipping routes improve city-to-city connectivity

major Chinese enterprises expanding overseas by reinforcing and deploy larger transport vehicles. It will also strategically open

self-operated resources and capabilities in both cross-border and new routes and optimize spare-cabin sales increase round-trip

localized logistics. The Company will develop customized supply route utilization and expand self-operated fleet deployments.chain solutions tailored to client needs driving the successful Additionally the Company will scale up the adoption of the Ezhou

implementation of more overseas supply chain projects. In Europe cargo hub’s ground-network transfer model enabling northward

and North America with a focus on cross-border e-commerce the shipment consolidation which will boost efficiency and reduce

Company will expand its overseas warehouse network and optimize costs in the ground transportation network. In terms of last-mile

partnerships with external service providers. By developing a delivery the Company will continue to streamline operations

diverse portfolio of products the Company aims to meet customer through workforce model optimization smart technology adoption

expectations for service quality and cost-effectiveness further and direct dispatch between sorting centers and final delivery

enhancing its market competitiveness. zones. This will reduce costs while improving operational efficiency;

furthermore the Company will enhance courier satisfaction and

Network Development Strategy: The Company will continue its

engagement by taking measures in seven key dimensions: income

customer-centric approach optimizing the logistics network by

growth operational efficiency workload reduction fairness

implementing lean operations including network restructuring

recognition emotional well-being and career development. By

node simplification process optimization and model diversification.improving employee satisfaction the Company will ultimately

These initiatives will enhance end-to-end network efficiency lower

enhance service quality and customer satisfaction.Annual Report 2024 S.F. Holding Co. Ltd. 053

Directors Supervisors and Senior Management

Executive Directors officer and chief human resources officer of the Company from

January 2022 to January 2024 and has been the assistant chief

executive officer and chief strategy officer of the Company since

Mr. Wang Wei January 2024. She was appointed as a Director since December

2022 and was re-designated as an executive Director in August

Mr. Wang Wei aged 54 is the founder de facto controller of 2023. Ms. Wang has also been a director and the chairman of the

the Company and was appointed as chairman of the board board of directors of KEX (KEX.BK) since May 2024.executive Director general manager and chief executive officer of

the Company. Mr. Wang has also been the chairman of the board

of directors and a non-executive director of KLN (0636.HK) since Mr. Xu Bensong

October 2021. Mr. Xu Bensong aged 39 obtained a master’s degree in Business

Administration from Sichuan University and an executive master

Mr. Ho Chit of Business Administration (EMBA) degree from Peking University.Mr. Xu joined the Group in 2007 and successively held various

Mr. Ho Chit aged 50 graduated from the University of Hong positions including the operation manager of Yunnan district

Kong and Tsinghua University. He is a certified public accountant senior operation manager of Sichuan district general manager of

of Hong Kong and an American certified public accountant with Chongqing district head of Group sales center general manager

extensive experience in financial management corporate finance of Beijing district and assistant chief operating officer. He has

auditing and business management. Mr. Ho was a senior manager been chief marketing officer of the Company since May 2024. Mr.in the auditing and advisory division of Arthur Andersen and Xu serves as an executive Director of the Company since October

PricewaterhouseCoopers from 1997 to 2005 the senior financial 2024.director of Sohu.com Limited (SOHU.US) from 2005 to 2008

the chief financial officer of Changyou.com Limited (CYOU.US)

from 2009 to 2014 the chief executive officer of Fox Financial Independent Non-Executive Directors

Technology Group Limited from 2014 to 2021. He has been a

deputy general manager and the head of finance of the Company

since September 2021. Mr. Ho was appointed as a Director of the Mr. Chan Charles Sheung Wai

Company in November 2021 and was re-designated as an executive Mr. Chan Charles Sheung Wai aged 71 graduated from the

Director in August 2023. Mr. Ho served as a non-executive director University of Manitoba Canada. Mr Chan is a member of both

of KLN (0636.HK) from October 2021 to August 2024 and as an the Chartered Professional Accountants of Canada and the Hong

executive director and chief strategy officer since September 2024. Kong Institute of Certified Public Accountants. Mr. Chan has various

Mr. Ho has been a non-executive director and the chairman of experience in auditing finance and risk management. He was an

the board of directors of SF REIT Asset Management Limited (the audit partner of Mainland China & Hong Kong office of Arthur

manager of SF REIT (2191.HK)) respectively since April 2022 and Andersen a managing partner of audit department of Mainland

August 2023. China & Hong Kong office of PricewaterhouseCoopers and a senior

managing director of Protiviti (a risk management and consulting

Ms. Wang Xin firm). Mr. Chan was also a member of the Listing Committee of

the Hong Kong Stock Exchange and a member of the Election

Ms. Wang Xin aged 52 obtained a master’s degree in Business Committee for the first Legislative Council of Hong Kong. He was

Administration from China Europe International Business School an independent non-executive director of CITIC SEC (600030.SH

(CEIBS). Ms. Wang was the senior project manager and the 6030.HK) and Bio-heart (2185.HK). Mr. Chan is currently serving

associate partner of Mercer Management Consulting (now named as an independent non-executive director of Maoyan Entertainment

Oliver Wyman) from 2000 to 2008 a director of A.T. Kearney (1896.HK) Hansoh PHARMA (3692.HK) and Sun Art Retail (6808.(Shanghai) Management Consulting Co. Ltd. from 2008 to 2011 HK). Mr. Chan was appointed as an independent non-executive

and a senior partner of Roland Berger Enterprise Management from Director in December 2022.

2011 to 2021. Ms. Wang served as the assistant chief executive054 S.F. Holding Co. Ltd. Annual Report 2024

Directors Supervisors and Senior Management

Mr. Lee Carmelo Ka Sze Supervisors

Mr. Lee Carmelo Ka Sze aged 64 obtained a bachelor’s degree

and master’s degree in Laws from the University of Hong Kong. Mr. Ms. Li Juhua

Lee is qualified as a solicitor in Hong Kong England and Wales

Singapore and the Australian Capital Territory. Mr. Lee has rich Ms. Li Juhua aged 45 obtained a bachelor’s degree in

legal experience and has been a partner and senior partner of Management from Tongji University is a Senior Certified Public

Woo Kwan Lee & Lo since 1989 and its Managing Partner since Accountant in Australia a Fellow of the Chartered Management

2022. Mr. Lee is also a member of the Campaign Committee of Accountants and the Chartered Global Management Accountant.

the Community Chest of Hong Kong and the co-chairman of the Ms. Li was an accountant and finance manager of Shanghai Totole

Community Chest Corporate Challenge Half Marathon Organising Flavoring Food Co. Ltd. under Nestlé from 2002 to 2004 an

Committee. Mr. Lee had been a committee member of HKSAR assistant accountant and an assistant finance manager of Wal-Mart

InnoHK Steering Committee of the Innovation and Technology China’s headquarter from 2004 to 2008 a finance manager of B&Q

Commission of Hong Kong the chairman of the Appeal Tribunal Shenzhen from 2008 to 2010 and the financial director of Maoye

Panel (Buildings) one of the members of chairmen pool of the International (0848.HK) from 2011 to 2012. Ms. Li successively held

Listing Review Committee of the Hong Kong Stock Exchange various key positions within the Group from May 2012 to December

chairman of the Listing Committee of the Hong Kong Stock 2023 including the head of accounting department head of tax

Exchange and an independent non-executive director of KWG department head of financial shared service center and head of

Group (1813.HK). Mr. Lee is currently serving as an independent CFO office. She has also been assistant CFO of the Company

non-executive director of China Mobile (600941.SH 0941.HK) and a since January 2024. She has been a non-executive director of SF

non-executive director of Safety Godown (0237.HK) and Playmates REIT Asset Management Limited (the manager of SF REIT (2191.

(0635.HK). Mr. Lee serves as an independent non-executive HK)) from August 2023 to April 2024. She is also a non-executive

Director of the Company since December 2022. director of SF Intra-city (9699.HK) since November 2023. Ms. Li

is an employee representative Supervisor of the Company since

December 2019.Dr. Ding Yi

Dr. Ding Yi aged 60 Ph.D. in Economics of Renmin University of Mr. Liu Jilu

China and Senior Economist has extensive experience in financial

management and served as a lecturer at the School of Finance Mr. Liu Jilu aged 78 graduated from Anhui University and

of Renmin University of China the deputy general manager of the specialized his studies in Economics and Management. Mr. Liu was

investment management department of PICC Group (601319.SH the person in charge of Ma’anshan Dingtai Metal Products Co. Ltd.*

1339.HK) a director and the assistant general manager of PICC (馬鞍山市鼎泰金屬製品公司) the chairman and general manager of

Asset Management Company Limited* (中國人保資產管理有限公 Ma’anshan Dingtai Technology Co. Ltd.* (馬鞍山市鼎泰科技有限責

司) the general manager and chairwoman of Huaneng Capital 任公司) and Ma’anshan Dingtai Rare Earth New Materials Co. Ltd.*

Services Corporation Ltd. (華能資本服務有限公司) the chairwoman (馬鞍山鼎泰稀土新材料股份有限公司) from 1994 to 2016. Mr. Liu is

of Invesco Great Wall Fund Management Company Limited* (景順長 a Supervisor of the Company since December 2016.城基金管理有限公司). Dr. Ding has been a director of Tongwei Co.Ltd. (通威股份有限公司) (600438.SH) and independent director of Ms. Wang Jia

Hua Xia Bank Co. Limited* (華夏銀行股份有限公司) (600015.SH)

and Huatai Asset Management Company Limited* (華泰資產管理有 Ms. Wang Jia aged 45 graduated from Shenzhen University with

限公司). Dr. Ding serves as an independent non-executive Director a bachelor’s degree in Economics. She worked at Deloitte Touche

of the Company since December 2022. Tohmatsu Certified Public Accountants LLP Shenzhen Branch from

2002 to 2006. She also worked at Ernst & Young (China) Advisory

Limited Shenzhen Branch from 2007 to 2014. Ms. Wang joined the

Group in 2014 and she successively held various positions within

the Group including the financial planning expert and the head of

internal control and is now the head of risk control and compliance.Ms. Wang is a Supervisor of the Company since April 2021.Annual Report 2024 S.F. Holding Co. Ltd. 055

Directors Supervisors and Senior Management

055

Mr. Zhang Shun Mr. Zhou Haiqiang

Mr. Zhang Shun aged 33 obtained his master’s degree in Mr. Zhou Haiqiang aged 47 joined the Group in 2001 and

Economics from Sun Yat-sen University. He joined the Group in successively held various positions including senior manager

2015 and successively held various positions including procurement of general affairs department of East China region operation

management senior coordinator operation management senior headquarter general manager of Hangzhou region deputy

coordinator the head of culture and employee relations division and president of e-commerce logistics business unit assistant chief

the assistant head of S.F. Express business region and is now the human resources officer and head of Shanghai operations. Mr.head of government affairs section of the public affairs department Zhou has been an assistant chief executive officer of the Company

of the Group. Mr. Zhang is an employee representative Supervisor since November 2020 the chief human resources officer of the

of the Company since December 2022. Company since November 2024 and a deputy general manager of

the Company since December 2022.Senior Management

Mr. Geng Yankun

Mr. Wang Wei is the chairman of the Board our executive Director

Mr. Geng Yankun aged 39 graduated from Harbin Institute

and general manager. For details of the biography of Mr. Wang Wei

of Technology and Peking University with a master’s degree in

please refer to the section headed “Executive Directors”.Engineering. After graduating in 2009 he joined Baidu and was

Mr. Ho Chit is our executive Director deputy general manager and successively responsible for the technical R&D and management

head of finance. For details of the biography of Mr. Ho Chit please of Baidu Wiki Baidu Knows Baidu Travel and Baidu LBS etc.refer to the section headed “Executive Directors”. He was the chief technology officer of Beijing Xiaodu Information

and Technology Co. Ltd.* (北京小度信息科技有限公司) from

Mr. Li Sheng 2015 to 2017. He joined the Group in 2017 and currently holds

various positions within Group including the chief information

Mr. Li Sheng aged 58 obtained his bachelor of laws from Sichuan and technology officer of the Company the chairman and chief

Normal University. He served as a senior regional manager from executive officer of SF Technology Co. Ltd. and Beijing S.F. Intra-

1998 to 2005 at Wal-Mart China. He joined the Group in 2005 and city Technology Co. Ltd. and is responsible for the technology

successively held various positions including general manager of R&D and relevant management. He has been served as the deputy

Hubei region general manager of Sichuan region vice president of general manager of the Company since December 2022 and as a

the Group president of Central China operation and president of non-executive director of SF Intra-city (9699.HK) since September

West China operation and is currently president and chairman of 2023.SF Airlines Company Limited. Mr. Li has been a director of the SF

Foundation since October 2016 and an assistant chief executive Ms. Gan Ling

officer of the Company since May 2024. He has been a deputy

general manager of the Company since December 2016. Ms. Gan Ling aged 50 obtained a master’s degree in Business

Administration from The University of Texas at Austin in the

United States of America and an executive master of Business

Administration (EMBA) degree from PBCSF Tsinghua University.She has extensive experience in equity investment public listing and

corporate finance. Ms. Gan was an analyst at Coatue Management

LLC one of the Tiger cub funds in New York from 2006 to 2010

the deputy general manager of Maoye International (0848.HK)

from 2010 to 2015. She has been a member of the Appeal Review

Committee of the Shenzhen Stock Exchange. She joined the

Group in 2015 and serves as a deputy general manager and the

secretary of the board of directors of the Company since 2016 a

joint company secretary of the Company since October 2024 and

a non-executive director of SF REIT Asset Management Limited (the

manager of SF REIT (2191.HK)) since 2022.056 S.F. Holding Co. Ltd. Annual Report 2024

Corporate Governance Report

The Board is pleased to present the Corporate Governance Report The Company will continue to review and monitor its corporate

contained in the Company’s annual report for the year ended governance practices to ensure compliance with the CG Code. Key

December 31 2024. corporate governance principles and practices of the Company are

summarized below.Corporate Governance Practices

Responsibilities Accountabilities and

The Board recognizes the importance of good corporate governance Contributions of the Board

to the Company’s healthy growth and has devoted considerable

efforts to formulating and implementing corporate governance The Board established the Company’s purpose values and strategy

practices appropriate to the Company’s needs. The Company has and ensures they are consistent with the Company’s culture. The

adopted the principles and code provisions of the CG Code as the Board is responsible for performing corporate governance duties

basis of the Company’s corporate governance practices. including formulating and reviewing corporate governance policies

As the Company has only been listed on the Hong Kong Stock and practices reviewing and monitoring the training and continuous

Exchange since November 27 2024 the CG Code was not professional development of directors and senior management

applicable to the Company during the period preceding such reviewing the Company’s policies and practices for compliance

date. During the Relevant Period and up to the date of this report with legal and regulatory requirements formulating reviewing and

the Company has complied with all applicable principles of good monitoring the implementation of code of conduct and compliance

corporate governance and code provisions of the CG Code save manual applicable to employees and directors and monitoring

and except in respect of code provision C.2.1 of Part 2 of the CG the Company’s compliance with the CG Code and reviewing the

Code which requires that the roles of chairman and chief executive Corporate Governance Report.should be separate and should not be performed by the same The Board places a strong emphasis on corporate governance and

individual. compliance as integral components of the Company’s corporate

values and culture. The Board is committed to maintaining integrity

Chairman and General Manager transparency and accountability in the Group’s daily business

operation and governance. By fostering a culture of ethical conduct

Mr. Wang Wei is the chairman of the Board and the general and regulatory adherence the Company ensures that its business

manager (same nature as chief executive) of the Company. Since practices not only meet but exceed industry standards thereby

Mr. Wang has been operating and managing the main operating reinforcing the trust and confidence of its stakeholders.subsidiary of the Company since incorporation of the Group the

Board is of the view that it is in the best interest of the Group to Direction and control of Company business are vested in the

have Mr. Wang taking up both roles for effective management and Board. The Board establishes policies strategies and plans for the

business development of the Group and Mr. Wang will provide a development of the Company’s business and provides leadership

strong and consistent leadership to the Group. This arrangement in the creation of value for Shareholders. All Directors have carried

ensures a more effective and efficient overall strategic planning of out their duties in good faith have been in compliance with

the Group as this structure enables the Company to make and applicable laws and regulations have taken decisions objectively

implement decisions promptly and effectively. Further the Company and have acted in the interests of the Company and its shareholders

has put in place an appropriate check-and-balance mechanism at all times. The Directors shall disclose to the Company details of

through the Board including three independent non-executive other offices held by them.Directors. Therefore the Board considers that the balance of

The Board takes responsibility for all major matters of the Company

power and authority of the present arrangement will not be

including approval and monitoring of all policy matters overall

impaired because such arrangement would not result in excessive

strategies material transactions appointment of general manager

concentration of power in one individual which could adversely

board secretary and other senior management members and other

affect the interest of minority Shareholders.significant financial and operational matters.Annual Report 2024 S.F. Holding Co. Ltd. 057

Corporate Governance Report

057

The day-to-day management administration and operation of the The Company has feasible and effective mechanisms to ensure

Company are led by the Board and senior management of the independent views and input are available to the Board. All

Company. The Board has delegated a schedule of responsibilities Directors have timely access to all relevant information as well

to the management for implementing Board decisions and directing as the advice and services of the joint company secretaries and

and coordinating the daily operation and management of the senior management of the Company with a view to ensuring that

Company. The Board reviews the delegated functions and work Board procedures and all applicable laws and regulations are

tasks regularly. The management has to obtain Board approval followed. Any Director may seek independent professional advice

prior to entering into any significant transactions. in appropriate circumstances at the Company’s expenses upon

If a Director Supervisor general manager or other senior reasonable request made to the Board. During the period from the

management member has a potential material conflict of interest H Shares Listing Date and up to the date of the Report the Board

in a matter to be considered by the Board (other than their has reviewed the board independence mechanisms and considered

appointments) the nature and extent of such conflict shall be that the implementation of the mechanisms was effective.reported to the Board as soon as possible. Where a director is

required to abstain from voting a Board meeting can be held with The Company also recognizes and embraces the benefits of having

the attendance of more than half of the non-related Directors. a diverse Board to enhance its performance and has adopted a

A resolution must be passed by a majority of the non-related Policy of Director Nomination and Board Diversity aiming to set

Directors. If less than three non-related Directors attend the out the approach to nominate directors and achieve diversity on

meeting the proposal cannot be voted on and must be submitted the Board. All Board members shall be appointed on the basis of

to the shareholders’ meeting for consideration. merit and the benefits of diversity (including gender diversity) of

the Board shall be fully taken into account in the consideration

The Company has arranged appropriate insurance coverage on of candidates on appropriate terms. In designing the Board’s

Directors’ liabilities in respect of any legal actions taken against composition board diversity has been considered from a number

Directors arising out of corporate activities. The insurance coverage

of measurable objectives including but not limited to a balance of

would be reviewed on an annual basis.skills professional experience educational background knowledge

expertise culture independence age and gender.Board Composition

The Policy of Director Nomination and Board Diversity sets out the

factors in evaluating selecting and recommending to the Board one

Executive Directors Mr. Wang Wei (chairman) or more candidates for appointment or re-election as a director

Mr. Ho Chit including but not limited to: (a) diversity of views including but

not limited to gender age cultural and educational background

Ms. Wang Xin professional experience skills regional and industry experience

Mr. Xu Bensong ethnicity knowledge and years of service; (b) qualifications

including achievements and experience in the relevant industries in

Independent Non-executive Mr. Chan Charles Sheung Wai which the Company’s business is carried out and other professional

Directors

Mr. Lee Carmelo Ka Sze qualifications; (c) commitment to the responsibilities of the Board

in terms of available time investment; (d) reputation for integrity;

Dr. Ding Yi (e) the contribution that the candidate can bring to the Board;

and (f) one or more plans for the orderly implementation of Board

To the best knowledge of the Company there is no other financial succession. In addition the Board and the Nomination Committee

business family or other material/relevant relationship among the will assess and recommend one or more candidates for the post

members of the Board. of independent non-executive director of the Company having

due regard to a number of factors including but not limited to

During the period from the H Shares Listing Date and up to the date the independence and appointment requirements of independent

of the Report the Board at all times met the requirement of the non-executive directors under the regulatory rules of the place

Listing Rules of SEHK of having a minimum of three independent

where the Company’s shares are listed.non-executive Directors (representing at least one-third of the

Board) with one of them possessing appropriate professional

qualifications or accounting or related financial management Board Practices and Conduct of Meetings

expertise.The composition of the Board reflects the necessary balance of Annual meeting schedules and draft agenda of each meeting

skills and experience appropriate for the business requirement are normally made available to the Directors in advance. For

and objectives of the Group and for the exercise of independent regular Board meeting and other Board and committee meetings

judgement. reasonable notice is generally given.The Company has received a written annual confirmation from Board papers together with all appropriate complete and reliable

each independent non-executive Director of his/her independence information are sent to all Directors at least three days before each

pursuant to the requirements of the Listing Rules of SEHK and Board meeting or committee meeting to keep Directors apprised of

the Regulations on Independent Directors of Listed Companies the latest development and financial position of the Company and to

(《上市公司獨立董事管理辦法》) for A share listed companies. To enable them to make decisions. The Board and each Director also

the best of the Company’s knowledge the Company considers have separate and independent access to the senior management

all independent non-executive Directors to be independent in where necessary.accordance with the independence guidelines set out in Rule 3.13

of the Listing Rules of SEHK.058 S.F. Holding Co. Ltd. Annual Report 2024

Corporate Governance Report

The senior management normally will attend regular Board meetings Apart from regular Board meetings the Chairman will also hold

and where necessary other Board and committee meetings to one meeting annually with the independent non-executive Directors

advise on business development financial and accounting matters without the presence of other Directors.statutory and regulatory compliance corporate governance and

other major aspects of the Company.Board Committees

The secretary of the Company is responsible for taking and keeping

minutes of all Board meetings and committee meetings. Minutes The Board has established five Board committees in accordance

of Board meetings and committee meetings record in sufficient with the relevant laws and regulations the Articles of Association

detail the matters considered and decisions reached including and the code of corporate governance practices under the Listing

any concerns raised by Directors or dissenting views expressed. Rules of SEHK namely the Audit Committee the Remuneration

and Appraisal Committee the Nomination Committee the Risk

Board Meetings and General Meetings Management Committee and the Strategy Committee. All Board

committees of the Company are established with specific written

During the year of 2024 the Company scheduled and held 8 Board terms of reference which deal clearly with their authority and duties.meetings and 2 general meetings. The attendance of individual The Board committees have sufficient resources to perform their

Directors at the Board meetings and general meetings is set out necessary duties. All Board committees must report their decisions

below: or recommendations to the Board. The terms of reference for Board

committees are published on the websites of the Hong Kong Stock

First Exchange and the Company and are available for shareholders to

Extraordinary review.General

Board Annual General Meeting of Audit Committee

Members of the Board Meetings Meeting 2024

As at the date of the Report the Audit Committee of the Company

Executive Directors consists of three independent non-executive Directors namely Mr.Chan Charles Sheung Wai Mr. Lee Carmelo Ka Sze and Dr. Ding

Mr. Wang Wei 8/8 1/1 1/1 Yi. Mr. Chan Charles Sheung Wai serves as the chairman of the

committee and has the appropriate professional qualifications as

Mr. Ho Chit 8/8 1/1 1/1 required under Rules 3.10(2) and 3.21 of the Listing Rules of SEHK.The primary duties of the Audit Committee of the Company include

Ms. Wang Xin 8/8 1/1 1/1

(but are not limited to):

Mr. Zhang Dong(1) 3/3 1/1 – 1. supervising the annual audit work making judgment on the

Mr. Xu Bensong(2) 1/1 – – authenticity accuracy and completeness of the information in

the audited financial reports before submitting to the Board for

Independent Non-executive Directors review;

Mr. Chan Charles Sheung Wai 8/8 1/1 1/1 2. providing recommendations on engaging or changing external

auditors and supervising the performance of external auditors;

Mr. Lee Carmelo Ka Sze 8/8 1/1 1/1

3. supervising and evaluating the internal audit work;

Dr. Ding Yi 8/8 1/1 1/1 4. reviewing the financial reports of the Company and expressing

opinions thereon;

Notes:

5. supervising and evaluating the Company’s financial reporting

(1) Mr. Zhang Dong resigned from his position as a Director of the system and internal control system;

Company on June 25 2024.

6. supervising and coordinating the communication between the

(2) Mr. Xu Bensong has served as a Director of the Company since

management internal auditors and external auditors; and

October 29 2024.

7. handling other matters required by laws rules and regulations

From January 1 2025 onwards the Board will meet regularly and

of the jurisdictions where the Shares are listed the Articles of

schedule to meet at least four times every year as when appropriate

Association or as authorized by the Board.in accordance with the CG Code either in person or through

electronic means of communication and the Board committees The Audit committee held 6 meetings during the year of 2024

will schedule to meet in accordance with the CG Code and their reviewed and approved among others summary of audit work for

respective terms of reference. the year of 2023 financial report and internal control report for the

first quarter of 2024 financial report and reviewed report for the firstAnnual Report 2024 S.F. Holding Co. Ltd. 059

Corporate Governance Report

059

half of 2024 financial report and internal control report for the third Nomination Committee

quarter of 2024 audit work plan for the year of 2024 and relevant

work for foreign exchange hedging transactions. The attendance As at the date of the Report the Nomination Committee of the

of its members is set out as follows: Company consists of three Directors including two independent

non-executive Directors namely Mr. Lee Carmelo Ka Sze and Dr.Ding Yi and one executive Director namely Mr. Wang Wei. Mr.Number of Lee Carmelo Ka Sze serves as the chairman of the committee.Committee The primary duties of the Nomination Committee of the Company

Meetings Attendance include (but not limited to):

Members of the Audit Committee Attended Rate 1. formulating the criteria (including skill expertise diversity policy

and experience) and procedures for the selection of Directors

Mr. Chan Charles Sheung Wai 6 100% and senior management members reviewing the structure

size and composition of the Board at least once annually and

Mr. Lee Carmelo Ka Sze 6 100% making recommendations on any proposed changes to the

Board to complement the Company’s strategy;

Dr. Ding Yi 6 100%

2. making recommendations to the Board on the nomination of

candidates for Directors and general manager;

Remuneration and Appraisal Committee 3. preliminarily examining the eligibility of candidates for Directors

As at the date of the Report the Remuneration and Appraisal general manager and secretary to the Board;

Committee of the Company consists of three independent 4. making recommendations to the Board on the nomination

non-executive Directors namely Dr. Ding Yi Mr. Chan Charles of candidates for chairmen and members of the Board

Sheung Wai and Mr. Lee Carmelo Ka Sze. Dr. Ding Yi serves as the committees;

chairlady of the committee. The primary duties of the Remuneration 5. assessing the independence of the independent non-

and Appraisal Committee of the Company include (but not limited executive Directors when appointing them and reviewing their

to): independence periodically; and

1. reviewing and making recommendations to the Board on the 6. handling other matters required by laws rules and regulations

remuneration structure and policies for Directors and senior of the jurisdictions where our Shares are listed the Articles of

management; Association or as authorized by the Board.

2. recommending to the Board the remuneration packages of The Nomination Committee held one meeting during the year of

Directors and senior management (i.e. the model described in 2024 reviewed and approved among others appointment of one

the code provision E.1.2(c)(ii) of the CG Code is adopted); executive director and board diversity policy. The attendance of its

members is set out as follows:

3. reviewing and making recommendations on the assessment

and remuneration for senior management and evaluating Number of

performance of senior management; Committee

4. managing the stock incentive plan of the Company including Members of the Nomination Meeting Attendance

reviewing the granting conditions exercise conditions under Committee Attended Rate

the plan and other matters required by the rules; and Mr. Lee Carmelo Ka Sze 1 100%

5. handling other matters required by laws rules and regulations Dr. Ding Yi 1 100%

of the jurisdictions where the Shares are listed the Articles of

Association or as authorized by the Board. Mr. Wang Wei 1 100%

The Remuneration and Appraisal Committee held 4 meetings

during the year of 2024 reviewed and approved among others Risk Management Committee

remuneration for the Company’s senior management for the year

of 2023 cancellation of options adjustment of exercise price and As at the date of the Report the Risk Management Committee of

exercise of options under the 2022 Stock Option Incentive Plan. the Company consists of three Directors including one executive

Directors namely Mr. Ho Chit and two independent non-executive

The attendance of its members is set out as follows:

Directors namely Mr. Chan Charles Sheung Wai and Mr. Lee

Carmelo Ka Sze. Mr. Ho Chit serves as the chairman of the

Number of committee. The primary duties of the Risk Management Committee

Committee of the Company include (but not limited to):

Members of the Remuneration and Meetings Attendance 1. providing guidance to the Company’s overall risk management

Appraisal Committee Attended Rate and providing support for the Board to perform risk

management functions;

Dr. Ding Yi 4 100%

2. evaluating the improvement and effectiveness of the risk

Mr. Chan Charles Sheung Wai 4 100% management system and issuing opinions; and

Mr. Lee Carmelo Ka Sze 4 100% 3. handling other matters required by laws rules and regulations

of the jurisdictions where the Shares are listed the Articles of

Association or as authorized by the Board.060 S.F. Holding Co. Ltd. Annual Report 2024

Corporate Governance Report

The Risk Management Committee held one meeting during the Appointment and Re-Election of Directors

year of 2024 reviewed and approved the risk management work

summary for year of 2023 and risk management work plan for the Each of the executive Directors has entered into a service

year of 2024. The attendance of its members is set out as follows: contract with the Company for a term starting from the date of

the Company’s third extraordinary general meeting in 2022 till the

Number of election of the next Board (for Mr. Wang Wei Mr. Ho Chit and

Committee Ms. Wang Xin) or starting from the date of the first extraordinary

Members of the Risk Management Meeting Attendance general meeting in 2024 till the election of the next Board (for Mr. Xu

Committee Attended Rate Bensong). The Company has also issued a letter of appointment to

each of the independent non-executive Directors for a term starting

Mr. Ho Chit 1 100% from the date of the third extraordinary general meeting in 2022

till the election of the next Board with each term not exceeding

Mr. Chan Charles Sheung Wai 1 100% three years. Under the Articles of Association Directors (including

non-executive Directors) shall be elected at the general meeting

Mr. Lee Carmelo Ka Sze 1 100%

with a term of three years. A Director may serve consecutive

terms if re-elected upon the expiry of his/her term. A Director

Strategy Committee shall continue to perform his duties in accordance with the laws

administrative regulations and Articles of Association until a duly

As at the date of the Report the Strategy Committee of the re-elected director takes office if re-election is not conducted

Company consists of three Directors including two independent in a timely manner upon the expiry of his term of office or if the

non-executive Directors namely Mr. Chan Charles Sheung Wai resignation of directors results in the number of directors being

and Dr. Ding Yi and one executive Director namely Mr. Wang less than the quorum.Wei. Mr. Chan Charles Sheung Wai serves as the chairman of the

committee. The primary duties of the Strategy Committee of the

Company include (but not limited to): Board Diversity Policy

1. reviewing the overall development strategy plan of the To enhance effectiveness of the Board and maintain high standard

Company including our ESG development strategy and of corporate governance the Company has adopted the Board

advising the Board accordingly; diversity policy which sets out the objective and approach

to achieve and maintain the diversity of the Board. Pursuant

2. evaluating the overall development of each business unit of the

to the Board diversity policy the Company seeks to achieve

Company and making recommendations to the Board regarding

Board diversity by taking into consideration of various factors

any adjustments;

including but not limited to gender age cultural and educational

3. reviewing the Company’s business investment and financing background ethnicity professional experience skills knowledge

plans and making recommendations to the Board; industry and regional experience and length of service. The

implementation of the policy is monitored by the Nomination

4. reviewing the annual financial budget and final accounts plan Committee. The Nomination Committee shall report its findings

and making recommendations to the Board; and and make recommendation to the Board if any. Such policy and

5. handling other matters required by laws rules and regulations objectives will be reviewed from time to time and at least on an

of the jurisdictions where the Shares are listed the Articles of annual basis to ensure their appropriateness in determining the

Association or as authorized by the Board. optimum composition of the Board.The Strategy Committee held one meeting during the year of 2024 As at December 31 2024 the Board has a balanced mix of

reviewed and approved among others the Company’s strategy and experiences and industry background. The Directors have a diverse

operation plan for 2024 sustainability report and financial report for education background including economics law accounting

the year of 2023 and financial budget report for the year of 2024. business administration and management as well as different

The attendance of its members is set out as follows: industry backgrounds and professional qualifications. The Company

has three independent non-executive Directors with different

industry backgrounds representing more than one-third of the

Number of

members of the Board. Furthermore the Board has two female

Committee

Directors and has a wide age range comprising members from

Meeting Attendance

their 30s to 70s. The Company assessed its business model and

Members of the Strategy Committee Attended Rate

the backgrounds and abilities of the Directors and concluded that

Mr. Chan Charles Sheung Wai 1 100% the composition of the Board satisfies the Board Diversity Policy.The Company is committed to maintaining gender diversity on the

Dr. Ding Yi 1 100% Board and at the working level including senior management. In

particular the Company will strive to maintain that the Board and

Mr. Wang Wei 1 100% senior management have at least one member who is not of the

same gender as the other members. As at December 31 2024 the

Board has two female Directors out of seven Directors representing

28.57% of the Board; and one out four of the senior management

of the Group (other than Directors) is female representing 25% of

the senior management.Annual Report 2024 S.F. Holding Co. Ltd. 061

Corporate Governance Report

061

During the period from the H Shares Listing Date and up to In case the Company is aware of any restricted period for dealings

the date of the Report the Board has reviewed the Policy of in the Company’s securities the Company will notify its Directors

Director Nomination and Board Diversity and considered that the Supervisors and relevant employees in advance.implementation of the policy was effective.Remuneration Policy for Directors

Training and Continuing Professional Supervisors and Senior Management

Development of Directors

With a view to further improving the remuneration management

The Directors keep abreast of regulatory developments and system for the Directors Supervisors and senior management

changes and of the conduct business activities and development H Shares establishing an incentive and restraint mechanism

of the Company in order to effectively perform their responsibilities. compatible with modern enterprise system which helps match

responsibilities with rights and fully incentivizing the Directors

Each of the Directors confirms that he or she (i) has obtained the

Supervisors and senior management the Company formulated the

legal advice referred to under Rule 3.09D of the Listing Rules of

Management System of Remuneration of Directors Supervisors

SEHK in either August 2023 or October 2024 and (ii) understands

and Senior Management which was reviewed and approved on

his or her obligations as a director of a listed issuer under the Listing

the Company’s 2017 Second Extraordinary General Meeting of

Rules of SEHK.Shareholders and the amendment was reviewed and approved

The Directors should participate in appropriate continuous on the Company’s 2020 First Extraordinary General Meeting of

professional development to develop and refresh their knowledge Shareholders.and skills to ensure that their contribution to the Board remains

According to the Management System of Remuneration of

informed and relevant. Continuing briefings and professional

Directors Supervisors and Senior Management the Company pays

development trainings for the Directors are arranged whenever

allowances to independent non-executive directors each year. The

necessary. In addition reading materials relating to the Company’s

amount of the allowances is determined at the Company’s general

business or Directors’ duties and responsibilities updates on

meeting. The allowances for independent non-executive directors

applicable laws corporate governance regulations applicable to

are issued from the following month after their appointment

the Group are provided to the Directors from time to time for their

resolutions are passed at the Shareholders’ general meeting.studying and reference. All Directors are encouraged to attend

relevant training courses at the Company’s expenses. The Company does not provide separate allowances for external

directors internal directors external supervisors or internal

The Directors are required to submit to the Company details of

supervisors. Internal directors and internal supervisors receive

the training they received in each financial year for the Company’s

remuneration according to the corresponding remuneration for

maintenance of proper training records of the Directors. Prior to

senior management or other positions concurrently held by them

the H Shares Listing Date and during the year ended December

and appraisal management approach.

31 2024 each of the Directors have attended training sessions

conducted by the legal adviser of the Company on duties of The remuneration determination mechanism of the Company’s

directors and on-going obligations of listed companies. In addition senior management is as follows: the Remuneration Management

relevant reading materials have been provided to the Directors for Committee under the Board of Directors of the Company formulates

their studying and reference. and reviews the appraisal method and remuneration plan for the

senior management appraises the performance and behavior

of the senior management and submits appraisal results to the

Model Code for Securities Transactions Board of Directors for approval. The Company determines the

annual remuneration of the senior management with reference to

The Company has adopted the Model Code regarding Directors’

the income level of the industry and the region taking into account

and Supervisors’ dealings in the securities of the Company. Having

factors such as the Company’s operating performance and their

made specific enquiry of all the Directors and Supervisors all

contribution. For our senior management the Company adopts the

Directors and Supervisors confirmed that they have complied with

annual salary system in which the fixed salary is determined with

the provisions of the Model Code during the period from the H

reference to factors including market rate and individual contribution

Shares Listing Date and up to the date of the Report.while the annual bonus is a floating incentive determined by the

The Company has also established written guidelines for securities performances of both the Company and individuals.transactions by employees who are likely to be in possession of

inside information of the Company on terms no less exacting than

the Model Code. No incident of non-compliance of the written

guidelines by the employees has been noted by the Company.062 S.F. Holding Co. Ltd. Annual Report 2024

Corporate Governance Report

Details of the remuneration (excluding equity-based remuneration) of the Directors Supervisors and senior management of the Company are

as follows:

The pre-tax compensation obtained from the Company in 2024(1)

Salaries wages Director’s

Name Title and bonus etc. emoluments Other benefits Total

RMB’000 RMB’000 RMB’000 RMB’000

Mr. Wang Wei Executive Director CEO 1239 – 70 1309

Mr. Ho Chit Executive Director CFO 7412 305 131 7848(2)

Ms. Wang Xin Executive Director 3334 133 130 3597(3)

Mr. Xu Bensong Executive Director 371 – 32 403(4)

Mr. Chan Charles Sheung Wai Independent non-executive Director 680 – – 680

Mr. Lee Carmelo Ka Sze Independent non-executive Director 680 – – 680

Dr. Ding Yi Independent non-executive Director 680 – – 680

Ms. Wang Jia Supervisor 1357 – 93 1450

Mr. Liu Jilu Supervisor – – – –

Ms. Li Juhua Supervisor 1629 – 213 1842

Mr. Zhang Shun Supervisor 847 – 93 940

Mr. Li Sheng Deputy general manager 4913 – 143 5056

Mr. Zhou Haiqiang Deputy general manager 2536 – 214 2750

Mr. Geng Yankun Deputy general manager 3022 – 141 3163

Deputy general manager secretary of the

Ms. Gan Ling Board and joint company secretary 2267 – 111 2378

Mr. Zhang Dong Former Director 1599 – 86 1685(5)

Mr. Shum Tze Leung Former Supervisor 285 – 30 315(6)

Total 32851 438 1487 34776

Notes:

(1) The emoluments set out in the above table are all pre-tax emoluments earned during their tenure of office as Directors and/or senior management

of the Company or its listed subsidiaries.

(2) Mr. Ho Chit was redesignated from a non-executive director to an executive director and chief strategy officer of KLN (0636.HK) with effect from

September 1 2024 and received the director’s fee and salary of approximately RMB1.245 million in aggregate.

(3) Ms. Wang Xin has served as chairman of board of directors of KEX (KEX.BK) since May 10 2024 and received the director’s fee of approximately

RMB133000.

(4) Mr. Xu Bensong has served as a Director of the Company since October 29 2024.

(5) Mr. Zhang Dong resigned from his position as a Director of the Company on June 25 2024.

(6) Mr. Shum Tze Leung resigned from his positions as a Supervisor and chairman of the Board of Supervisors of the Company on May 6 2024.

(7) The above discrepancy between the sum of the sub-items and the total figure is due to rounding.

For further details of the remuneration please refer to note 9(b) to the consolidated financial statements contained in the Report.Annual Report 2024 S.F. Holding Co. Ltd. 063

Corporate Governance Report

063

Board of Supervisors Joint Company Secretaries

The Company strictly follows the relevant laws and regulations The Company has appointed Ms. Gan Ling the deputy general

such as the Company Law Articles of Association and Rules manager and secretary of the Board and Ms. So Ka Man a director

of Procedure for Shareholders’ Meetings of Listed Companies of the company secretarial division of Tricor Services Limited a

to elect supervisors. The number and composition of the Board global professional services provider specializing in integrated

of Supervisors comply with legal requirements. The Board of business corporate and investor services as the Company’s joint

Supervisors convenes meetings in strict accordance with the company secretaries. Ms. Gan is Ms. So’s primary contact person

Articles of Association and Rules of Procedure for Supervisory at the Company.Board Meetings. Each supervisor diligently attends the meetings

Ms. Gan Ling and Ms. So Ka Man have taken not less than

performs their duties conscientiously supervises major company

15 hours of relevant professional training and comply with the

matters related transactions and financial conditions and provides

requirement under Rule 3.29 of the Listing Rules of SEHK for the

their opinions.year ended December 31 2024.During the year of 2024 the Company scheduled and held six

meetings for the Board of Supervisors with full attendance from

the Supervisors and mainly reviewed and approved among Risk Management and Internal Controls

others (i) the Company’s annual report financial report and profit

The Board acknowledges its responsibility for the risk management

distribution plan for the year of 2023 the work report of the Board

and internal control systems and fully recognizes the value and

of Supervisors for the year of 2023 Shareholder Return Plan for

importance of sufficient risk management and internal control

the Following Five Years (2024 - 2028) (ii) the Company’s first

systems. The Company has established the risk management

quarter report and the Company’s interim report for the year of

system and internal control system which are designed to manage

2024 (iii) adjustment of exercise price and exercise and cancellation

rather than eliminate the risk of failure to achieve the Company’s

of options under the 2022 Stock Option Incentive Plan (iv) 2024

strategic objectives and can only provide reasonable instead of

interim dividend plan and the special shareholder return dividend

absolute assurance against material misstatement or loss.plan and (v) other matters that require Supervisors’ review and

approval. The Risk Management Committee of the Board is responsible for

the overall management and control of risks at the group level

External Auditors and Auditors’ and reviews the risk management system of the Group at least once every year. Its main responsibilities include deliberation

Remuneration and decision-making of risk management system and policies

preventing major risks and responding to major crises. In 2024

The statement of the external auditors of the Company about their the Company completed the ISO37301 compliance management

reporting responsibilities for the Company’s financial statements for system certification. The following measures were adopted and

the year ended December 31 2024 is set out in the section headed implemented by the Company in 2024 in response to relevant

“Independent Auditor’s Report” in the Report. risks identified:

The external auditor of the Company will be invited to attend the 1. in response to market risks resulting from the slow growth of

annual general meeting to answer questions about the conduct of macro economy and the increased market competition the

the audit the preparation and content of the auditor’s report and Company has been closely monitoring the macro economy and

auditor’s independence. has been adjusting its business strategy in a timely manner

During the year ended December 31 2024 the remuneration paid/ continuing to diversify its business and to increase its service

payable to the Group’s external auditors PricewaterhouseCoopers(1) quality with new technology;

is set out below: 2. in response to policy risks resulting from new regulatory

requirements for the logistics industry especially higher

Nature of Services Remuneration requirements for improving the welfare of couriers customer

RMB’000 experience and ESG the Company has established policy

research teams for all business units to closely monitor policy

Audit services 50458 updates and to continuously improve its business operation;

Non-audit services (2) 12059 3. in response to operational risks resulting from higher cost

in labour infrastructure facilities and transportation and

Total 62517 uncertainties in international logistics market the Company has

been improving its operational sufficiency with new technology

Notes: and reducing its reliance on fuel by promoting the use of new

(1) Including any entity that is under common control ownership or energy vehicles. At the same time the Company has been

management with PricewaterhouseCoopers. closely monitoring international trade market and expanding its

international logistics resources to ensure steady and sufficient

(2) The non-audit services mainly included taxation services and other international services;

services.064 S.F. Holding Co. Ltd. Annual Report 2024

Corporate Governance Report

4. in response to foreign exchange risks resulting from the Anti-corruption Policies: the Company integrates anti-corruption

Company’s expansion of overseas business the Company management into its daily operations through anti-corruption risk

has established the Foreign Exchange Risk Management assessments audits and educational initiatives. These efforts

Regulation; and continuously strengthen the Company’s capacity to control business

ethics related to anti-corruption and anti-bribery. To prevent and

5. in response to data and information risks the Company has

combat corruption safeguard the legal interests of our Group

established sufficient measures for potential information system

employees clients and partners and promote sustainable and

risks including continuously implementing and optimizing its

healthy corporate development the Company actively encourages

current ISO27001 information security management system and

all employees to sign the Anti-corruption Undertaking.ISO27701 private information management system enhancing

relevant training for employees carrying out information system Whistleblowing Mechanisms: the Company provides several 24/7

security ranking assessment GDPR compliance assessment reporting channels for both internal and external stakeholders

and mobile-app-collected information compliance assessment. including email hotline and the company website encouraging

employees and suppliers to report any misconduct. Upon receiving

The Audit Committee of the Board is responsible for supervising

a report a response will be provided to the whistleblower within one

and evaluating the Company’s financial reporting system and

business day and a decision to whether to initiate an investigation

internal control system and regularly reviewing the Company’s

is made within one week. If an investigation is warranted it shall be

financial reports and external reports issued by the auditors to

completed along with a response to the findings within one month.ensure the effectiveness and adequacy of the internal control

Following the verification of any misconduct we impose penalties

system. The Company has established an internal control

based on the severity of the infraction and in cases suspected of

system including capital management investment and financing

violating the law we hand over them to legal authorities.management human resources management information

system management information disclosure related party

transactions budget management contract management asset Communications with Shareholders and

management procurement management sales management Investors

cost and expense management and financial management to

standardize the Company’s daily operation and management and The Company believes that effective communication with

realize the Company’s internal control objectives. In terms of the Shareholders is essential for enhancing investor relations and

implementation and supervision of the internal control management investors’ understanding of the Group’s business performance

system the Company sets up independent supervisory departments and strategies. The Company also recognizes the importance of

for internal audit and risk compliance which are responsible transparency and timely disclosure of corporate information which

for inspecting and evaluating the integrity reasonableness and will enable Shareholders and investors to make the best investment

implementation effectiveness of the internal control systems of decisions.the Company’s internal institutions holding subsidiaries and

joint-stock companies that have significant impacts on the The Company maintains a website at www.sf-express.com as a

Company evaluating the legality compliance authenticity and communication platform with shareholders and investors where

completeness of accounting information and other core business information and updates on the Group’s business operations

process information as well as financial income and expenditure developments and financial information are available for public

activities and other relevant economic activities. The internal access.audit and risk compliance departments report quarterly to the In line with the paperless listing regime the Company will

Audit Committee on the findings of internal control and internal disseminate its corporate communications in English and Chinese

audit promoting timely optimization and improvement of internal on the website of the Hong Kong Stock Exchange (www.hkexnews.management issues. hk) and the website of the Company (www.sf-express.com) without

The Board as supported by the Risk Management Committee disseminating printed form. If any shareholder would like to receive

and the Audit Committee considered that the risk management printed copies please refer to the notification letter dated March 4

and internal control systems of the Company for the year ended 2025 and the “Corporation Communications Arrangements” under

December 31 2024 were effective and adequate. section “Investor Relations – IR Contact” of the Company’s website

for the requesting procedure.Anti-Corruption Policy and Whistleblowing The general meetings of the Company provide an opportunity for

Mechanism communication between the Board and the Shareholders. A notice to Shareholders is sent by the Company at least 21 days before

the annual general meeting and at least 15 days before all other

The Company has implemented comprehensive policies and

general meetings.mechanisms to uphold integrity and ethical standards ensuring a

transparent and secure working environment.Annual Report 2024 S.F. Holding Co. Ltd. 065

Corporate Governance Report

065

The Company continues to enhance communications and Dividend Policy

relationships with its investors. Designated senior management

maintains regular dialogue with institutional investors and analysts

to keep them posted of the Company’s developments. Principles for profit distribution

The Company has in place Investors’ Relations Management Policy The Company’s profit distribution shall emphasize a reasonable

to ensure that Shareholders’ views and concerns are appropriately return to public shareholders with the purpose of sustainable

addressed. During the period from the H Shares Listing Date and up development and safeguarding shareholders’ rights and interests

to the date of the Report the Company has reviewed the Investors’ maintain the continuity and stability of profit distribution policies

Relations Management Policy and considered that the policy was and comply with the relevant provisions of laws and regulations.effectively implemented with the measures as disclosed above.Way of profit distribution

Shareholder Rights Dividends can be distributed in the form of cash shares or a

combination of both and distribution of profits by way of cash

As one of the measures to safeguard Shareholders’ interests and

dividends should be given priority.rights separate resolutions are proposed at Shareholders’ meetings

for each substantially separate issue including the election of

individual Directors for Shareholders’ consideration and voting. All Conditions for cash dividends

resolutions put forward at general meetings will be voted on by poll

For distribution of cash dividends the following conditions shall

pursuant to the Listing Rules of SEHK and the poll voting results

be satisfied:

will be posted on the websites of the Hong Kong Stock Exchange

and the Company immediately after the relevant general meetings. 1. The distributable profit (i.e. the after-tax profit remaining after

making up for the losses and making contributions to the

Convening an Extraordinary General Meeting common reserve fund) realized by the Company in a year is

positive;

and Putting Forward Proposals at General

Meetings 2. The auditor issues a standard unqualified audit report on the

annual financial report of the Company;

Pursuant to the Articles of Association Shareholders holding

3. The Company has no material investment plans or significant

individually or collectively certain percentage or more of the shares

cash expenditures (except for fundraising investment projects)

of the Company can (i) require the Board of Directors to convene

within the next 12 months.an extraordinary general meeting (ii) make a proposal to the

Company at a shareholders’ general meeting of the Company. For Material investment plans or significant cash expenditures refer

more details please refer to the Company’s Articles of Association. to the total accumulative expenditures for external investment

acquisition of assets or purchase of equipment by the Company

Putting Forward Enquiries to the Board within the next 12 months reaching or exceeding 20% of the latest

audited net assets of the Company and exceeding RMB50 million.The Board gives high priority to maintaining balanced clear and

transparent communications with Shareholders and other investors Cash dividend payout ratio and time

to facilitate their understanding of the Company’s performance and

prospects as well as the market environment in which it operates. Subject to the compliance of the profit distribution principles

We have an ongoing dialogue with Shareholders and other investors the maintenance of the normal operation and the long-term

through various communication channels and take any areas of development of the Company where cash distribution conditions

concern into consideration when formulating the Group’s business are met the Company in principle makes the cash dividend

strategies. payment once a year. Cash dividend for each year shall not be

less than 10% of the distributable profit realized for that same year

Shareholders may at any time send their enquiries requests

the aggregate cash dividend for any three consecutive years shall

proposals and concerns to the Board in writing through the

not be less than 30% of the average distributable profits realized

Company. The contact details of the Company are as follows:

during such three years. Under certain conditions the Company

Email: sfir@sf-express.com may distribute interim dividends according to its actual operating

conditions.We will respond promptly to shareholders’ enquiries and concerns.066 S.F. Holding Co. Ltd. Annual Report 2024

Corporate Governance Report

When the Company convenes an annual general meeting to Resident enterprise shareholders of A shares shall report and pay

consider the annual profit distribution plan it may consider and for the enterprise income tax of dividends by themselves.approve the conditions maximum proportion and maximum

For the shareholders who are Qualified Foreign Institutional Investor

amount of cash dividends for the interim period of the next

(QFII) the listed companies shall withhold and pay enterprise

year. The maximum amount of interim dividend for the next year

income tax at a rate of 10% pursuant to the requirements of the

considered at the annual general meeting shall not exceed the net

Notice of the State Administration of Taxation Concerning the

profit attributable to shareholders of the listed company for the

Relevant Questions on the Withholding and Payment of Enterprise

corresponding period. The Board of Directors shall formulate a

Income Tax Relating to the Payment of Dividends Bonus and

specific interim dividend plan in accordance with the resolutions

Interest by PRC Resident Enterprises to QFII (Guo Shui Han [2009]

of the shareholders’ general meeting subject to the conditions ofNo. 47)* (《國家稅務總局關於中國居民企業向QFII支付股息、紅利、profit distribution.利息代扣代繳企業所得稅有關問題的通知》(國稅函2009[47]號)). QFII

The Board has formulated the Shareholders’ Return Plan for shareholders entitled to preferential tax treatment under tax treaties

2024-2028 according to which the total amount of cash dividends (arrangements) shall apply to the competent taxation authority for

of the Company in 2023 accounted for about 35% of the profit tax rebates according to the relevant rules and regulations after they

attributable to owners of the Company in that year and the receive the dividends and tax rebates will be executed under tax

proportion of cash dividends of the Company from 2024 to 2028 treaties upon verification carried out by competent tax authorities.will increase steadily on the basis of that in 2023. Decisions to

For non-PRC resident enterprise shareholders of A shares except

declare or to pay any dividends in the future will depend on

the above-mentioned QFII listed companies shall withhold and pay

among other things the Company’s profitability operations and

enterprise income tax at a rate of 10% pursuant to the requirements

development plans external financing environment costs of capital

of the Tentative Measures for Administration of Withholding at the

the Company’s cash flows and other factors that the Directors may

Source of Income Tax of non-PRC Resident Enterprises (Guo Shui

consider relevant.Fa [2009] No. 3)* (《非居民企業所得稅源泉扣繳管理暫行辦法》(

國稅發[2009]3號)) and the Response of the State Administration

Reduction and Exemption of Dividend Tax of Taxation Concerning Questions on Enterprise Income Tax over

Dividend of B-Shares and Other Shares Received by non-PRCFor Holders of A shares Resident Enterprises (Guo Shui Han [2009] No. 394)* (《國家稅務總局關於非居民企業取得 B 股等股票股息徵收企業所得稅問題的批覆》

In accordance with the Notice of the Ministry of Finance the (國稅函[2009]394號)). non-PRC resident enterprise shareholders

State Administration of Taxation and the CSRC on Implementing entitled to preferential tax treatment shall make registration in

Differentiated Individual Income Tax Policy for Stock Dividends of accordance with the relevant provisions of the tax treaties.Listed Companies (Cai Shui [2015] No. 101)* (《財政部、國家稅務總局、中國證監會關於上市公司股息紅利差別化個人所得稅政策有 Pursuant to the requirements of the Notice of the Ministry of關問題的通知》(財稅[2015]101號)) for shares of listed companies Finance the State Administration of Taxation and the CSRC on the

acquired by individuals from public offerings or transfer of shares Tax Policies Related to the Pilot Program of the Shenzhen-Hongin the market where the holding period exceeds one year the Kong Stock Connect (Cai Shui [2016] No. 127) *(《財政部、國dividends shall be temporarily exempted from individual income 家稅務總局、中國證監會關於深港股票市場交易互聯互通機制試點tax; where the holding period is more than one month and less 有關稅收政策的通知》(財稅[2016]127號)) listed companies shall

than one year (inclusive) the dividends shall be subject to individual withhold an income tax at the rate of 10% on dividends from the A

income tax at the rate of 10% and where the holding period is shares of the company invested by Hong Kong investors (including

less than one month (inclusive) the dividends shall be subject to enterprises and individuals) through the Shenzhen Stock Exchange

individual income tax at the rate of 20%. For dividends distributed and apply for withholding via the competent tax authorities (before

by listed companies where the period of individual shareholding is the Hong Kong Securities Clearing Company Limited is able to

within one year (inclusive) the listed companies shall not withhold provide details such as investor identities and holding periods to

the individual income tax temporarily. The tax payable subject to China Securities Depository and Clearing Corporation Limited the

individual transfer of shares shall be calculated by China Securities policy of differentiated rates of taxation based on holding periods

Depository and Clearing Corporation Limited in accordance with will temporarily not be implemented). For investors who are tax

the duration of its holding period. Custodian of shares including residents of other countries and whose country of domicile is a

securities companies will withhold the amount from individual country which has entered into a tax treaty with the PRC stipulating

accounts and transfer the tax to China Securities Depository and a dividend tax rate of lower than 10% those enterprises and

Clearing Corporation Limited. China Securities Depository and individuals may or may entrust a withholding agent to apply to the

Clearing Corporation Limited shall transfer the tax to the listed competent tax authority of the listed company for the entitlement of

companies within 5 working days of the next month and the listed the rate under such tax treaty. Upon approval by the competent tax

companies shall declare the tax to the competent tax authorities authority the paid amount in excess of the tax payable based on

upon receiving the tax amount within the statutory Reporting Period the tax rate according to such tax treaty will be refunded.of that month.Annual Report 2024 S.F. Holding Co. Ltd. 067

Corporate Governance Report

067

For Holders of H shares According to the requirements of the Notice on the Tax Policies

Concerning the Pilot Program of the Shanghai-Hong Kong

Pursuant to the Circular on Questions Concerning the Collection of Stock Connect published by the Ministry of Finance the State

Individual Income Tax Following the Repeal of Guo Shui Fa [1993] Administration of Taxation and the CSRC (Cai Shui [2014] No.No. 045 (Guo Shui Han [2011] No. 348)* (《關於國稅發[1993]045號 81) (《財政部、國家稅務總局、中國證監會關於滬港股票市場交易文件廢止後有關個人所得稅徵管問題的通知》 (國稅函[2011]348號)) 互聯互通機制試點有關稅收政策的通知》(財稅[2014]81號)) and the

overseas resident individual holders of H Shares may enjoy relevant Notice on the Tax Policies Concerning the Pilot Program of the

tax incentives on dividends in accordance with the tax treaties Shenzhen-Hong Kong Stock Connect published by the Ministry

signed between the PRC and their jurisdiction as well as the tax of Finance the State Administration of Taxation and the CSRCarrangement between the PRC and Hong Kong. For the purpose of (Cai Shui [2016] No. 127) (《財政部、國家稅務總局、中國證監simplifying tax administration dividends paid to overseas resident 會關於深港股票市場交易互聯互通機制試點有關稅收政策的通知》

individual holders of H Shares are generally subject to individual (財稅[2016]127號)) listed companies shall withhold an individual

income tax at the withholding tax rate of 10%. Overseas resident income tax at the rate of 20% on dividends from the H shares

individual holders who reside in jurisdictions that have not entered of the company invested by mainland individual investors on the

into tax treaties with the PRC are subject to individual income tax Hong Kong Stock Exchange through the Shanghai-Hong Kong

at the withholding rate of 20%. Stock Connect and the Shenzhen-Hong Kong Stock Connect.Pursuant to the requirements of the Notice of the State For dividends of the shares listed on the Hong Kong Stock

Administration of Taxation on Matters Concerning Withholding Exchange received by mainland securities investment funds from

Enterprise Income Tax When PRC Resident Enterprises Distribute investment through the Shanghai-Hong Kong Stock Connect and

Dividends to Foreign non-PRC Resident Enterprise Shareholders the Shenzhen-Hong Kong Stock Connect individual income taxof H Shares (Guo Shui Han [2008] No. 897)* (《國家稅務總局關於 shall be calculated in accordance with the above requirements. For中國居民企業向境外 H 股非居民企業股東派發股息代扣代繳企業所 dividends of the shares listed on the Hong Kong Stock Exchange得稅有關問題的通知》(國稅函[2008]897號)) distributing dividends received by mainland enterprise investors from investment through

to foreign non-resident enterprise shareholders of H shares for the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong

2008 and for the years onwards shall be subject to the enterprise Kong Stock Connect H-share companies shall not withhold income

income tax withheld at a uniform rate of 10%. Upon receipt of such tax of dividends and mainland enterprise investors shall report

dividends an overseas non-PRC resident enterprise shareholder and pay the tax amount by themselves. In particular the dividends

may apply to the competent tax authorities for relevant treatment received by resident enterprises in mainland which hold H shares for

under the tax treaties (arrangements) in person or through a at least 12 consecutive months shall be exempted from enterprise

proxy or a withholding agent and provide evidence in support income tax according to law.of its status as a beneficial owner as defined in the tax treaties Save as disclosed above Directors are not aware of any tax relief

(arrangements). Upon verification by the competent tax authorities and exemption available to the Shareholders by reason of their

the difference between the tax levied and the amount of tax payable holding of the Company’s listed securities.as calculated at the tax rate under the tax treaties (arrangements)

will be refunded.Constitutional Documents

During the Relevant Period the Company has not made any

changes to its constitutional documents.068 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

The Board is pleased to present this Report and the audited The Board recommended the final dividend distribution plan for the

financial statements of the Group for the year ended December year ended December 31 2024 with details as follows:

312024.

Based on the total number of Shares registered on the record

date for the equity distribution of 2024 final dividend distribution

Principal Business plan (the “Record Date”) the Company proposes to distribute

cash dividends to all shareholders whose names appear on the

The Group is the largest integrated logistics service provider in the register of members on the Record Date with a cash dividend

PRC and Asia and the fourth largest in the world. Focusing on the of RMB4.4 (tax inclusive) per 10 Shares. The Company will not

logistics ecosystem the Group has consistently built on its service carry out bonus issue and conversion of capital reserve into share

capabilities and has diversified its business to eight segments capital. Upon preliminary calculation using the Company’s total

namely time-definite express economy express freight cold number of Shares as of the date of the Report and excluding the

Shares in the repurchase securities account on the even date the

chain and pharmaceutical intra-city on-demand delivery supply

amount of the final cash dividend distribution is expected to be

chain and international business (including international express

RMB2.185 billion. The exact amount distributed therefor is subject

international cargo and freight forwarding and supply chain) which

to the announcement to be made by the Company in relation to

can provide customers with domestic and international end-to-end the implementation of distribution. Cash dividends distributed by

one-stop supply chain services. the Company are denominated and declared in RMB and payable

During the year ended December 31 2024 there was no material in RMB to holders of A Shares and in HKD to holders of H Shares.change in the nature of the principal activities of the Group. The exchange rate for the dividend to be paid in HKD will be the

average central parity rate of HKD against RMB as announced by

An analysis of the Group’s revenue and operating profit for the year the People’s Bank of China during the five Business Days prior to

ended December 31 2024 by principal activities is set out in the the date on which the dividend distribution plan to be resolved at

section headed “Management Discussion and Analysis” on pages the 2024 annual general meeting.

16 to 52 in this annual report.

Coupled with the 2024 interim cash dividend of approximately

RMB1.918 billion disbursed the estimated aggregate amount of

Results and Dividend Distribution cash dividends for 2024 is RMB4.104 billion (excluding the one-off

special cash dividend disbursed for returning shareholders which

The results of the Group for the year ended December 31 2024 amounted to approximately RMB4.795 billion) accounting for

are set out in the consolidated statement of profit or loss and the 40% of the profit attributable to owners of the Company in 2024.consolidated statement of other comprehensive income on pages The cash dividend payout ratio has increased steadily from 35%

88 to 89. Discussion and analysis about the operating performance in 2023. The 2024 final dividend distribution plan is subject to

and significant elements affecting the results of operations and deliberation and approval at the 2024 annual general meeting of

the Company.financial condition of the Group during the year are set out in the

section headed “Management Discussion and Analysis” on pages As at the date of the Report the Board is not aware of any

16 to 52 in the Report. shareholders who have waived or agreed to waive any dividends.

In November 2024 the Company distributed the 2024 interim cash For the Company’s dividend policy please refer to the section

dividend and the special cash dividend for returning shareholders headed “Corporate Governance Report” on pages 56 to 67 in the

to all shareholders i.e. the holders of A Shares both of which Report.were deliberated and approved at the first extraordinary general

meeting for 2024 respectively with a cash dividend of RMB4 (tax Customers and Suppliers

inclusive) and RMB10 (tax inclusive) for every 10 Shares. Based on

4795415625 Shares (excluding the A Shares in the repurchase The Group understands the importance of maintaining good

securities account) the total cash dividend amount for both relationships with its stakeholders and considers it a key element

distributions was RMB6.71 billion (tax inclusive). to its sustainable business growth.Annual Report 2024 S.F. Holding Co. Ltd. 069

Report of Directors

069

The Group strives to build and maintain long term and strong relationships with customers and provides one-stop solutions to multinationals

large corporations small and medium enterprises and retail customers to address a full range of customers’ logistics needs. The Group

always adheres to the customer-centric approach to provide them warm services. In terms of supplier the Group makes every effort to build a

mutually beneficial and win-win partnership with all suppliers. At the same time the Group regularly evaluates the performance of its suppliers.During the year ended December 31 2024 the amount and percentage of the five largest customers and suppliers of the Group are as follows:

Amount Percentage

RMB’000

Revenue generated from the largest customer 8232942 2.89%

Revenue generated from the five major customers 25944189 9.11%

Expenditure on purchases from the largest supplier 22844550 8.27%

Expenditure on purchases from the five major suppliers 53844926 19.49%

None of the Directors their respective close associates or any Shareholder (which to the best of the Directors’ knowledge owns more than

5% of the number of issued Shares) had any interest in any of five largest customers or suppliers of the Group during the Reporting Period.

Main Risk Factors

An analysis of the main risk factors affecting the Company’s principal activities is set out in the section headed “Corporate Governance Report”

on pages 56 to 67 in the Report.Issued Shares

As at December 31 2024 the Company issued a total of 4986186983 ordinary Shares. Details of movements in the share capital of the

Company during the year ended December 31 2024 are as follows:

Changes in the year of 2024

Number of Number of

Shares as at Cancellation of Shares as at

January 1 repurchased Issuance of December 31

2024 Shares new Shares Total 2024

A Shares 4895202373 (79291153) 275763 (79015390) 4816186983(1)

H Shares – – 170000000 170000000 170000000

Total 4895202373 (79291153) 170275763 90984610 4986186983

Note:

(1) Including 20771358 A Shares which are treasury shares of the Company placed in the Company’s repurchase securities account.

Purchase Sale and Redemption of Listed Securities of the Company

Neither the Company nor any of its subsidiaries purchased sold or redeemed any of the Company’s securities (including sale of treasury

shares) listed on the Hong Kong Stock Exchange during the Relevant Period.070 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

Sufficient Public Float

The Hong Kong Stock Exchange has granted the Company a waiver from strict compliance with Rule 8.08(1) of the Listing Rules of SEHK so

that the minimum percentage of the H Shares from time to time held by the public shall be the higher of (a) 3.41% and (b) such percentage

of H Shares to be held by the public after the exercise of the Over-allotment Option (as defined in the Prospectus) of the enlarged issued

share capital of the Company. As disclosed in the Company’s announcement dated December 23 2024 the Over-allotment Option was not

exercised and lapsed on December 22 2024. Under Rules 8.08(1)(b) and 19A.13A of the Listing Rules of SEHK the denominator for the

calculation of minimum H Shares public float percentage shall not include any treasury shares of the Company.As at the date of the Report the Company held 20771358 treasury A Shares (the “Treasury A Shares”) which were the A Shares repurchased

by the Company and placed in the Company’s repurchase securities account and did not hold any treasury H Shares. On the basis of the

aforementioned as at the date of the Report the number of H Shares held by the public represented 3.42% of the total issued share capital

of the Company (excluding the Treasury A Shares) and the Directors confirmed that the Company has maintained the minimum public float

as required by the Hong Kong Stock Exchange under Rules 8.08 and 19A.13A of the Listing Rules of SEHK since the Listing.

2022 Stock Option Incentive Plan (A Shares)

The Company has adopted the 2022 Stock Option Incentive Plan as approved by the second extraordinary general meeting of 2022 on May

17 2022. The source of shares of the 2022 Stock Option Incentive Plan shall be the A Shares repurchased by the Company and placed in

the Company’s repurchase securities account and/or the A Shares issued to participants. As at the date of the Report all the options under

the 2022 Stock Option Incentive Plan have been granted and no option will be further granted.Purpose and administration of the 2022 Stock Option Incentive Plan

The purpose of the 2022 Stock Option Incentive Plan is to establish and improve the corporate governance structure and operation mechanism

of the Company to establish and improve the incentive mechanism of the Company to connect the interests of Shareholders and the Company

together with the individual interests of the core talents of the Company and to promote all parties to focus on the long-term development of

the Company and to attract and retain outstanding core talents. The 2022 Stock Option Incentive Plan shall be subject to the administration

of the Board and the supervision of the Board of Supervisors.Selected participants

Selected participants under the 2022 Stock Option Incentive Plan are core talents who are important for the Company’s future operation and

development including Directors and members of senior management team key management members and key staff excluding independent

directors supervisors and shareholders who individually or collectively hold 5% or more of the share equity of the Company or actual controller

and their spouses parents children and any person prohibited by article 8 of the Measures for the Administration of Equity Incentives of Listed

Companies to be eligible participants. The selected participants shall be employed by the Company or its subsidiaries at the time the relevant

options are granted and during the assessment period of the 2022 Stock Option Incentive Plan and have not participated in any other share

related incentive scheme currently in force. The maximum entitlement of each selected participant under the 2022 Stock Option Incentive Plan

shall not exceed 1% of the Company’s total issued share capital at the time the terms of the 2022 Stock Option Incentive Plan was published.Total number of outstanding options and maximum entitlement of each participant

As at December 31 2024 the number of underlying A Shares pursuant to the outstanding options under the 2022 Stock Option Incentive

Plan amounted to 27295395 representing approximately 0.55% of the total issued Shares of the Company as at the date of the Report

(excluding 20771358 A Shares in the Company’s repurchase account) with the number of Shares to be issued upon exercise of the relevant

options ranging from 5000 A Shares to 366000 A Shares for each grantee.Annual Report 2024 S.F. Holding Co. Ltd. 071

Report of Directors

071

Option period

Option period runs from the first trading day after the 12-month anniversary from the date of grant to the last trading day before the 60-month

anniversary from the date of grant. The exercise schedule of the options granted are as follows:

Exercise

Exercise schedule Exercise period percentage

The first period of exercise From the first trading day after the 12-month anniversary from the date of grant to 25%

the last trading day before the 24-month anniversary from the date of grant

The second period of exercise From the first trading day after the 24-month anniversary from the date of grant to 25%

the last trading day before the 36-month anniversary from the date of grant

The third period of exercise From the first trading day after the 36-month anniversary from the date of grant to 25%

the last trading day before the 48-month anniversary from the date of grant

The fourth period of exercise From the first trading day after the 48-month anniversary from the date of grant to 25%

the last trading day before the 60-month anniversary from the date of grant

Plan period

The 2022 Stock Option Incentive Plan will be valid from the first grant of options till all the options granted are exercised or canceled and

shall in any event not exceed 67 months.Performance targets

Company’s performance targets

The annual performance assessment targets of the Company are as follows:

Period of exercise Performance assessment target

The first period of exercise The revenue income of 2022 is not less than RMB270 billion or the net profit margin attributable to

parent company in 2022 is not less than 2.1%

The second period of exercise The revenue income of 2023 is not less than RMB315 billion or the net profit margin attributable to

parent company in 2023 is not less than 2.6%

The third period of exercise The revenue income of 2024 is not less than RMB370 billion or the net profit margin attributable to

parent company in 2024 is not less than 2.9%

The fourth period of exercise The revenue income of 2025 is not less than RMB435 billion or the net profit margin attributable to

parent company in 2025 is not less than 3.3%

Grantee’s performance appraisal requirements

The performance appraisal requirements for grantees under the 2022 Stock Option Incentive Plan are as follows:

For Directors members of the senior management team and key management members:

Appraisal results A1 A2 B1 B2 B3 C1 C2 and below

Percentage of exercise 100% 50% 0%

For key staff:

Appraisal results A1 A2 B1 B2 B3 C1 C2 and below

Percentage of exercise 100% 50% 0%072 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

The basis of determination of the exercise price of options

The second extraordinary general meeting of the Company in 2022 authorized the Board to determine the exercise price of the 2022 Stock

Option Incentive Plan. The initial exercise price is RMB42.61 which is 90% of the average trading price of the A Shares on the last trading

day before the announcement of the draft 2022 Stock Option Incentive Plan (the “Previous Trading Day”) (total trading amount of the A Shares

on the Previous Trading Day/total trading volume of the A Shares on the Previous Trading Day). The exercise price shall be further adjusted

accordingly if the Company undergoes events such as capital reserve to increase share capital stock dividends stock splits or reverse splits

rights issues or dividend distributions. As of the date of this Report the exercise price of the 2022 Stock Option Incentive Plan has been

adjusted to RMB40.199.Details of the options granted and movements during the year ended December 31 2024 are as follows(1):

Number of Options

Weighted

average

closing price

immediately

before the

date of

Exercised Cancelled Outstanding exercise

Outstanding during the during the as at of options

as at January Relevant Relevant December 31 during the

Name or category of participants Date of grant Exercise price 1 2024 Period Period(2) 2024 year

Directors (on individual named basis)

Ho Chit May 30 2022 RMB40.199 366000 0 0 366000 –

Wang Xin May 30 2022 RMB40.199 366000 0 0 305000 –

Xu Bensong May 30 2022 RMB40.199 204000 0 0 204000 –

The four highest paid individuals during the financial year (other than Directors)(3)

In aggregate May 30 2022 RMB40.199 627000 0 0 627000 –

Other Eligible Participants

In aggregate Between May RMB40.199 32840695 275763 6832537 25793395 42.93

30 2022 to

October 28

2022 (both days

inclusive)

Total 34403695 275763 6832537 27295395

Notes:

(1) Please refer to the section headed “Option period” for the exercise period of the options.

(2) Including (i) options that cannot be exercised as individual performance targets were not achieved (ii) options that cannot be exercised as the

holding participant is no longer an employee of the Group and (iii) options exercisable but not exercised during the respective exercise period and

lapsed with exercise prices being RMB42.183 and RMB41.593.

(3) The five highest paid individuals during the financial year included an executive Director Mr. Ho Chit whose option information has been disclosed

individually.

(4) During the year ended December 31 2024 there was no options granted. Therefore the number of shares that may be issued in respect of options

granted under the 2022 Stock Option Incentive Plan during the Reporting Period divided by the weighted average number of shares of the relevant

class in issue (excluding treasury shares) is nil.Annual Report 2024 S.F. Holding Co. Ltd. 073

Report of Directors

073

Convertible Bonds Options Warrants and Other Convertible Equity-Linked Agreements

The 2022 Stock Option Incentive Plan constitutes an equity-linked agreement within the meaning of regulation 6 of Companies (Directors’Report) Regulation (Chapter 622D of the Laws of Hong Kong). Details of the 2022 Stock Option Incentive Plan are set out in the “2022 StockOption Incentive Plan (A Shares)” section above.Save as disclosed above the Company did not enter into any equity-linked agreement during the year ended December 31 2024.Pre-Emptive Rights

There is no provision for pre-emptive rights under the Articles of Association or the laws of the People’s Republic of China that would oblige

the Company to offer new shares on a pro rata basis to existing Shareholders.Reserves

Details of movements in the reserves of the Group during the year ended December 31 2024 are set out in the note 32 to the consolidated

financial statements.Principal Subsidiaries

Details of the principal activities of the principal subsidiaries of the Company are set out in note 42 to the consolidated financial statements.Property Plant and Equipment

Details of the movements during the year ended December 31 2024 in the property plant and equipment of the Group are set out in note

14 to the consolidated financial statements.

Working Capital Financial Resources and Capital StructureFor details of the working capital financial resources and capital structure of the Group please refer to the section headed “ManagementDiscussion and Analysis” on pages 16 to 52 in the Report.Loan and Guarantee Provided to Directors Supervisors Senior Management Controlling

Shareholders of the Company or their Respective Connected Persons

The Company has adopted the 2019 Employee Welfare Loan Management Policy under which the Company provided entrusted interest-free

loan to selected employees through banks for a term of five years. Other than outstanding loans under the 2019 Employee Welfare Loan

Management Policy there is no outstanding loan or guarantee provided to Directors Supervisors senior management Controlling Shareholders

of the Company or their respective connected persons.During the Reporting Period the Company had not made any loan or provided any guarantee for loan directly or indirectly to the Directors

Supervisors and senior management of the Company the Controlling Shareholders of the Company or their respective connected persons.Use of Proceeds from the Global OfferingFor details of the use of proceeds from the global offering of H Shares please refer to the section headed “Management Discussion andAnalysis” on pages 16 to 52 in the Report.074 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

Compliance with Laws and Regulations and Legal Proceedings

The Group recognizes the importance of compliance with regulatory requirements and the risks and consequences of non-compliance with

such requirements. The Group has allocated abundant resources to ensure ongoing compliance with laws and regulations and to maintain

healthy relationships with regulators through effective communications. For the year ended December 31 2024 the aggregate amount

involved in ongoing litigations and arbitrations where the listed company and its subsidiaries were defendants or respondents was RMB960

million accounting for 1.05% of the equity attributable to owners of the Company audited as at the end of 2024. Most of these litigations

and arbitrations are independent individual cases and the amount involved in each single case is not significant. Therefore they will not have

a material adverse impact on the Company’s financial situation and its ability to continue operation. During the Relevant Period the Group

has complied to the best of the Directors’ knowledge with all relevant rules and regulations that have a significant impact on the Company.Management Contract

No contracts concerning the management and administration of the whole or any substantial part of the business of the Company were entered

into or existed during the Relevant Period.Contracts and Relationship with Controlling ShareholdersSave for Mr. Wang Wei’s service contract as an Executive-Director and save as disclosed in the section headed “Connected Transactionsand Continuing Connected Transactions” below in this annual report no contract of significance or contract of significance for the provision

of services has been entered into among the Company or any of its subsidiaries and the Controlling Shareholders during the year ended

December 31 2024.Controlling Shareholders’ Non-Compete Undertaking

Each of Mingde Holding and Mr. Wang Wei has provided a non-compete undertaking to our Company on May 22 2016. For details of the

non-compete undertaking please refer to our Prospectus dated November 19 2024.Annual Report 2024 S.F. Holding Co. Ltd. 075

Report of Directors

075

Interests and Short Positions of Substantial Shareholders in Shares and Underlying

Shares of the Company

As at December 31 2024 so far as is known to the Directors the following persons (not being Directors Supervisors or chief executive of

the Company) had or were deemed to have interests or shorts positions in the Shares underlying Shares or debentures of the Company

which would fall to be disclosed to the Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of

the SFO or which were required to be recorded in the register of interests required to be kept by the Company under section 336 of the SFO:

Approximate Approximate

percentage of percentage of

shareholding in the shareholding in the

Number of Shares relevant class of total issued Shares

Name of substantial Shareholder Class of Shares Nature of interest interested(1) Shares of the Company

Wang Wei(2) A Shares Interest of controlled 2661927139 (L) 55.27% 53.39%

corporation

Mingde Holding(2) A Shares Beneficial owner(3) 2561927139 (L) 53.19% 51.38%

A Shares Interest of controlled 100000000 (L) 2.08% 2.01%

corporation

Morgan Stanley(4) H Shares Interest of controlled 11750083 (L) 6.91% 0.24%

corporation 2664973 (S) 1.57% 0.05%

Morgan Stanley International H Shares Interest of controlled 11636083 (L) 6.84% 0.23%

Holdings Inc.(4) corporation 1931329 (S) 1.14% 0.04%

Morgan Stanley International H Shares Interest of controlled 11636083 (L) 6.84% 0.23%

Limited(4) corporation 1931329 (S) 1.14% 0.04%

Morgan Stanley Investments H Shares Interest of controlled 11636083 (L) 6.84% 0.23%

(UK)(4) corporation 1931329 (S) 1.14% 0.04%

Morgan Stanley & Co. H Shares Beneficial owner 11636083 (L) 6.84% 0.23%

International plc(4) 1931329 (S) 1.14% 0.04%

RWC Asset Advisors (US) LLC H Shares Investment manager 10186000 (L) 5.99% 0.20%

Notes:

(1) The letter “L” denotes the person’s long position in the Shares.

(2) Mr. Wang Wei held the A Shares of the Company through Mingde Holding. Mingde Holding directly held 2561927139 A Shares of the Company

and indirectly held 100000000 A Shares of the Company through Shenzhen Weishun its wholly-owned subsidiary. Mr. Wang held 99.90% of the

equity interest in Mingde Holding. Accordingly Mr. Wang shall be deemed to be interested in the A Shares of the Company held by Mingde Holding

under Part XV of the SFO.

(3) As at December 31 2024 Mingde Holding held a total of 2561927139 A Shares in the capacity of beneficial owner. Among them an aggregate

of another 895600000 A Shares held by Mingde Holding were subject to pledges granted under certain loan and credit facilities in favor of certain

PRC financial institutions regulated by NAFR and/or CSRC.

(4) As at December 31 2024 (i) Morgan Stanley & Co. International plc is a wholly-owned subsidiary of Morgan Stanley Investments (UK) and Morgan

Stanley Investments (UK) is wholly owned by Morgan Stanley International Limited. Morgan Stanley International Limited is a wholly-owned subsidiary

of Morgan Stanley International Holdings Inc. and Morgan Stanley International Holdings Inc. is wholly owned by Morgan Stanley. Therefore each

of Morgan Stanley Morgan Stanley International Holdings Inc. Morgan Stanley International Limited and Morgan Stanley Investments (UK) was

deemed to be interested in the H Shares and short positions held by Morgan Stanley & Co. International plc.; (ii) Morgan Stanley Capital Services

LLC held 733644 short positions in the Company and is a wholly-owned subsidiary of Morgan Stanley Domestic Holdings LLC. Morgan Stanley

Domestic Holdings LLC is wholly owned by Morgan Stanley Capital Management LLC and Morgan Stanley Capital Management LLC is wholly

owned by Morgan Stanley. Therefore Morgan Stanley is deemed to be interested in the 733644 short positions held by Morgan Stanley Capital

Services LLC; (iii) Morgan Stanley & Co. LLC was interested in 114000 H Shares of the Company and is a wholly-owned subsidiary of Morgan

Stanley Capital Management LLC. As Morgan Stanley Capital Management LLC is wholly owned by Morgan Stanley Morgan Stanley is deemed

to be interested in the 114000 H Shares held by Morgan Stanley & Co. LLC.076 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

Save as disclosed above as at December 31 2024 the Directors of the Company are not aware of any other person or corporation having

an interest or short position in the Shares and underlying Shares of the Company which would require to be disclosed to the Company under

the provisions of Divisions 2 and 3 of Part XV of the SFO or which were recorded in the register required to be kept by the Company pursuant

to section 336 of the SFO.Interests and Short Positions of Directors and Chief Executive in Shares Underlying

Shares and Debentures of the Company and its Associated Corporations

As at December 31 2024 the interests or short positions of the Directors Supervisors and chief executive of the Company in the Shares

underlying Shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (a) were

required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including

interests and short positions which were held or deemed to have under such provisions of the SFO); or (b) were required pursuant to section

352 of the SFO to be recorded in the register referred to therein; or (c) were required to be notified to the Company and the Hong Kong

Stock Exchange pursuant to the Model Code were as follows:

Interest in Shares or underlying Shares of our Company

Approximate Approximate

percentage of percentage of

shareholding in the shareholding in the

Name of Director Supervisor Number of relevant class of total issued Shares

and chief executive Class of Shares Nature of interest Shares interested(1) Shares(2) of the Company(2)

Wang Wei A Shares Interest of controlled corporation(3) 2661927139 (L)(3) 55.27% 53.39%

Ho Chit A Shares Beneficial Owner 488000 (L)(4) 0.01% 0.01%

Wang Xin A Shares Beneficial Owner 477000 (L) 0.01% 0.01%

Xu Bensong A Shares Beneficial Owner 258200 (L) 0.005% 0.005%

Lee Carmelo Ka Sze A Shares Beneficial Owner 38000 (L) 0.001% 0.001%

Notes:

(1) The letter “L” denotes the person’s long position in the Shares.

(2) The calculation is based on the issued Shares of the Company comprised of 4816186983 A Shares (including A Shares in the Company’s

repurchase securities account) and 170000000 H Shares as at December 31 2024.

(3) Including (i) 2561927139 A Shares held by Mingde Holding and (ii) 100000000 A Shares held by Shenzhen Weishun a wholly-owned subsidiary

of Mingde Holding. As at December 31 2024 Mr. Wang held 99.90% of the equity interests in Mingde Holding. Therefore Mr. Wang shall be

deemed to be interested in the A Shares of the Company held by Mingde Holding under the SFO.

(4) Including (i) 122000 A Shares held by Mr. Ho Chit and (ii) 366000 options granted to Mr. Ho Chit under the 2022 Stock Option Incentive Plan.Annual Report 2024 S.F. Holding Co. Ltd. 077

Report of Directors

077

Interest in shares or underlying shares of the associated corporation of the Company

Percentage

Total number of the issued

Name of Director Number of of shares of share capital of

Supervisor Name of associated shares the associated the associated

and chief executive corporation Nature of interest Class of shares interested(1) corporation corporation(2)

Wang Wei Mingde Holding Beneficial owner Unlisted domestic shares 113286600 (L) 113400000 99.90%

Wang Wei SF Intra-city Interest in a controlled H shares 364738662 (L) 745610609 48.92%

corporation and others(2) Unlisted domestic shares 171764898 (L) 171764898 100.00%

Wang Wei KLN Interest in a controlled H shares 972698478 (L) 1807429342 53.82%

corporation and others(3)

Notes:

(1) The letter “L” denotes the person’s long position in the shares of the associated corporation.

(2) Including 171764898 H Shares and 171764898 domestic shares held by SF Taisen 75000000 H shares held by Beijing SF Intra-city Technology

Co. Ltd. (北京順豐同城科技有限公司) 117076764 H shares held by SF Holding (HK) and 897000 H shares held by Celestial Ocean Investment

Limited. Beijing SF Intra-city Technology Co. Ltd. is a non-wholly owned subsidiary of SF Technology while Celestial Ocean Investment Limited is

a wholly-owned subsidiary of SF Holding (HK) and both SF Technology and SF Holding (HK) are wholly-owned subsidiaries of SF Taisen. SF Taisen

is a wholly-owned subsidiary of our Company and therefore a non-wholly owned subsidiary of Mingde Holding which is held by Mr. Wang as to

approximately 99.90%. As such Mr. Wang is deemed to be interested in the shares of SF Intra-city which SF Taisen is deemed to be interested

in.

(3) Including the subscribed convertible interests in 41489361 shares of KLN which have been repurchased on January 27 2025 and 931209117

shares of KLN held by Flourish Harmony Holdings Company Limited which is an indirect wholly-owned subsidiary of the Company through Advance

Harmony Holdings Company Limited and SF Holding (HK). As such Mr. Wang is deemed to be interested in the shares of KLN which SF Holding

(HK) is deemed to be interested in.Save as disclosed above and so far as is known to the Directors Supervisors and chief executive of the Company as at December 31 2024

none of the Directors Supervisors or chief executive of the Company had or was deemed to have any other interests or short positions in the

Shares underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO)

(a) which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the

SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) which were

required pursuant to section 352 of the SFO to be entered in the register referred to therein; or (c) which were required to be notified to the

Company and the Hong Kong Stock Exchange pursuant to the Model Code.Directors Supervisors and Senior ManagementInformation about the details of the Directors Supervisors and senior management of the Company is set out in the section headed “DirectorsSupervisors and Senior Management”.Interests of Directors and Supervisors in Transaction Arrangement or Contract

The Directors and Supervisors have confirmed that other than business of the Group none of the Directors and Supervisors had a material

interest directly or indirectly in any transaction arrangement or contract of significance to the business of the Group to which the Company

or any of its subsidiaries was a party during the Reporting Period.Directors’ Service Contracts

The appointments are subject to the relevant provisions of the Company’s Articles of Association with regard to vacation of office of Directors

and Supervisors removal and retirement by rotation of Directors.Save for the respective contracts entered into by our Directors and Supervisors in respect of other management roles in the Group none of

our Directors or Supervisors has or is proposed to have a service contract with any member of our Group (other than contracts expiring or

determinable by the relevant employers within one year without the payment of compensation (other than statutory compensation)).078 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

Interests of Directors in Competing Number of

Business Region employees % of total

During the Relevant Period neither the Controlling Shareholders nor Mainland China 120234 81.7%

any of the Directors is considered to have interests in a business

apart from the business of the Group which competes or is likely Asia (excluding Mainland China) 23951 16.3%

to compete directly or indirectly with the Company’s business Other countries and regions 3004 2.0%

which would require disclosure under Rule 8.10 of the Listing

Rules of SEHK. Total 147189 100%

Rights to Purchase Shares or Debentures The following table sets forth the number of our full-time employees

of Directors Supervisors and Chief categorized by function as at December 31 2024:

Executive

Number of

Save as disclosed above neither the Company nor any of its Function employees % of total

subsidiaries was a party to any arrangements to enable the

Operational 83061 56.4%

Directors to acquire benefits by means of the acquisition of shares

in or debentures of the Company or any other body corporate at Professional(1) 38700 26.3%

any time during the year or at the end of the year.Management 25428 17.3%

Permitted Indemnity Provisions Total 147189 100%

Pursuant to the Articles of Association and subject to the applicable Note:

laws and regulations every Director shall be indemnified and

secured harmless out of the assets of the Company from and (1) Primarily including employees responsible for technology research

against all actions costs charges losses damages and expenses and development marketing and administration.which they or any of them shall or may incur or sustain by reason of

any act done concurred in or omitted in or about the execution of Equality and diversity

their duty in their offices. The Company has maintained appropriate

liability insurance for its Directors and senior management during The Board places a high value on equality and diversity in the

the Relevant Period. workplace. The Company is committed to providing equal

opportunities to all employees regardless of gender ethnicity

or any other personal characteristic. The Board believes that a

Employees diverse workforce is essential to the Company’s success and that it

enhances the Company’s ability to innovate and adapt to changing

People-centric culture promotes sustainable growth internally market conditions. To this end the Company has implemented

and customer bonding externally. The Company is dedicated to a number of programs and initiatives that promote equality and

creating a fair just and open environment for its employees. SF’s diversity.brand name stands for a platform for global shining talents to

realize their dreams seek excellence and achieve career pride. As at December 31 2024 female staff accounted for 22.4% of the

The Company attracts talents through a fair recruitment policy total number of employees in the Group. The Company will continue

and provides employees with training opportunities good career to pay attention to the cultivation of female talents promote gender

development prospects and growth opportunities. The Company diversity in the recruitment of middle and senior staff and provide

will continue to attract cultivate and retain highly motivated talents more development opportunities for female employees. For further

with diversity and build an energetic workforce by enriching the details please refer to the 2024 SF Holding Sustainability Report

Company’s talent pool. published by the Company.Overview

As at December 31 2024 the Group had 147189 full-time

employees around the world. The following table sets forth the

number of our full-time employees categorized by region as at

December 31 2024:Annual Report 2024 S.F. Holding Co. Ltd. 079

Report of Directors

079

Remuneration and Benefits Key Team Training

Upholding the remuneration concept of excellent performance Building on the foundation of providing training support for all

yielding fruitful payment SF sees value creation as a guideline employees in 2024 the Company conducted a systematic review

of incentive. For employees with high value contributions the of key teams to better align with business needs iterating and

Company provides a competitive remuneration system to ensure the implementing the talent training projects for these key teams.internal driving force for the Company’s sustainable development. For frontline employees: the training plans for groups such as

Remuneration is determined by employees’ position and its level couriers warehouse managers drivers customer service and sales

is market-oriented. At the same time through differentiated and staff were reviewed and improved. Training content was integrated

diversified long-term and short-term incentive mechanisms the into employees’ handheld work terminals in the form of behavioral

Company attracts and retains core talents and aligns their interests norms to enhance the effectiveness of practical skills training.with the interests of shareholders and the Company more closely Additionally continuous support was provided to help frontline

so as to drive the continuous growth of the long-term operation personnel improve their educational qualifications with a focus on

results of the Company. their long-term career development.Details of the remuneration of the Directors and the five highest paid For frontline management teams: training standards and plans were

individuals are set out in note 9(b) and note 9(c) to the consolidated iterated based on the knowledge and skills required for business

financial statements. scenarios. Multi-regional and group-specific activities such as

“Offline Boot Camps for Outlet Leaders” and “Demand ScenarioTrainings Live Rooms” were continuously conducted providing training

resources that better meet business needs through a blended onlineThe Company continues to uphold the concept that “talent is theand offline approach.primary productive force” and remains focusing on the growth and

development of its employees. In 2024 the Company’s training For middle management teams: scenario leadership training wasexpenses increased by 6% compared to 2023. A total of 736000 continuously carried out through the “Fengyun Plan – Reservetraining hours were conducted reaching 127000 participant Functional Department Head Training Program” and on-the-job

sessions. These efforts effectively supported the improvement training projects. Simultaneously key scenario training standards

of skills and capabilities of employees across various levels and and targeted training content were set based on business scenarios

positions. providing layered training from reserve to on-the-job levels ensuring

a sustainable and high-quality talent pipeline.Basic Training Resources and Platform Construction For senior management team: through differentiated empowerment

In 2024 the Company improved the management mechanism for strategies refined management and regular operational

training resources and the training platform providing all employees mechanisms a series of senior management training projects

with high-quality resources and channels for self-directed learning. were designed and implemented including the Beacon Training

Through an innovative market-oriented mechanism excellent Camp Fengxing Plan and Reserve Executive Training Bootcamp.instructors were selected and mobilized to participate in the For business organization executives the focus is on “industrydevelopment of high-quality courses. For example in the special transformation and business revitalization” helping managers

course development project for frontline outlet leaders a total of delve into key industries quickly replicate successful practices

696 instructors participated in the course development resulting and strengthen lean management concepts thereby supporting

in 205 high-quality courses. Additionally a new internal employee the comprehensive implementation of the Company’s strategic

learning app and training platform were launched providing a transformation. For functional department executives the focus

comprehensive and transparent training framework with clear is closely aligned with the Company’s strategic direction and

standards plans and resource allocation throughout the entire business needs enhancing business support effectiveness through

process. This clarified the Company’s learning expectation for customized learning and industry exchanges.employees and offered a vast array of learning resources for For professional teams: the focus is on constructing and

self-directed selection ensuring targeted skill improvement for operationalizing the special committee model optimizing the career

employees. development pathway for professional talents establishing job

qualification standards and learning maps for various positions

and providing high-quality learning resources to drive professional

talent development. Meanwhile tailored professional capability

development projects are implemented based on diverse employee

groups such as professional forums team professional lectures

and general foundational competence training to help employees

improve and refine their professional skills.080 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

Auditors Pricing

The procurement fees charged under the transactions subject to the

The consolidated financial statements for the year ended December

Employees Benefit Goods and Services Procurement Framework

31 2024 have been audited by PricewaterhouseCoopers. A

Agreement have been and will be determined on arm’s length

resolution regarding the appointment of an auditor of the Company

basis with reference to factors including (i) the fee and price quotes

for the year ending December 31 2025 will be proposed for

for similar services and goods in the market and with respect to

consideration in the 2024 annual general meeting of the Company.certain tailor-made services and products provided by Shenzhen

Fengxiang to us where there is limited supply of the same type of

Connected Transactions and Continuing services and products offered by any person or entity who is not a

Connected Transactions connected person of the Company within the meaning of the Listing

Rules of SEHK (“Independent Third Parties”) in the market the

The Group has conducted and is expected to continue to conduct degree of tailor-made and specifications required of such services

the below partially-exempt connected transactions during the year and products provided by Shenzhen Fengxiang; (ii) where relevant

ended December 31 2024 which are required to be disclosed in and appropriate the relevant costs incurred by Mingde Holding

this annual report in accordance with Rule 14A.71 of the Listing and its subsidiaries and companies in which Mingde Holding

Rules of SEHK: controls 30% or more of its voting power at general meetings

(the “Mingde Connected Persons”) in rendering such goods and

services including labor cost and administrative expenses; (iii)

Employees Benefit Goods and Services the volume of the service or the amount of goods purchased as

Procurement Framework Agreement applicable and appropriate; and/or (iv) the quality of the services

and goods offered by Shenzhen Fengxiang in the previous year as

The Company entered into a framework agreement with Shenzhen reflected from the feedback collected from our employees through

Fengxiang Information Technology Co. Ltd.* (深圳豐享信息技術 the appraisal system adopted. The price charged by Shenzhen

有限公司 “Shenzhen Fengxiang”) on December 28 2023 (the Fengxiang for the benefits platform services offered to us is also“Employees Benefit Goods and Services Procurement Framework comparable to the price charged by Shenzhen Fengxiang to itsAgreement”) which is valid for a term commencing on January 1 other independent customers with similar services requirements

2024 and ending on December 31 2026 and subject to renewal and Shenzhen Fengxiang has an internal price comparison system

for another three years upon parties’ mutual agreements. Shenzhen to compare the pricing of consumer merchandise sold on its

Fengxiang is controlled by the Company’s Controlling Shareholder benefits platform to the pricing on other e-commerce platforms.and hence Shenzhen Fengxiang is a connected person of the To ensure that the pricing of the services and goods provided by

Company and the transaction constituted a connected transaction the relevant Mingde Connected Persons is on normal commercial

under Chapter 14A of the Listing Rules of SEHK. terms fair and reasonable and in the interests of our Shareholders

Pursuant to the agreement the Group has been procuring from as a whole prior to entering into transactions with the relevant

Shenzhen Fengxiang and its subsidiaries and 30%-controlled Mingde Connected Persons we would conduct an assessment

entities certain types of goods and services for the purpose of our process whereby we will compare the pricing and terms of the

employee’s benefits including (i) information technology services services and goods offered by Shenzhen Fengxiang (and/or its

via the “Fengshi (豐食)” business system an online group catering subsidiaries and 30%-controlled entities) with those offered by

services platform offering enterprise customers staff meals and other suppliers.meals ordering services; (ii) software and hardware for our staff

canteen meal delivery services for our staff canteen and overtime Annual cap and actual amount

meal deliveries; (iii) operation development launch technology and

maintenance services in respect of the development and operation For the year ended December 31 2024 the actual transaction

of a tailor-made benefit platform for our employees; (iv) consumer amount with respect to the continuing connected transactions

merchandises for employees’ benefit purpose; (v) services for under the Employees Benefit Goods and Services Procurement

the planning organizing and implementing team building annual Framework Agreement was approximately RMB259 million and the

events training seminars tea sessions and other employees’ annual cap for the year ended December 31 2024 was RMB420

benefits events; and (vi) other related ancillary services and goods. million.Annual Report 2024 S.F. Holding Co. Ltd. 081

Report of Directors

081

Comprehensive Goods and Services The purpose of the Comprehensive Goods and Services

Procurement Framework Agreements is to enable the Company

Procurement Arrangements to among other things acquire reliable logistics goods in support

The Company entered into a comprehensive goods and its business.services procurement framework agreement with Fengtu Given that the Company procured goods and services that are

Technology (Shenzhen) Co. Ltd.* (豐圖科技(深圳)有限公司 used in our integrated logistics services from both Fengtu and Hive

“Fengtu”) on December 28 2023 (the “Fengtu Comprehensive Box under each of the Fengtu Comprehensive Goods and ServicesGoods and Services Procurement Framework Agreement”) and Procurement Framework Agreement and Hive Box Comprehensive

a comprehensive goods and services procurement framework Goods and Services Procurement Framework Agreement theagreement with Hive Box Holdings Limited (豐巢控股有限公司 “Hive transactions entered into with Fengtu and Hive Box are aggregatedBox”) on December 28 2023 (the “Hive Box Comprehensive Goods pursuant to Rule 14A.82(1) of the Listing Rules of SEHK.and Services Procurement Framework Agreement”) respectively(collectively the “Comprehensive Goods and Services ProcurementFramework Agreements”). Each of the Comprehensive Goods and Pricing

Services Procurement Framework Agreements is valid for a term The procurement fees charged under the Comprehensive Goods

commencing on January 1 2024 and ending on December 31 and Services Procurement Framework Agreements are determined

2026 and subject to renewal for another three years upon parties’ on arm’s length basis with reference to factors including where

mutual agreements. Both Fengtu and Hive Box are controlled relevant and appropriate (i) the fee and price quotes for similar

by the Company’s Controlling Shareholders and hence they goods and services in the market and with respect to certain

are connected persons of the Company and the transactions tailor-made services and products provided by Fengtu to us where

constituted connected transactions under Chapter 14A of the there is limited supply of the same type of services and products

Listing Rules of SEHK. offered by Independent Third Parties in the market the degree

Pursuant to the Fengtu Comprehensive Goods and Services of tailor-made and specifications required of such services and

Procurement Framework Agreement the Group will procure from products provided by Fengtu; (ii) where relevant and appropriate

Fengtu and its subsidiaries and 30%-controlled entities certain the relevant costs incurred by the relevant suppliers in rendering

types of goods and services including (i) certain services in such goods and services including labor cost and administrative

support of the operation and back-office functions of the Group expenses; (iii) with respect to the smart locker products and

including logistical mapping services and development launch services provided by the Hive Box Connected Persons the prices

technology and systems maintenance services in respect of the of similar products and services offered by the Hive Box Connected

mapping systems delivery and road safety risk management Persons to other logistics service providers; and/or (iv) the volume

technology services and services in respect of the development of the services or the amount of goods purchased.of other system solutions or project-based technology products

offered by Fengtu and its subsidiaries to support the Company’s Annual cap and actual amount

delivery services; (ii) certain goods in support of our operation and For the year ended December 31 2024 the actual transaction

back-office functions such as software and hardware equipment amount with respect to the continuing connected transactions under

from time to time sourced from Fengtu supplementary to the the Comprehensive Goods and Services Procurement Framework

vehicle system and the systems solutions we procure from Fengtu Agreements was approximately RMB487 million and the annual

(including services in respect of the installation and maintenance cap for the year ended December 31 2024 was RMB710 million.of the same); and (iii) other ancillary services and goods in relation

to (i) and (ii) above.Integrated Logistics Services Provision

Pursuant to the Hive Box Comprehensive Goods and Services Arrangements

Procurement Framework Agreement the Group will procure from

Hive Box and companies in which Hive Box controls 30% or The Company entered into an integrated logistics services provision

more of its voting power at general meetings certain types of framework agreement with Shenzhen Fengxiang on Decembergoods and services including (i) certain services in support of the 28 2023 (the “Fengxiang Integrated Logistics Services Provisionoperation of the Group’s logistics services business including Framework Agreement”) pursuant to which the Group will provide

drop-off and pick-up smart locker services delivery-related to Shenzhen Fengxiang and its subsidiaries and 30%-controlled

services e-commerce platform services project-based research entities certain types of integrated logistics services that they would

and development services and advertising services provided by require in their respective ordinary course of business including

Hive Box and companies in which Hive Box controls 30% or more logistics services transportation and delivery services freightof its voting power at general meetings (the “Hive Box Connected delivery services warehousing and storage services and otherPersons”); (ii) certain goods in support of our business operations related ancillary services.such as smart lockers and delivery boxes from time to time sourced

from the Hive Box Connected Persons; and (iii) other ancillary

services and goods in relation to (i) and (ii) above.082 S.F. Holding Co. Ltd. Annual Report 2024

Report of Directors

The Company entered into an integrated logistics services provision Review of the Continuing Connected

framework agreement with Hive Box on December 28 2023 (the“Hive Box Integrated Logistics Services Provision Framework TransactionsAgreement” together with the Fengxiang Integrated Logistics

The independent non-executive Directors have reviewed the aboveServices Provision Framework Agreement the “Integrated Logisticspartially-exempt continuing connected transactions and confirmedServices Provision Framework Agreements”) pursuant to which

that these transactions have been entered into:

the Group will provide to Hive Box and its subsidiaries and

30%-controlled entities certain types of integrated logistics services 1. in the ordinary and usual course of business of the Group;

including logistics services (such as delivery services in respect of

return of goods by customers of certain e-commerce platforms 2. on normal commercial terms or on terms no less favourable

using smart lockers operated by the Hive Box Connected Persons) to the Group than terms available to or from (as appropriate)

transportation and delivery services freight delivery services independent third parties; and

warehousing and storage services and other related ancillary 3. in accordance with the relevant agreements governing such

services. transactions and on terms that are fair and reasonable and in

Each of the Integrated Logistics Services Provision Arrangements the interests of the Shareholders as a whole.is valid for a term commencing on January 1 2024 and ending on In accordance with Hong Kong Standard on AssuranceDecember 31 2026 and subject to renewal for another three years Engagements 3000 (Revised) “Assurance Engagements Otherupon parties’ mutual agreements. Both Shenzhen Fengxiang and than Audits or Reviews of Historical Financial Information” andHive Box are controlled by the Company’s Controlling Shareholders with reference to Practice Note 740 (Revised) “Auditor’s Letterand hence they are connected persons of the Company and the on Continuing Connected Transactions under the Listing Rulestransactions constituted connected transactions under Chapter 14A of SEHK” issued by the HKICPA PricewaterhouseCoopers the

of the Listing Rules of SEHK. auditor of the Company has sent a letter to the Board based on its

The purpose of the Integrated Logistics Services Provision review of the above-mentioned continuing connected transactions

Arrangements is to provide comprehensive and high-quality services expressing the following opinions in respect of the disclosed

to Shenzhen Fengxiang and Hive Box considering the market continuing connected transactions:

positions and broad services network of the Group. 1. nothing has come to their attention that causes them to believe

Given that the Company provided integrated logistics services that the disclosed continuing connected transactions have not

to both Shenzhen Fengxiang and Hive Box under each of the been approved by the Board;

Fengxiang Integrated Logistics Services Provision Framework 2. for transactions involving the provision of goods or services

Agreement and Hive Box Integrated Logistics Services Provision by the Group nothing has come to their attention that causes

Framework Agreement the transactions entered into with Shenzhen them to believe that the disclosed continuing connected

Fengxiang and Hive Box are aggregated pursuant to the Rule transactions were not conducted in all material respects in

14A.82(1) of the Listing Rules of SEHK. accordance with the pricing policies of the Group;

3. nothing has come to their attention that causes them to believe

Pricing

that the disclosed continuing connected transactions were not

The fees we charge Shenzhen Fengxiang and its subsidiaries and entered into in all material respects in accordance with the

30%-controlled entities (the “Fenxiang Connected Persons”) and/ relevant agreements governing such transactions; and

or the Hive Box Connected Persons in respect of our provision of

4. with respect to the aggregate amount of each of the above

integrated logistics services described above will be (i) in the range

continuing connected transactions nothing has come to their

of applicable price we charge Independent Third Party customers

attention that causes them to believe that the disclosed

which are strategic customers of the Group; (ii) determined in

continuing connected transactions have exceeded the annual

accordance with the prevailing market rates taking into account the

caps as set by the Company.volume of business and our premium position within the industry;

and (iii) charged with reference to the weight and type of parcel Pursuant to Rule 14A.72 of the Listing Rules of SEHK the

or cargo delivered mode of parcel pick-up delivery or shipment Company would like to confirm that the details of the related party

freight rate of the carrier and type of storage space required as transactions under applicable accounting standards are set out

applicable. in note 38 to the consolidated financial statements in this annual

report. Save for the connected transactions disclosed above none

Annual cap and actual amount of the related party transactions as disclosed under note 38 to the

consolidated financial statements in this annual report constitutes

For the year ended December 31 2024 the transaction amount a connected transaction or continuing connected transaction that

with respect to the continuing connected transactions under is subject to among other things reporting announcement or

the Integrated Logistics Services Provision Arrangements was independent shareholders’ approval requirements under Chapter

approximately RMB1507 million and the annual cap for the year 14A of the Listing Rules of SEHK.ended December 31 2024 was RMB1815 million.Annual Report 2024 S.F. Holding Co. Ltd. 083

Report of Directors

083

Compliance with the CG Code Subsequent Events

Please refer to the section headed “Corporate Governance Report” The material events after the Relevant Period are set out in note

on pages 56 to 67 in the Report. 41 to the consolidated financial statements in this annual report.Environment Social and Governance

Please refer to the 2024 SF Holding Sustainability Report separately On behalf of the Board

released on the same day as this annual report.Wang Wei

Donation Chairman and General Manager

PRC

During the year ended December 31 2024 the Group made

charitable donations of RMB71.8 million. March 28 2025084 S.F. Holding Co. Ltd. Annual Report 2024

Independent Auditor’s Report

To the Shareholders of S.F. Holding Co. Ltd. Basis for Opinion

(incorporated in the People’s Republic of China with limited liability)

We conducted our audit in accordance with International Standards

on Auditing (“ISAs”). Our responsibilities under those standards are

Opinion further described in the Auditor’s Responsibilities for the Audit of

the Consolidated Financial Statements section of our report.What we have audited We believe that the audit evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.The consolidated financial statements of S.F. Holding Co. Ltd. (the

“Company”) and its subsidiaries (the “Group”) which are set out on Independence

pages 88 to 184 comprise:

We are independent of the Group in accordance with the

* the consolidated statement of financial position as at December

International Code of Ethics for Professional Accountants (including

312024;

International Independence Standards) issued by the International

* the consolidated statement of profit or loss for the year then Ethics Standards Board for Accountants (“IESBA Code”) and we

ended; have fulfilled our other ethical responsibilities in accordance with

the IESBA Code.* the consolidated statement of other comprehensive income for

the year then ended;

* the consolidated statement of changes in equity for the year Key Audit Matters

then ended;

Key audit matters are those matters that in our professional

* the consolidated statement of cash flows for the year then judgment were of most significance in our audit of the consolidated

ended; and financial statements of the current period. These matters were

addressed in the context of our audit of the consolidated financial

* the notes to the consolidated financial statements comprising statements as a whole and in forming our opinion thereon and we

material accounting policy information and other explanatory do not provide a separate opinion on these matters.information.Key audit matters identified in our audit are summarised as follows:

Our opinion * Goodwill impairment assessment for KLN Logistics Group

Limited (“KLN”) cash-generating unites (“CGUs”) and Fenghao

In our opinion the consolidated financial statements give a true and

Supply Chain (“Fenghao”) CGUs

fair view of the consolidated financial position of the Group as at

December 31 2024 and of its consolidated financial performance * Revenue recognition of logistics and freight forwarding services

and its consolidated cash flows for the year then ended in

accordance with IFRS Accounting Standards and have been

properly prepared in compliance with the disclosure requirements

of the Hong Kong Companies Ordinance.Annual Report 2024 S.F. Holding Co. Ltd. 085

Independent Auditor’s Report

085

Key Audit Matter How our audit addressed the Key Audit Matter

Goodwill impairment assessment for KLN CGUs and Fenghao Our procedures in relation to goodwill impairment assessment for KLN

Supply Chain CGUs CGUs and Fenghao CGUs included:

Refer to notes 2.1(e)(i) 4.1(c) and 17 to the consolidated financial

statements. * Understood evaluated and tested management’s controls over

goodwill impairment assessment.As at December 31 2024 the Group had significant goodwill

balance for KLN CGUs and Fenghao CGUs amounting to RMB6139 * Assessed the reasonableness of management’s identification

million and RMB3185 million respectively. of KLN CGUs and Fenghao CGUs based on the understanding

and evaluation of the Group’s business plans relevant to KLN

Management has engaged independent external valuers to assist CGUs and Fenghao CGUs and checked to the evidence which

them in performing annual goodwill impairment assessment on KLN supported these plans.CGUs and Fenghao CGUs. Management determined the recoverable

amounts of the KLN CGUs and Fenghao CGUs based on value * Understood and evaluated the methods used by management to

in use (“VIU”) which is the present value of the future cash flows determine the allocation of goodwill for KLN CGUs and Fenghao

expected to be derived from each CGUs. Based on the results of CGUs and tested the accuracy of mathematical calculation

the impairment assessments conducted management considered applied in the methods.no impairment was necessary in respect of above goodwill as at

December 31 2024. * Evaluated the competence capability and objectivity of the

independent external valuers engaged by management.The determination of the present value of the future cash flows

expected to be derived from each CGUs involves key assumptions * Obtained the valuation reports of goodwill impairment assessment

including revenue growth rate over the forecast period terminal for KLN CGUs and Fenghao CGUs issued by the independent

revenue growth rate margin of earnings before interest and external valuers and with the assistance of our internal valuation

taxes and pre-tax discount rates which are subject to significant experts:

management’s judgements and estimates.

(1) evaluated the appropriateness of the valuation methodologies

We focused on this area due to the magnitude of above goodwill used in the valuation reports of goodwill impairment

balances and the fact that significant estimates and judgments were assessment.involved in the goodwill impairment assessment.

(2) compared the current year actual results of above mentioned

CGUs with the prior year’s financial forecasts to assess the

effectiveness of management’s estimation process;

(3) assessed the reasonableness of key assumptions applied in

the present value of future cash flow projections including

revenue growth rate over the forecast period terminal

revenue growth rate margin of earnings before interest

and taxes and pre-tax discount rate by comparing them

with historical financial performance future business plan

comparable external economic and industry information etc.

(4) tested the accuracy of mathematical calculations applied in

the process of goodwill impairment assessment;

(5) assessed management’s sensitivity analysis on the key

assumptions to evaluate the potential impacts on the

recoverable amounts.Based on the procedures performed above we considered that

the significant estimates and judgments used in the impairment

assessments of KLN CGUs and Fenghao CGUs by management were

supported by the evidence obtained.086 S.F. Holding Co. Ltd. Annual Report 2024

Independent Auditor’s Report

Key Audit Matter How our audit addressed the Key Audit Matter

Revenue recognition of logistics and freight forwarding services Our procedures in relation to revenue recognition of logistics and

Refer to notes 2.1(j) and 5 to the consolidated financial statements. freight forwarding services included:

The Group derives revenue primarily from provision of logistics * understood the business model and process of logistics and

and freight forwarding services which amounted to approximately freight forwarding services checked contract terms of the

RMB276276 million for the year ended December 31 2024 service agreements with customers on a sampling basis and

accounting for 97.27% of the Group’s total revenue. assessed whether the accounting policies for revenue recognition

adopted by the Group are compliant with the requirements of the

Revenue is recognized with the amount of consideration to which the applicable accounting standards.Group expects to be entitled when or as the control of the services

is transferred to a customer. The huge volume of transactions * understood evaluated and tested management’s internal controls

involved in the Group’s provision of logistics and freight forwarding over the revenue recognition of the logistics and freight forwarding

services are processed and recorded by the Group’s information service including understood evaluated and tested information

technology systems. technology general controls and application controls with the

assistance of our internal information technology specialists.We focused on this area because we spent significant audit efforts

in this area due to the large magnitude of the revenue from logistics * tested on a sampling basis the sales transactions of logistics

and freight forwarding services huge volume of transactions and freight forwarding services by examining relevant supporting

and complexity of the Group’s systems for processing these documents including service agreements customer-confirmed

transactions. receipts or records of delivery invoices and cash receipts etc..* tested sales transactions that took place shortly before and after

the balance sheet date on a sampling basis by tracing to the

supporting documents to assess whether revenue of logistics and

freight forwarding services was recognised in the correct reporting

period.Based on the procedures performed above we considered that the

Group’s logistics and freight forwarding services revenue recognition

was supported by the evidence obtained.Other Information

The directors of the Company are responsible for the other information. The other information comprises all of the information included in the

annual report other than the consolidated financial statements and our auditor’s report thereon.Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance

conclusion thereon.In connection with our audit of the consolidated financial statements our responsibility is to read the other information and in doing so

consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the

audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to

report that fact. We have nothing to report in this regard.Responsibilities of Directors and Those Charged with Governance for the

Consolidated Financial Statements

The directors of the Company are responsible for the preparation of the consolidated financial statements that give a true and fair view in

accordance with IFRS Accounting Standards and the disclosure requirements of the Hong Kong Companies Ordinance and for such internal

control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material

misstatement whether due to fraud or error.In preparing the consolidated financial statements the directors are responsible for assessing the Group’s ability to continue as a going

concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless the directors

either intend to liquidate the Group or to cease operations or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Group’s financial reporting process.Annual Report 2024 S.F. Holding Co. Ltd. 087

Independent Auditor’s Report

087

Auditor’s Responsibilities for the * Evaluate the overall presentation structure and content of the

consolidated financial statements including the disclosures

Audit of the Consolidated Financial and whether the consolidated financial statements represent

Statements the underlying transactions and events in a manner that

achieves fair presentation.Our objectives are to obtain reasonable assurance about whether

the consolidated financial statements as a whole are free from * Plan and perform the group audit to obtain sufficient appropriate

material misstatement whether due to fraud or error and to issue audit evidence regarding the financial information of the entities

an auditor’s report that includes our opinion. We report our opinion or business units within the Group as a basis for forming an

solely to you as a body and for no other purpose. We do not opinion on the consolidated financial statements. We are

assume responsibility towards or accept liability to any other person responsible for the direction supervision and review of the audit

for the contents of this report. Reasonable assurance is a high level work performed for purposes of the group audit. We remain

of assurance but is not a guarantee that an audit conducted in solely responsible for our audit opinion.accordance with ISAs will always detect a material misstatement We communicate with those charged with governance

when it exists. Misstatements can arise from fraud or error and are regarding among other matters the planned scope and

considered material if individually or in the aggregate they could timing of the audit and significant audit findings including

reasonably be expected to influence the economic decisions of any significant deficiencies in internal control that we identify

users taken on the basis of these consolidated financial statements. during our audit.As part of an audit in accordance with ISAs we exercise We also provide those charged with governance with

professional judgment and maintain professional scepticism a statement that we have complied with relevant ethical

throughout the audit. We also: requirements regarding independence and to communicate

* Identify and assess the risks of material misstatement of the with them all relationships and other matters that may

consolidated financial statements whether due to fraud or reasonably be thought to bear on our independence and where

error design and perform audit procedures responsive to applicable actions taken to eliminate threats or safeguards

those risks and obtain audit evidence that is sufficient and applied.appropriate to provide a basis for our opinion. The risk of From the matters communicated with those charged with

not detecting a material misstatement resulting from fraud is governance we determine those matters that were of most

higher than for one resulting from error as fraud may involve significance in the audit of the consolidated financial statements

collusion forgery intentional omissions misrepresentations or of the current period and are therefore the key audit matters.the override of internal control. We describe these matters in our auditor’s report unless law

* Obtain an understanding of internal control relevant to the or regulation precludes public disclosure about the matter or

audit in order to design audit procedures that are appropriate when in extremely rare circumstances we determine that a

in the circumstances but not for the purpose of expressing an matter should not be communicated in our report because

opinion on the effectiveness of the Group’s internal control. the adverse consequences of doing so would reasonably

be expected to outweigh the public interest benefits of such

* Evaluate the appropriateness of accounting policies used communication.and the reasonableness of accounting estimates and related

disclosures made by the directors. The engagement partner on the audit resulting in this

independent auditor’s report is Mr. Lam Sung Wan.* Conclude on the appropriateness of the directors’ use of the

going concern basis of accounting and based on the audit

evidence obtained whether a material uncertainty exists related

to events or conditions that may cast significant doubt on the

Group’s ability to continue as a going concern. If we conclude

that a material uncertainty exists we are required to draw

attention in our auditor’s report to the related disclosures in

the consolidated financial statements or if such disclosures are

inadequate to modify our opinion. Our conclusions are based PricewaterhouseCoopers

on the audit evidence obtained up to the date of our auditor’s Certified Public Accountants

report. However future events or conditions may cause the

Group to cease to continue as a going concern. Hong Kong March 28 2025088 S.F. Holding Co. Ltd. Annual Report 2024

Consolidated Statement of Profit or Loss

For the year ended December 31 2024

Year ended December 31

Note 2024 2023

RMB’000 RMB’000

Revenue 5 284420059 258409403

Cost of revenue 8 (245524112) (225775678)

Gross profit 38895947 32633725

Selling and marketing expenses 8 (3096242) (2991589)

General and administrative expenses 8 (18732335) (17766049)

Research and development expenses 8 (2533607) (2285314)

Net (impairment losses)/reversal of impairment losses on

financial assets and contract assets 3 (271693) 33480

Other income 6 989740 2281202

Other gains net 7 368873 408474

Operating profit 15620683 12313929

Finance income 10 617713 633373

Finance costs 10 (2373319) (2269700)

Finance costs net (1755606) (1636327)

Share of loss of associates and joint ventures net 20 (70020) (67190)

Impairment provision for investments in associates and joint ventures 20 (187796) (123907)

Profit before income tax 13607261 10486505

Income tax expense 11 (3388416) (2574896)

Profit for the year 10218845 7911609

Attributable to:

– Owners of the Company 10170427 8234493

– Non-controlling interests 48418 (322884)

102188457911609

Earnings per share for profit attributable to the owners of the Company: 13

– Basic (RMB) 2.11 1.70

– Diluted (RMB) 2.11 1.70

The above consolidated statements of profit or loss should be read in conjunction with the accompanying notes.Annual Report 2024 S.F. Holding Co. Ltd. 089

Consolidated Statement of Other Comprehensive Income

For the year ended December 31 2024

089

Year ended December 31

20242023

RMB’000 RMB’000

Profit for the year 10218845 7911609

Other comprehensive income:

Items that may be reclassified to profit or loss

– Effective portion of changes in fair value of hedging instruments arising during the year 8644 12002

– Share of other comprehensive income of associates and joint ventures accounted

for using the equity method (1077) (5254)

– Currency translation differences of foreign operations 110885 334708

Items that will not be reclassified to profit or loss

– Fair value changes of equity investments designated at fair value through other

comprehensive income (1553885) 484100

– Share of other comprehensive income of associates and joint ventures accounted

for using the equity method – (329)

– Income tax effect 3899 2749

Other comprehensive (loss)/income for the year net of tax (1431534) 827976

Total comprehensive income for the year 8787311 8739585

Attributable to:

– Owners of the Company 9136451 9107526

– Non-controlling interests (349140) (367941)

87873118739585

The above consolidated statements of other comprehensive income should be read in conjunction with the accompanying notes.090 S.F. Holding Co. Ltd. Annual Report 2024

Consolidated Statement of Financial Position

As at December 31 2024

As at December 31

Note 2024 2023

RMB’000 RMB’000

ASSETS

Non-current assets

Property plant and equipment 14 59174305 60104416

Right-of-use assets 15 19625629 20890047

Investment properties 16 7241199 6418720

Intangible assets 17 20036193 21030998

Deferred tax assets 18 2291994 2263870

Prepayments other receivables and other assets 19 1855035 2333562

Investments in associates and joint ventures 20 6203642 7378831

Financial assets at fair value through other comprehensive income 21 8231994 9489535

Financial assets at fair value through profit or loss 21 477416 589996

Total non-current assets 125137407 130499975

Current assets

Inventories 22 2432383 2440425

Contract assets 23 2740820 1632592

Trade and note receivables 24 27981633 25360433

Prepayments other receivables and other assets 19 10114543 12622706

Financial assets at fair value through other comprehensive income 21 170913 99978

Financial assets at fair value through profit or loss 21 11246156 6809742

Restricted cash 25 1354303 1576496

Cash and cash equivalents 25 32646055 40448308

Total current assets 88686806 90990680

Total assets 213824213 221490655Annual Report 2024 S.F. Holding Co. Ltd. 091

Consolidated Statement of Financial Position

As at December 31 2024

091

As at December 31

Note 2024 2023

RMB’000 RMB’000

LIABILITIES

Non-current liabilities

Borrowings 26 26319260 30396912

Lease liabilities 15 7094483 8038495

Deferred tax liabilities 18 4414485 4550974

Other payables and accruals 29 201037 140329

Deferred income 30 1266359 1090644

Total non-current liabilities 39295624 44217354

Current liabilities

Trade and note payables 27 27395524 24914300

Contract liabilities 28 2039198 1832018

Borrowings 26 18365122 22309103

Lease liabilities 15 5501314 5769965

Financial liabilities at fair value through profit or loss 105464 92120

Income tax payable 1679132 1394250

Other payables and accruals 29 17061331 17637171

Advances from customers 46283 40714

Total current liabilities 72193368 73989641

Total liabilities 111488992 118206995

Net assets 102335221 103283660092 S.F. Holding Co. Ltd. Annual Report 2024

Consolidated Statement of Financial Position

As at December 31 2024

As at December 31

Note 2024 2023

RMB’000 RMB’000

EQUITY

Share capital 31 4986187 4895202

Less: treasury shares 31 (758081) (2575532)

Reserves 32 48624934 51634675

Retained earnings 39140246 38835999

Equity attributable to owners of the Company 91993286 92790344

Non-controlling interests 10341935 10493316

Total equity 102335221 103283660

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.The financial statements on pages 88 to 184 were approved by the Board of Directors on March 28 2025 and were signed on its behalf.WANG Wei HO Chit

Chairman DirectorAnnual Report 2024 S.F. Holding Co. Ltd. 093

Consolidated Statement of Changes in Equity

For the year ended December 31 2024

093

Attributable to owners of the Company

Less: Non-

Share Treasury Reserves Retained controlling

capital shares (Note 32) earnings Total interests Total equity

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at January 1 2024 4895202 (2575532) 51634675 38835999 92790344 10493316 103283660

Comprehensive income:

Profit for the year – – – 10170427 10170427 48418 10218845

Other comprehensive loss – – (1033976) – (1033976) (397558) (1431534)

Total comprehensive (loss)/income – – (1033976) 10170427 9136451 (349140) 8787311

Transfer of gain on disposal of equity

investments at fair value through other

comprehensive income to retained

earnings – – 31036 (31036) – – –

Transactions with owners

Net proceeds from Global Offering 170000 – 5076004 – 5246004 – 5246004

Net proceeds from share option exercising 276 – 11194 – 11470 – 11470

Capital injection from non-controlling

interests – – 54 – 54 35182 35236

Repurchase of shares – (1758094) – – (1758094) – (1758094)

Cancellation of shares (79291) 3575545 (3496254) – – – –

Share-based payment – – 89677 – 89677 1769 91446

Transaction with non-controlling interests

and others – – (3916204) – (3916204) 514655 (3401549)

Profit appropriations to statutory reserve – – 232352 (232352) – – –

Dividends – – – (9602792) (9602792) (353847) (9956639)

Safety reserve appropriation – – 481331 – 481331 – 481331

Safety reserve utilisation – – (481331) – (481331) – (481331)

Others – – (3624) – (3624) – (3624)

As at December 31 2024 4986187 (758081) 48624934 39140246 91993286 10341935 102335221094 S.F. Holding Co. Ltd. Annual Report 2024

Consolidated Statement of Changes in Equity

For the year ended December 31 2024

Attributable to owners of the Company

Less: Non-

Share Treasury Reserves Retained controlling

capital shares (Note 32) earnings Total interests Total equity

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at January 1 2023 4895202 (2040377) 50037565 33371351 86263741 12022308 98286049

Comprehensive income:

Profit/(loss) for the year – – – 8234493 8234493 (322884) 7911609

Other comprehensive loss/(income) – – 873033 – 873033 (45057) 827976

Total comprehensive (loss)/income – – 873033 8234493 9107526 (367941) 8739585

Transfer of gain on disposal of equity

investments at fair value through other

comprehensive income to retained

earnings – – 121368 (121368) – – –

Transactions with owners

Capital contribution of non-controlling

interests – – 1207 – 1207 146845 148052

Repurchase of shares – (959956) – – (959956) – (959956)

Exercise of share options – 424801 (69612) – 355189 – 355189

Share-based payment – – 271510 – 271510 37828 309338

Transaction with non-controlling interests

and others – – (1037241) – (1037241) (799597) (1836838)

Non-controlling interests on acquisition

of subsidiaries – – – – – 47904 47904

Appropriation to general and

regulatory reserves – – 31328 (31328) – – –

Profit appropriations to statutory reserve – – 1403533 (1403533) – – –

Dividends – – – (1213616) (1213616) (596065) (1809681)

Safety reserve appropriation – – 389332 – 389332 – 389332

Safety reserve utilisation – – (389332) – (389332) – (389332)

Others – – 1984 – 1984 2034 4018

As at December 31 2023 4895202 (2575532) 51634675 38835999 92790344 10493316 103283660

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.Annual Report 2024 S.F. Holding Co. Ltd. 095

Consolidated Statement of Cash Flows

For the year ended December 31 2024

095

Year ended December 31

Note 2024 2023

RMB’000 RMB’000

Cash flows from operating activities

Cash generated from operations 34(a) 35364389 29796205

Income tax paid (3178016) (3226386)

Net cash generated from operating activities 32186373 26569819

Cash flows from investing activities

Redemption of financial assets at fair value through profit or loss 86145328 93433282

Disposal of financial assets at fair value through other comprehensive

income 8451 162780

Proceeds from sales of associates and joint ventures 620980 468039

Repayment from former subsidiaries 316655 –

Investment gains or dividend income from financial assets at fair

value through profit or loss 650582 604161

Dividends received from associates and joint ventures 183401 192475

Investment gains or dividend income from financial assets at fair

value through other comprehensive income 20168 1998

Proceeds from disposal of property plant and equipment and

other non-current assets 309784 335828

Disposal of subsidiaries net of cash and cash equivalents held by

subsidiaries at the disposal dates 261058 384332

Purchase of property plant and equipment and other non-current assets (9344770) (12471899)

Acquisition of financial assets at fair value through other comprehensive

income (49750) (275165)

Acquisition of financial assets at fair value through profit or loss (90451596) (93974775)

Acquisition of associates and joint ventures (28381) (169265)

Acquisition of subsidiaries net of cash and cash equivalents held

by subsidiaries at the acquisition dates 35 (696654) (2197408)

Net cash used in investing activities (12054744) (13505617)096 S.F. Holding Co. Ltd. Annual Report 2024

Consolidated Statement of Cash Flows

For the year ended December 31 2024

Year ended December 31

Note 2024 2023

RMB’000 RMB’000

Cash flows from financing activities

Proceeds from issue of shares 5323198 –

Capital injection from non-controlling interests 30226 157080

Exercise of share options – 355189

Drawdown of bank borrowings 31847545 32543231

Drawdown of loans from non-controlling interests – 44287

Proceeds from corporate bonds and short-term debentures 4296638 1499553

Net cash consideration received from non-controlling interests

without change of control 1193 –

Deposits received from lessors after the expiry of lease contracts 12023 6703

Repayment of bank borrowings (42276973) (22365788)

Repayment of corporate bonds and short-term debentures (2785271) (10110178)

Repayment of loans from holders of asset-backed securities scheme – (899360)

Repayment of loans from non-controlling interests (2624) (31478)

Dividend paid to non-controlling interests (324348) (599379)

Dividend paid 12 (9602792) (1213616)

Interests paid (1818720) (1820066)

Net cash consideration paid to non-controlling interests without

change of control 34(b) (3451076) (1833285)

Payments for repurchase of shares 31 (1758094) (959956)

Payments of lease liabilities 34(d) (7438385) (7765246)

Payment of transaction costs related to financing activities (31653) (2376)

Net cash used in financing activities (27979113) (12994685)

Net (decrease)/increase in cash and cash equivalents (7847484) 69517

Cash and cash equivalents at beginning of the year 40448308 40279947

Exchange gains on cash and cash equivalents 45231 98844

Cash and cash equivalents at end of the year 32646055 40448308

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.Annual Report 2024 S.F. Holding Co. Ltd. 097

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

097

1. General information KEX Express (Thailand) Public Company Limited (“KEX”) an

indirect non-wholly-owned subsidiary of the Company is a listed

S.F. Holding Co. Ltd. (hereinafter “S.F. Holding” or “the Company”) company on the Main Board of the Stock Exchange of Thailand

formerly known as Ma’anshan Dingtai Science & Technology Co. Limited (“SET”) and primarily engaged in providing domestic and

Ltd. was established by 11 natural persons including Liu Jilu and international parcel delivery service.the Labour Union of Ma’anshan Dingtai Metallic Products Co. Ltd. The consolidated financial statements are presented in Renminbi

by cash contribution on May 22 2003. On October 22 2007 the (“RMB”) and all values are rounded to the nearest thousand

Company officially changed to Ma’anshan Dingtai Rare Earth and (RMB’000) except when otherwise indicated.New Materials Co. Ltd. and issued additional 19.5 million shares

to the public and listed with trading on Shenzhen Stock Exchange

(hereinafter “SZSE”) on February 5 2010. 2. Summary of Accounting Policies

In December 2016 approved by China Securities Regulatory This note provides a list of principal accounting policies adopted in

Commission the Company conducted a series of material asset the preparation of these consolidated financial statements. These

restructuring arrangements including entering into a material asset policies have been consistently applied to all the years presented

swap and share subscription agreement. Upon the completion of unless otherwise stated.material asset restructuring Shenzhen Mingde Holding Development

Co. Ltd. (“Mingde Holding”) became the parent company and

ultimate controlling company of the Company and Mr. Wang Wei 2.1 Summary of material accounting

was the ultimate controlling shareholder. policies

On November 27 2024 the Company issued 170000000 H

Shares to the public and listed with trading on the Stock Exchange (a) Basis of preparation

of Hong Kong Limited (“HKEx”). The consolidated financial statements of the Group have been

As at December 31 2024 the Company had 4986186983 shares prepared in accordance with all applicable International Financial

issued and outstanding of which 4816186983 shares were listed Reporting Standards as issued by the International Accounting

“”

on the SZSE (“A-shares”) and 170000000 shares were listed on Standards Board ( IFRS Accounting Standards ) and requirements

the HKEx. of the Hong Kong Companies Ordinance.The address of the Company’s registered office is 3/F Complex The consolidated financial statements have been prepared on a

Building SF South China Transit Center No. 1111 Hangzhan historical cost basis except for financial assets at fair value through

4th Road Shenzhen Airport Caowei Community Hangcheng other comprehensive income and financial assets and financial

Sub-district Bao’an District Shenzhen. The Company is an liability at fair value through profit or loss which are carried at fair

investment holding company. The Company and its subsidiaries value.(collectively the “Group”) are principally engaged in the development The preparation of consolidated financial statements in conformity

of logistics ecosystem including express delivery freight delivery with IFRS Accounting Standards requires the use of certain critical

cold chain and pharmaceutical logistics intra-city on-demand accounting estimates. It also requires management to exercise

delivery international logistics service and supply chain solutions its judgement in the process of applying the Group’s accounting

in the People’s Republic of China (the “PRC”). policies. The areas involving a higher degree of judgement or

Hangzhou SF Intra-city Industrial Co. Ltd. an indirect non-wholly complexity or areas where assumptions and estimates are

owned subsidiary of the Company is a listed company on the Main significant to the consolidated financial statements are disclosed

Board of the HKEx and primarily engaged in intra-city on-demand in Note 4.delivery services.KLN Logistics Group Limited (“KLN” formerly Kerry Logistics

Network Limited) an indirect non-wholly-owned subsidiary of the

Company is a listed company on the Main Board of the HKEx and

primarily engaged in the provision of logistics and freight forwarding

services.098 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

2. Summary of Accounting Policies (Continued)

2.1 Summary of material accounting policies (Continued)

(b) New standards and interpretations

(i) New standards and interpretations not yet adopted

Standards amendments and interpretations that have been issued but not yet effective and have not been early adopted by the Group are

as follows:

Effective for annual periods

beginning on or after

Amendments to IAS 21 Lack of Exchangeability January 1 2025

Amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments January 1 2026

Annual Improvements Annual Improvements to IFRS Accounting Standards – Volume 11 January 1 2026

IFRS 18 Presentation and Disclosure in Financial Statements January 1 2027

IFRS 19 Subsidiaries without Public Accountability: Disclosures January 1 2027

Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its To be determined

Associate or Joint Venture

The Group has already commenced an assessment of the impact of these new or revised standards and amendments certain of which are

relevant to the Group’s operations. According to the preliminary assessment made by the directors no significant impact on the financial

performance and positions of the Group is expected when they become effective except for certain presentation adjustment might be raised

due to the adoption of IFRS18.(ii) New standard and amendments to standards adopted and changes in accounting policy

The following new standard and amendments to standards have been adopted by the Group for the financial year beginning on January 1 2024:

Amendments to IAS 1 Classification of Liabilities as Current or Non-current

Amendments to IAS 1 Non-current liabilities with Covenants

Amendments to IAS 7 and IFRS 7 Supplier Finance Arrangements

Amendments to IFRS 16 Lease Liability in a sales and leaseback

The adoption of these new and amended standards does not have significant financial impact on the consolidated financial statements.(c) Associates and Joint arrangements

Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the

Group holds between 20% and 50% of the voting rights.Investments in associates are accounted for using the equity method of accounting (Note 2.2(b)) after initially being recognized at cost.Under IFRS 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights

and obligations of each investor.Interests in joint ventures are accounted for using the equity method (Note 2.2(b)) after initially being recognized at cost in the consolidated

statement of financial position.Annual Report 2024 S.F. Holding Co. Ltd. 099

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

099

2. Summary of Accounting Policies Acquisition-related costs are expensed as incurred.

(Continued) The excess of the consideration transferred amount of any

non-controlling interest in the acquired entity and acquisition date

fair value of any previous equity interest in the acquired entity over

2.1 Summary of material accounting the fair value of the net identifiable assets acquired is recorded

policies (Continued) as goodwill. If those amounts are less than the fair value of the

net identifiable assets of the business acquired the difference is

(d) Business combinations recognized directly in profit or loss as a bargain purchase.Business combination is accounted for under the acquisition Where settlement of any part of cash consideration is deferred

method except for business combination under common control. the amounts payable in the future are discounted to their present

value as at the date of exchange. The discount rate used is the

The Group chooses to perform concentration test as a transaction entity’s incremental borrowing rate being the rate at which a similar

by transaction basis to determine whether an acquired asset of borrowing could be obtained from an independent financier under

activities and assets is a business or not. If the concentration test comparable terms and conditions.is met when substantially all of the fair value of the gross assets

acquired is concentrated in a single identifiable asset or group Contingent consideration is classified either as equity or a financial

of similar identifiable assets the set of activities and assets is liability. Amounts classified as a financial liability are subsequently

determined not to be a business and the Group would treat such remeasured to fair value with changes in fair value recognized in

transaction as purchasing a set of assets. profit or loss.The consideration transferred for the acquisition of a subsidiary If the business combination is achieved in stages the acquisition

regardless of whether equity investments or other assets are date carrying value of the acquirer’s previously held equity interest

acquired comprises the: in the acquiree is remeasured to fair value at the acquisition

date. Any gains or losses arising from such remeasurement are

* fair values of the assets transferred recognized in profit or loss.* liabilities incurred to the former owners of the acquired business Business combination arising from transfer of interests in entities

* equity interests issued by the Group that are under the control of the controlling shareholder that

controls the Group is accounted for as if the acquisition had

* fair value of any asset or liability resulting from a contingent occurred at the beginning of the reporting period or if later at the

consideration arrangement and date that common control was established. The assets acquired

and liabilities assumed are recognized at the carrying amounts

* fair value of any pre-existing equity interest in the subsidiary.recognized previously in the Group’s controlling shareholder’s

Identifiable assets acquired and liabilities and contingent liabilities perspective. The components of equity of the acquired entities are

assumed in a business combination are with limited exceptions added to the same components within the Group’s equity and any

measured initially at their fair values at the acquisition date. The difference between the net assets acquired and the consideration

Group recognizes any non-controlling interest in the acquired entity paid is recognized directly in equity.at the non-controlling interest’s proportionate share of the acquired

entity’s net identifiable assets. (e) Intangible assets

(i) Goodwill

Goodwill on acquisitions of subsidiaries is included in intangible

assets. Goodwill is not amortized but it is tested for impairment

annually or more frequently if events or changes in circumstances

indicate that it might be impaired and is carried at cost less

accumulated impairment losses. Gains and losses on the disposal

of an entity include the carrying amount of goodwill relating to the

entity sold.Goodwill is allocated to cash-generating units for the purpose of

impairment testing. The allocation is made to those cash-generating

units or groups of cash-generating units that are expected to benefit

from the business combination in which the goodwill arose. The

units or groups of units are identified at the lowest level at which

goodwill is monitored for internal management purposes being the

operating segments.100 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

2. Summary of Accounting Policies (v) Trademarks

(Continued) Separately acquired trademarks are shown at historical cost.

Trademarks acquired in a business combination are recognized at

fair value at the acquisition date. Trademarks have a finite useful life

2.1 Summary of material accounting and are carried at cost less accumulated amortization. Amortization

policies (Continued) is calculated using the straight-line method to allocate the cost of

trademarks over five to twenty years or the expected economic

(e) Intangible assets (Continued) benefit life.(ii) Software (f) Impairment of non-financial assets

Software is stated at cost less any impairment losses and is Assets that have an indefinite useful life or are not yet available

amortized on the straight-line basis over its estimated useful life of for use are not subject to amortization and are tested annually

two to ten years which is the shorter of expected economic benefit for impairment or more frequently if events or changes in

life and their contractual/legally protected period. circumstances indicate that they might be impaired. Other assets

(iii) Research and development are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount may not be fully

All research costs are charged to the statement of profit or loss recoverable. An impairment loss is recognized for the amount by

as incurred. which the asset’s carrying amount exceeds its recoverable amount.Development costs are capitalized only when all the following The recoverable amount is the higher of an asset’s fair value less

conditions are met: costs of disposal and value in use. For the purpose of assessing

impairment assets are grouped at the lowest levels for which

* the Group can demonstrate the technical feasibility of there are separately identifiable cash flows (cash-generating units).completing the intangible asset so that it will be available for Non-financial assets other than goodwill that suffered impairment

use or sale; and are reviewed for possible reversal of the impairment at each

* its intention to complete and its ability to use or sell the asset; reporting date.and

(g) Financial assets

* how the asset will generate economic benefits (including

demonstration that the product derived from the intangible (i) Classification

asset or the intangible asset itself will be marketable or in the The Group classifies its financial assets in the following

case of internal use the usefulness of the intangible asset as measurement categories:

such); and

* those to be measured subsequently at fair value (either through

* the availability of technical and financial resources to complete other comprehensive income or through profit or loss) and

the project and procure the use or sale of the intangible asset;

and * those to be measured at amortized cost.* the ability to measure reliably the expenditure during the The classification depends on the entity’s business model for

development. managing the financial assets and the contractual terms of the

cash flows.Self-developed systems and software when the development is

done and ready for use are stated at cost less any impairment For assets measured at fair value gains and losses will either be

losses. recorded in profit or loss or other comprehensive income. For

investments in equity instruments that are not held for trading this

(iv) Customer relationships will depend on whether the Group has made an irrevocable election

Customer relationships acquired in a business combination are at the time of initial recognition to account for the equity investment

recognized at fair value at the acquisition date. The customer at fair value through other comprehensive income (“FVOCI”).relationships have a finite useful life and are carried at cost less (ii) Recognition and derecognition

accumulated amortization. Amortization is calculated using the

straight-line method to allocate its cost over the expected life of the Regular way purchases and sales of financial assets are recognized

customer relationships which range from fifteen to twenty years. on trade-date the date on which the Group commits to purchase

The expected useful life is determined with reference to the past or sell the asset. Financial assets are derecognized when the rights

experience of the customer churn rate and the projected period of to receive cash flows from the financial assets have expired or have

future economic benefits from customer relationships. been transferred and the Group has transferred substantially all the

risks and rewards of ownership.Annual Report 2024 S.F. Holding Co. Ltd. 101

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

101

2. Summary of Accounting Policies Equity instruments

(Continued) The Group subsequently measures all equity investments at fair

value. Where the Group’s management has elected to present

fair value gains and losses on equity investments in other

2.1 Summary of material accounting comprehensive income there is no subsequent reclassification

policies (Continued) of fair value gains and losses to profit or loss following the

derecognition of the investment. Dividends from such investments

continue to be recognized in profit or loss as other income when

(g) Financial assets (Continued) the Group’s right to receive payments is established.(iii) Measurement Changes in the fair value of financial assets at fair value through

At initial recognition the Group measures a financial asset at its fair profit or loss are recognized in ‘other (losses)/gains net’ in profit or

value plus in the case of a financial asset not at fair value through loss as applicable. Impairment losses (and reversal of impairment

profit or loss (“FVPL”) transaction costs that are directly attributable losses) on equity investments measured at FVOCI are not reported

separately from other changes in fair value.to the acquisition of the financial asset. Transaction costs of

financial assets carried at FVPL are expensed in profit or loss. (iv) Impairment of financial assets

Financial assets with embedded derivatives are considered in The Group recognizes an allowance for expected credit losses

their entirety when determining whether their cash flows are solely (“ECLs”) for all debt instruments not held at fair value through

payment of principal and interest. profit or loss. ECLs are based on the difference between the

contractual cash flows due in accordance with the contract and all

Debt instruments the cash flows that the Group expects to receive discounted at an

Subsequent measurement of debt instruments depends on the approximation of the original effective interest rate. The expected

Group’s business model for managing the asset and the cash cash flows will include cash flows from the sale of collateral held

flow characteristics of the asset. There are three measurement or other credit enhancements that are integral to the contractual

terms.categories into which the Group classifies its debt instruments:

General approach

* Amortized cost: Assets that are held for collection of contractual

cash flows where those cash flows represent solely payments Impairment under general approach is measured as either 12-month

of principal and interest are measured at amortized cost. expected losses or lifetime expected credit loss depending on

Interest income from these financial assets is included in whether there has been a significant increase in credit risk since

finance income and lease income using the effective interest initial recognition. For credit exposures for which there has not been

rate method. Any gain or loss arising on derecognition is a significant increase in credit risk since initial recognition ECLs are

recognized directly in profit or loss and presented in other provided for credit losses that result from default events that are

gains/(losses) together with foreign exchange gains and losses. possible within the next 12 months (a 12-month ECL). For those

Impairment losses are presented as separate line item in the credit exposures for which there has been a significant increase

statement of profit or loss. in credit risk since initial recognition a loss allowance is required

for credit losses expected over the remaining life of the exposure

* FVOCI: Assets that are held for collection of contractual cash irrespective of the timing of the default (a lifetime ECL).flows and for selling the financial assets where the assets’

At each reporting date the Group assesses whether the credit risk

cash flows represent solely payments of principal and interest

on a financial instrument has increased significantly since initial

are measured at FVOCI. Movements in the carrying amount are recognition. When making the assessment the Group compares

taken through OCI except for the recognition of impairment the risk of a default occurring on the financial instrument as at the

gains or losses interest income and foreign exchange gains reporting date with the risk of a default occurring on the financial

and losses which are recognized in profit or loss. When the instrument as at the date of initial recognition and considers

financial asset is derecognized the cumulative gain or loss reasonable and supportable information that is available without

previously recognized in OCI is reclassified from equity to profit undue cost or effort including historical and forward-looking

or loss and recognized in other gains/(losses). Interest income information.from these financial assets is included in finance income using

the effective interest rate method. Foreign exchange gains and The Group considers a financial asset in default when contractual

payments are past due. However in certain cases the Group may

losses are presented in other gains/(losses) and impairment

also consider a financial asset to be in default when internal or

expenses are presented as separate line item in the statement

external information indicates that the Group is unlikely to receive

of profit or loss. the outstanding contractual amounts in full before taking into

* FVPL: Assets that do not meet the criteria for amortized account any credit enhancements held by the Group. A financial

cost or FVOCI are measured at FVPL. A gain or loss on a asset is written off when there is no reasonable expectation of

debt investment that is subsequently measured at FVPL is recovering the contractual cash flows.recognized in profit or loss and presented net within other Debt investments at fair value through other comprehensive income

gains/(losses) in the period in which it arises. and financial assets at amortized cost are subject to impairment

under the general approach and they are classified within the

following stages for measurement of ECLs except for accounts

apply the simplified approach as detailed below.102 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

2. Summary of Accounting Policies After initial recognition interest-bearing loans and borrowings

are subsequently measured at amortized cost using the effective

(Continued) interest rate method unless the effect of discounting would be

immaterial in which case they are stated at cost. Gains and losses

2.1 Summary of material accounting are recognized in the statement of profit or loss when the liabilities are derecognized as well as through the effective interest rate

policies (Continued) amortization process.Amortized cost is calculated by taking into account any discount or

(g) Financial assets (Continued) premium on acquisition and fees or costs that are an integral part of

(iv) Impairment of financial assets (Continued) the effective interest rate. The effective interest rate amortization is

included in finance costs in the statement of profit or loss.— Stage 1： Financial instruments for which credit risk has not

(iii) Derecognition of financial liabilities

increased significantly since initial recognition and for

which the loss allowance is measured at an amount A financial liability is derecognized when the obligation under the

equal to 12-month ECLs liability is discharged or cancelled or expires.— ： When an existing financial liability is replaced by another from the Stage 2 Financial instruments for which credit risk has

same lender on substantially different terms or the terms of an

increased significantly since initial recognition but existing liability are substantially modified such an exchange or

that are not credit-impaired financial assets and for modification is treated as a derecognition of the original liability

which the loss allowance is measured at an amount and a recognition of a new liability and the difference between

equal to lifetime ECLs the respective carrying amounts is recognized in the statement of

profit or loss.— Stage 3： Financial assets that are credit-impaired at the

reporting date (but that are not purchased or (i) Current and deferred income tax

originated credit impaired) and for which the loss

allowance is measured at an amount equal to lifetime The income tax expense or credit for the period is the tax payable

ECLs on the current period’s taxable income based on the applicable

income tax rate for each jurisdiction adjusted by changes in

Simplified approach deferred tax assets and liabilities attributable to temporary

differences and to unused tax losses.For trade and note receivables at amortized cost contract assets

and notes held for sale resulted from providing operating services (i) Current income tax

whether there exits a significant financing component the Group The current income tax charge is calculated on the basis of the

applies the simplified approach in calculating ECLs which uses a tax laws enacted or substantively enacted at the end of the year

lifetime expected loss allowance for all trade and note receivables in the countries where the Company and its subsidiaries operate

at amortized cost contract assets and notes held for sale. For and generate taxable income. Management periodically evaluates

lease receivables resulted from lease transactions the Group also positions taken in tax returns with respect to situations in which

chooses the simplified approach to measure ECLs. The Group has applicable tax regulation is subject to interpretation and considers

established a provision matrix that is based on its historical credit whether it is probable that a taxation authority will accept an

loss experience adjusted for forward-looking factors specific to the uncertain tax treatment. The Group measures its tax balances either

debtors and the economic environment. based on the most likely amount or the expected value depending

on which method provides a better prediction of the resolution of

(h) Financial liabilities the uncertainty.(i) Initial recognition and measurement (ii) Deferred income tax

Financial liabilities are classified at initial recognition as financial Deferred income tax is provided in full using the liability method

liabilities at fair value through profit or loss loans and borrowings on temporary differences arising between the tax bases of assets

payables or as derivatives designated as hedging instruments in and liabilities and their carrying amounts in the consolidated

an effective hedge as appropriate. financial statements. However deferred tax liabilities are not

recognized if they arise from the initial recognition of goodwill.All financial liabilities are recognized initially at fair value and in Deferred income tax is also not accounted for if it arises from

the case of loans and borrowings and payables net of directly initial recognition of an asset or liability in a transaction other than

attributable transaction costs. a business combination that at the time of the transaction affects

neither accounting nor taxable profit or loss and does not give rise

The Group’s financial liabilities include trade and other payables to taxable and deductible temporary differences. Deferred income

derivative financial instruments lease liabilities interest-bearing tax is determined using tax rates (and laws) that have been enacted

borrowings and bonds. or substantially enacted by the end of the reporting period and are

(ii) Subsequent measurement expected to apply when the related deferred income tax asset is

realized or the deferred income tax liability is settled.The subsequent measurement of financial liabilities depends on their

Deferred tax assets are recognized only if it is probable that

classification as follows: future taxable amounts will be available to utilize those temporary

Financial liabilities at amortized cost differences and losses.Annual Report 2024 S.F. Holding Co. Ltd. 103

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

103

2. Summary of Accounting Policies * direct measurements of the value transferred by the Group to

the customer; or

(Continued)

* the Group’s efforts or inputs to the satisfaction of the

performance obligation relative to the total expected efforts or

2.1 Summary of material accounting inputs.

policies (Continued) (i) Revenue from logistics and freight forwarding

services

(i) Current and deferred income tax (Continued)

The Group derives revenue from provision of logistics and

(ii) Deferred income tax (Continued) freight forwarding services including express and freight delivery

Deferred tax liabilities and assets are not recognized for temporary services (comprising time-definite express services economy

differences between the carrying amount and tax bases of express services freight delivery services and cold chain and

investments in foreign operations where the Group is able to pharmaceuticals logistics services) intra-city on-demand delivery

control the timing of the reversal of the temporary differences and services and supply chain and international services.it is probable that the differences will not reverse in the foreseeable The Group uses information technology systems to process

future (Note 18). and record services provided and recognizes revenue based

(iii) Offsetting on the progress of the service performed within period which

is determined based on proportion of costs incurred to date to

Deferred tax assets and liabilities are offset where there is a the estimated total costs or days spent to the estimated total

legally enforceable right to offset current tax assets and liabilities days. As at the date of the end of the reporting period the Group

and where the deferred tax balances relate to the same taxation re-estimates the progress of the service performed to reflect the

authority. Current tax assets and tax liabilities are offset where the actual status of contract performance.entity has a legally enforceable right to offset and intends either to

settle on a net basis or to realize the asset and settle the liability When the Group recognizes revenue based on the progress

simultaneously. of the service performed the amount with unconditional right

to consideration obtained by the Group is recognized as trade

Current and deferred tax is recognized in profit or loss except to receivables and the rest is recognized as contract assets.the extent that it relates to items recognized in other comprehensive Meanwhile provision for trade receivables and contract assets

income or directly in equity. In this case the tax is also recognized is recognized on the basis of expected credit losses (Note 2.1(h)

in other comprehensive income or directly in equity respectively. (iv)). If the contract consideration received or receivable exceeds

the progress of the service performed the excess portion will be

(j) Revenue recognition recognized as contract liabilities. Contract assets and contract

liabilities under the same contract are presented on a net basis.Revenue is recognized with the amount of consideration to which

the Group expects to be entitled when or as the control of the Contract costs include costs to fulfil a contract and costs to obtain

goods or services is transferred to a customer. Depending on a contract. Costs incurred for provision of the aforesaid services

the terms of the contract and the laws that apply to the contract are recognized as costs to fulfil a contract which is carried forward

control of the goods and services may be transferred over time or to the cost of revenue when revenue recognized based on the

at a point in time. Control of the goods and services is transferred progress of the service performed. Incremental costs incurred

over time if the Group’s performance: by the Group for the acquisition of the aforesaid service contract

are recognized as the costs to obtain a contract. For the costs to

* provides all of the benefits received and consumed

obtain a contract with the amortization period within one year the

simultaneously by the customer;

costs are charged to profit or loss when incurred. For the costs

* creates or enhances an asset that the customer controls as the to obtain a contract with the amortization period beyond one year

Group performs; or the costs are charged in the profit or loss on the same basis as

aforesaid revenue of rendering of services recognized under the

* does not create an asset with an alternative use to the

relevant contract. If the carrying amount of the contract costs is

Group and the Group has an enforceable right to payment for

higher than the remaining consideration expected to be obtained by

performance completed to date.rendering of the service net of the estimated cost to be incurred the

If control of the asset transfers over time revenue is recognized Group makes provision for impairment on the excess portion and

over the period of the contract by reference to the progress towards recognizes it as asset impairment losses. As at the date of the end

complete satisfaction of that performance obligation. Otherwise of the reporting period based on whether the amortization period

revenue is recognized at a point in time when the customer obtains of the costs to fulfil a contract is more than one year when initially

control of the asset. recognized the amount of the Group’s costs to fulfil a contract net

of related provision for asset impairment is presented as inventories

The progress towards complete satisfaction of the performance or other non-current assets. For costs to obtain a contract with

obligation is measured based on one of the following methods that amortization period beyond one year at the initial recognition the

best depict the Group’s performance in satisfying the performance amount net of related provision for asset impairment is presented

obligation: as other non-current assets.104 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

2. Summary of Accounting Policies Inter-company transactions balances and unrealized gains on

transactions between group companies are eliminated. Unrealized

(Continued) losses are also eliminated unless the transaction provides evidence

of an impairment of the transferred asset. Accounting policies

2.1 Summary of material accounting of subsidiaries have been changed where necessary to ensure

consistency with the policies adopted by the Group.policies (Continued)

Non-controlling interests in the results and equity of subsidiaries

(j) Revenue recognition (Continued) are shown separately in the consolidated statement of profit or

loss consolidated statement of other comprehensive income

(ii) Sales of goods consolidated statement of changes in equity and consolidated

Sales are recognized when control of the products has transferred statement of financial position respectively.being when the products are delivered to the customer the

customer has full discretion over the channel and there is no (b) Equity method

unfulfilled obligation that could affect the customer’s acceptance Under the equity method of accounting the investments are

of the products. initially recognized at cost and adjusted thereafter to recognize

Delivery occurs when the products have been shipped to the the Group’s share of the post-acquisition profits or losses of the

specific location the risks of obsolescence and loss have been investee in profit or loss and the Group’s share of movements in

transferred to the customer and either the customer has accepted other comprehensive income of the investee in other comprehensive

the products in accordance with the sales contract or the Group income. Dividends received or receivable from associates and joint

has objective evidence that all criteria for acceptance have been ventures are recognized as a reduction in the carrying amount of

satisfied. the investment.Revenue from these sales is recognized based on the price Where the Group’s share of losses in an equity-accounted

specified in the contract. No element of financing is deemed present investment equals or exceeds its interest in the entity including

as the sales are made with the credit policies which is consistent any other unsecured long-term receivables the Group does not

with market practice. recognize further losses unless it has incurred obligations or made

payments on behalf of the other entity.A receivable is recognized when the goods are delivered as this is

the point in time that the consideration is unconditional because The gain or loss resulting from a downstream transaction involving

only the passage of time is required before the payment is due. assets that constitute a business between the Group and the

associate or joint ventures is recognized in full in the Group’s

(iii) Other services financial statements.The Group’s services also include telecommunication service Unrealized gains on transactions between the Group and its

repairment service research and development and technical associates and joint ventures are eliminated to the extent of

services and other services. the Group’s interest in these entities. Unrealized losses are

With regard to certain maintenance service research and also eliminated unless the transaction provides evidence of

development and technical services the Group recognizes revenue an impairment of the asset transferred. Accounting policies of

at a point in time when the services are delivered to customers. equity-accounted investees have been changed where necessary

For other services the Group recognizes revenue based on to ensure consistency with the policies adopted by the Group.the progress of the service performed within period which is The carrying amount of equity-accounted investments is tested for

determined based on proportion of costs incurred to date to the impairment in accordance with the policy described in Note 2.1(g).estimated total costs as at the date of end of the reporting period.(c) Changes in ownership interests

2.2 Summary of other accounting policies The Group treats transactions with non-controlling interests that

do not result in a loss of control as transactions with owners of the

(a) Subsidiaries Group. A change in ownership interest results in an adjustment

A subsidiary is an entity (including a structured entity) over which between the carrying amounts of the controlling and non-controlling

the Group has control. The Group controls an entity when the interests to reflect their relative interests in the subsidiary. Any

Group is exposed to or has rights to variable returns from its difference between the amount of the adjustment to non-controlling

involvement with the entity and has the ability to affect those returns interests and any consideration paid or received is recognized

through its power over the entity. Subsidiaries are consolidated in a separate reserve within equity attributable to owners of the

from the date on which control is transferred to the Group. They Company.are deconsolidated from the date that control ceases.The acquisition method of accounting is used to account for

business combinations by the Group. Refer to Note 2.1(e) for further

accounting policy information.Annual Report 2024 S.F. Holding Co. Ltd. 105

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

105

2. Summary of Accounting Policies Non-monetary items that are measured at fair value in foreign

currency are translated using the exchange rates at the date

(Continued) when the fair value was determined. Translation differences on

non-monetary assets and liabilities carried at fair value are reported

2.2 Summary of other accounting policies as part of the fair value gain or loss. For example translation

differences on non-monetary financial assets and liabilities such

(Continued) as equity instruments held at fair value through profit or loss

are recognized in the consolidated statement of profit or loss as

(c) Changes in ownership interests (Continued) part of the fair value gain or loss and translation differences on

When the Group ceases to consolidate or equity account for an non-monetary financial assets such as equity investment at fair

investment because of a loss of control joint control or significant value through other comprehensive income are included in other

influence any retained interest in the entity is remeasured to its comprehensive income.fair value with the change in carrying amount recognized in profit (iii) Group companies

or loss. This fair value becomes the initial carrying amount for the

purposes of subsequently accounting for the retained interest The results and financial position of all the Group’s entities (none of

as an associate joint venture or financial asset. In addition any which has the currency of a hyperinflationary economy) that have

amounts previously recognized in other comprehensive income in a functional currency different from the presentation currency are

respect of that entity are accounted for as if the Group had directly translated into the presentation currency as follows:

disposed of the related assets or liabilities. This may mean that * assets and liabilities for each statement of financial position of

amounts previously recognized in other comprehensive income the Group’s entities are translated at the closing rate at the end

are reclassified to profit or loss or transferred to another category of the reporting period;

of equity as specified/permitted by applicable IFRS Accounting

Standards. * income and expenses for each statement of profit or loss of

the Group’s entities are translated at average exchange rates

If the ownership interest in a joint venture or an associate is (unless this average is not a reasonable approximation of the

reduced but joint control or significant influence is retained only a cumulative effect of the rates prevailing on the transaction

proportionate share of the amounts previously recognized in other dates in which case income and expenses are translated at

comprehensive income are reclassified to profit or loss where the dates of the transactions); and

appropriate.* all resulting exchange differences are recognized in other

(d) Separate financial statements comprehensive income.Investments in subsidiaries are accounted for at cost less On consolidation exchange differences arising from the translation

impairment. Cost includes direct attributable costs of investment. of the net investment in foreign operations are taken to other

The results of subsidiaries are accounted for by the Company on comprehensive income. When a foreign operation is partially

the basis of dividend received and receivable. disposed of or sold exchange differences that were recorded in

equity are recognized in the consolidated statement of profit or loss

Impairment test of the investments in subsidiaries is required upon and other comprehensive income as part of the gain or loss on sale.receiving a dividend from these investments if the dividend exceeds

the total comprehensive income of the subsidiary in the period the Goodwill and fair value adjustments arising on the acquisition of a

dividend is declared or if the carrying amount of the investment in foreign entity are treated as assets and liabilities of the foreign entity

the separate financial statements exceeds the carrying amount of and translated at the closing rate.the investee’s net assets including goodwill.(f) Leases

(e) Foreign currency translation (i) The Group as the lessee

(i) Functional and presentation currency Leases are recognized as a right-of-use asset and a corresponding

Items included in the financial statements of each of the Group’s liability at the date at which the leased asset is available for use

entities are measured using the currency of the primary economic by the Group.environment in which the entity operates (“the functional currency”). Assets and liabilities arising from a lease are initially measured on

Since the majority of the assets and operations of the Group are a present value basis. Lease liabilities include the net present value

located in the PRC the consolidated financial statements are of the following lease payments:

presented in RMB which is also the Company’s functional and the

Group’s presentation currency. * fixed payments (including in-substance fixed payments) less

any lease incentives receivable

(ii) Transactions and balances

* variable lease payment that are based on an index or a

Foreign currency transactions are translated into the functional rate initially measured using the index or rate as at the

currency using the exchange rates prevailing at the dates of the commencement date

transactions or valuation where items are re-measured. Foreign

exchange gains and losses resulting from the settlement of such

transactions and from the translation at year end exchange rates

of monetary assets and liabilities denominated in foreign currencies

are recognized in profit or loss.106 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

2. Summary of Accounting Policies The Group also has interests in leasehold land and land use rights

for use in its operations. Lump sum payments were made upfront

(Continued) to acquire these land interests from their previous registered owners

or governments in the jurisdictions where the land is located. There

2.2 Summary of other accounting policies are no ongoing payments to be made under the term of the land

leases other than insignificant lease renewal costs or payments

(Continued) based on rateables value set by the relevant government authorities.

These payments are stated at cost and are amortized over the term

(f) Leases (Continued) of the lease which includes the renewal period if the lease can be

(i) The Group as the lessee (Continued) renewed by the Group without significant cost.* amounts expected to be payable by the Group under residual Right-of-use assets are generally depreciated over the shorter of

value guarantees the asset’s useful life and the lease term on a straight-line basis.If the Group is reasonably certain to exercise a purchase option

* the exercise price of a purchase option if the Group is the right-of-use asset is depreciated over the underlying asset’s

reasonably certain to exercise that option and useful life.* payments of penalties for terminating the lease if the lease term Payments associated with short-term leases and all leases of

reflects the Group exercising that option. low-value assets are recognized as expenses in profit or loss.Short-term leases are leases with a lease term of 12 months or less.Lease payments to be made under reasonably certain extension

options are also included in the measurement of the liability. (ii) The Group as the lessor

The lease payments are discounted using the interest rate implicit When the Group acts as a lessor it classifies at lease inception (or

in the lease. If that rate cannot be readily determined which is when there is a lease modification) each of its leases as either an

generally the case for leases in the Group the lessee’s incremental operating lease or a finance lease.borrowing rate is used being the rate that the individual lessee

would have to pay to borrow the funds necessary to obtain an Leases in which the Group does not transfer substantially all the

asset of similar value to the right-of-use asset in a similar economic risks and rewards incidental to ownership of an asset are classified

environment with similar terms security and conditions. as operating leases. When a contract contains lease and non-lease

components the Group allocates the consideration in the contract

To determine the incremental borrowing rate the Group: to each component on a relative stand-alone selling price basis.Rental income is accounted for on a straight-line basis over the

* where possible uses recent third-party financing received by

lease terms and is included in revenue in the statement of profit

the individual lessee as a starting point adjusted to reflect

or loss due to its operating nature. Initial direct costs incurred in

changes in financing conditions since third party financing was

negotiating and arranging an operating lease are added to the

received; and

carrying amount of the leased asset and recognized over the lease

* makes adjustments specific to the lease e.g. term country term on the same basis as rental income. Contingent rents are

currency and security. recognized as revenue in the period in which they are earned.The Group is exposed to potential future increases in variable lease Leases that transfer substantially all the risks and rewards incidental

payments based on an index or rate which are not included in to ownership of an underlying asset to the lessee are accounted

the lease liability until they take effect. When adjustments to lease for as finance leases.payments based on an index or rate take effect the lease liability is

reassessed and adjusted against the right-of use asset. (g) Property plant and equipment

Lease payments are allocated between principal and finance cost. All property plant and equipment are stated at historical costs less

The finance cost is charged to profit or loss over the lease period so accumulated depreciation and accumulated impairment charges.as to produce a constant periodic rate of interest on the remaining Historical costs include expenditures that are directly attributable

balance of the liability for each period. to the acquisition of the items.Right-of-use assets are measured at cost comprising the following: Subsequent costs are included in the asset’s carrying amount or

recognized as a separate asset as appropriate only when it is

* the amount of the initial measurement of lease liability

probable that future economic benefits associated with the asset

* any lease payments made at or before the commencement date will flow to the Group and the cost of the item can be measured

less any lease incentives received reliably. The carrying amount of the replaced part is derecognized.All other repairs and maintenance are charged to the consolidated

* any initial direct costs and

statement of comprehensive income during the periods in which

* restoration costs. they are incurred.Annual Report 2024 S.F. Holding Co. Ltd. 107

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

107

2. Summary of Accounting Policies This change in accounting estimate was implemented using the

prospective method from January 1 2024. The comparison of the

(Continued) changes in depreciation of the aircraft fuselage is as follows:

2.2 Summary of other accounting policies Estimated Estimated Depreciation

(Continued) useful lives residual value rate

Before 10 years 5.00% 9.50%

(g) Property plant and equipment (Continued)

After 10-20 years 5.00% 9.50%-4.75%

Replacement parts of aircraft engine repairment/maintenance are

depreciated using the units-of-production method. Except for the

replacement parts of aircraft engine repairment/maintenance and Construction in progress represents logistics centers and

freehold land depreciation of other property plant and equipment is warehouses under construction and is stated at cost less

calculated using the straight-line method to allocate their cost net impairment losses. It will be reclassified to the relevant property

of their residual values over their estimated useful lives as follows: plant and equipment category upon completion and depreciation

begins when the relevant assets are available for use.Freehold land Not depreciated

(h) Investment properties

Buildings 10 – 50 years

Investment properties are interests in land and buildings held

Machinery and equipment 2 – 40 years to earn rental income and/or for capital appreciation including

properties under construction for such purpose rather than for

Aircraft aircraft engines rotables 1.5 – 20 years use in the production or supply of goods or services or for

and other flight equipment administrative purposes or for sale in the ordinary course of

business. Such properties are measured initially at cost including

Other property plant and 2 – 20 years related transaction costs. After initial recognition the Group

equipment chooses the cost model to measure all of its investment properties.Leasehold improvements Shorter of their useful lives Depreciation is calculated on the straight-line basis to its residual

and the lease term value over its estimated useful life. The estimated useful lives are

as follows:

The assets’ residual values and useful lives are reviewed and

adjusted if appropriate at each reporting date. Buildings 10 – 50 years

An asset’s carrying amount is written down immediately to its Land use rights 20 – 50 years

recoverable amount if the asset’s carrying amount is greater than

its estimated recoverable amount (Note 2.1(g)).The carrying amounts of investment properties measured using the

Gains and losses on disposal are determined by comparing the cost method are reviewed for impairment when events or changes

proceeds with the carrying amounts. These are included in the in circumstances indicate that the carrying amounts may not be

consolidated statement of comprehensive income. recoverable.In relation to the aircraft fuselage within the properties plants and Any gains or losses on the retirement or disposal of an investment

equipment the Group provided for depreciation over a period of property are recognized in profit or loss in the year of the retirement

10 years in and before the year ended December 31 2023. Based or disposal.

on the assessment conducted by the technical department of the

Group with reference to the actual useful lives and utilization of (i) Inventories

aircraft the Group considers that current estimated useful lives of

aircraft no longer reflects the actual usage of the aircraft. Inventories are stated at the lower of cost and net realizable value.Cost is determined using the weighted average method. Net

In order to more truly and accurately reflect the status and operating realizable value is the estimated selling price in the ordinary course

results of the Company’s aircraft fuselage and to better align the of business less applicable variable selling expenses.expected useful life of the aircraft fuselage with its actual service

life the Group has made an accounting estimate change to the

expected useful lives of the aircraft fuselage.108 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

2. Summary of Accounting Policies (n) Borrowings

(Continued) Borrowings are initially recognized at fair value net of transaction

costs incurred. Borrowings are subsequently measured at amortized

cost. Any difference between the proceeds (net of transaction

2.2 Summary of other accounting policies costs) and the redemption amount is recognized in profit or loss

(Continued) over the period of the borrowings using the effective interest

method. Fees paid on the establishment of loan facilities are

(j) Trade and other receivables recognized as transaction costs of the loan to the extent that it

is probable that some or all of the facility will be drawn down. In

Trade receivables are amounts due from customers for goods sold this case the fee is deferred until the draw-down occurs. To the

or services performed in the ordinary course of business. Majority extent there is no evidence that it is probable that some or all of the

of other receivables are advances to employees deposit from facility will be drawn down the fee is capitalized as a prepayment

suppliers and value-added tax recoverable. If collection of trade for liquidity services and amortized over the period of the facility

and other receivables is expected in one year or less (or in the to which it relates.normal operating cycle of the business if longer) they are classified

as current assets. If not they are presented as non-current assets. Where the terms of a financial liability are renegotiated and the

entity issues equity instruments to a creditor to extinguish all or part

Trade and other receivables are recognized initially at the amount of the liability (debt for equity swap) a gain or loss is recognized

of consideration that is unconditional unless they contain significant in profit or loss which is measured as the difference between the

financing components when they are recognized at fair value. carrying amount of the financial liability and the fair value of the

The Group holds the trade receivables with the objective of equity instruments issued.collecting the contractual cash flows and therefore measures

them subsequently at amortized cost using the effective interest Borrowings are classified as current liabilities unless the Group has

method less provision for impairment. See Note 24 and Note 19 an unconditional right to defer settlement of the liability for at least

for further information about the Group’s accounting for Trade and 12 months after the reporting period.other receivables and Note 2.1(h) for a description of the Group’s

impairment policies. (o) Borrowing costs

General and specific borrowing costs that are directly attributable

(k) Cash and cash equivalents

to the acquisition construction or production of a qualifying asset

Cash and cash equivalents include cash in hand deposits held are capitalized during the period of time that is required to complete

at call with banks other short-term highly liquid investments with and prepare the asset for its intended use or sale. Qualifying assets

original maturities of three months or less. Bank overdrafts are are assets that necessarily take a substantial period of time to get

shown as a separate current liability in the consolidated statement ready for their intended use or sale.of financial position.Investment income earned on the temporary investment of specific

Restricted and pledged bank deposits are not included in cash and borrowings pending their expenditure on qualifying assets is

cash equivalents. deducted from the borrowing costs eligible for capitalization.Other borrowing costs are expensed in the period in which they

(l) Share capital and capital reserve are incurred.Ordinary shares are classified as equity. Incremental costs directly

attributable to the issue of new shares are shown in equity as a (p) Provisions

deduction net of tax from the proceeds.Provisions for legal claims service warranties and make good

Where any group company purchases its equity instruments obligations are recognized when the Group has a present legal or

for example as the result of an employee share scheme the constructive obligation as a result of past events it is probable that

consideration paid including any directly attributable incremental an outflow of resources will be required to settle the obligation and

costs (net of income taxes) is deducted from equity attributable the amount can be reliably estimated. Provisions are not recognized

to owners of the Company as treasury shares until the shares for future operating losses.are cancelled or reissued. Where such shares are subsequently

Where there are a number of similar obligations the likelihood

reissued any consideration received net of any directly attributable

that an outflow will be required in settlement is determined by

incremental transaction costs and the related income tax effects is

considering the class of obligations as a whole. A provision is

included in equity attributable to owners of the Company.recognized even if the likelihood of an outflow with respect to any

one item included in the same class of obligations may be small.(m) Trade and other payables

These amounts represent liabilities for goods and services provided

to the Group prior to the end of financial period which are unpaid.Trade payables are presented as current liabilities unless payment

is not due within 12 months after the reporting. They are recognized

initially at fair value and subsequently measured at amortized cost

using the effective interest method.Annual Report 2024 S.F. Holding Co. Ltd. 109

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

109

2. Summary of Accounting Policies (r) Share-based payments

(Continued) Share-based payments can be distinguished into equity-settled

share-based payments and cash-settled share-based payments.Equity-settled share-based payments are transactions of the Group

2.2 Summary of other accounting policies settled through the payment of shares or other equity instruments

(Continued) in consideration for receiving services.

Equity-settled share-based payments made in exchange for

(p) Provisions (Continued)

services rendered by employees are measured at the fair value of

Provisions are measured at the present value of management’s equity instruments granted to employees. Instruments which are

best estimate of the expenditure required to settle the present vested immediately upon the grant are charged to relevant costs

obligation at the end of the reporting period. The discount rate or expenses at the fair value on the date of grant and the capital

used to determine the present value is a pre-tax rate that reflects reserve is credited accordingly. Instruments of which vesting is

current market assessments of the time value of money and the conditional upon completion of services or fulfillment of performance

risks specific to the liability. The increase in the provision due to the conditions are measured by recognizing services rendered during

passage of time is recognized as interest expense. the period in relevant costs or expenses and crediting the capital

reserve accordingly at the fair value on the date of grant according

(q) Employee benefits to the best estimates conducted by the Group at each date of the

end of the reporting period during the pending period. The fair

(i) Short-term obligations value of equity instruments is determined by share price or using

Liabilities for wages and salaries including non-monetary benefits an adjusted form of the discounted cash flow or the binomial option

annual leave and accumulating sick leave that are expected to be pricing model. For details see Note 33. Share-based payment.settled wholly within 12 months after the end of the period in which No expense is recognized for awards that do not ultimately vest

the employees render the related service are recognized in respect due to non-fulfillment of non-market conditions and/or vesting

of employees’ services up to the end of the reporting period and are conditions. For the market or non-vesting condition under the

measured at the amounts expected to be paid when the liabilities share-based payments agreement it should be treated as vesting

are settled. The liabilities are presented as current employee benefit irrespective of whether or not the market or non-vesting condition is

obligations in the consolidated statement of financial position. satisfied provided that other performance condition and/or vesting

(ii) Employment obligations conditions are satisfied.Housing funds medical insurances and other social insurances Where the terms of an equity-settled share-based payment are

modified as a minimum services obtained are recognized as if the

Employees of the Group in the PRC are entitled to participate in terms had not been modified. In addition an expense is recognized

various government-supervised housing funds medical insurance for any modification which increases the total fair value of the

and other employee social insurance plan. The Group contributes instrument ranted or is otherwise beneficial to the employee as

on a monthly basis to these funds based on certain percentages of measured at the date of modification.the salaries of the employees subject to certain ceiling. The Group’s

liability in respect of these funds is limited to the contributions Where an equity-settled award is cancelled it is treated as if it

payable in each year. Contributions to the housing funds medical had vested on the date of cancellation and any expense not

insurances and other social insurances are expensed as incurred. yet recognized for the award is recognized immediately. Where

employees or other parties are permitted to choose to fulfill

Termination benefits non-vesting conditions but have not fulfilled during the pending

Termination benefits are payable when employment is terminated period equity-settled share-based payments are deemed cancelled.by the Group before the normal retirement date or whenever an However if a new award is substituted for the cancelled award and

employee accepts voluntary redundancy in exchange for these designated as a replacement award on the date that it is granted

benefits. The Group recognizes termination benefits at the earlier the new awards are treated as if they were a modification of the

of the following dates: (a) when the Group can no longer withdraw original award.the offer of those benefits; and (b) when the entity recognizes costs Cash-settled share-based payments are those arrangements with

for a restructuring that is within the scope of IAS 37 and involves employees where terms provide the Group to settle the transaction

the payment of termination benefits. In the case of an offer made in cash. For cash-settled share-based payments a liability equal

to encourage voluntary redundancy the termination benefits are to the portion of the services received is recognized at the current

measured based on the number of employees expected to accept fair value determined at the end of the reporting period until the

the offer. Benefits falling due more than 12 months after the end of date of settlement with any changes in fair value recognized in

the reporting period are discounted to their present value. profit or loss.110 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

2. Summary of Accounting Policies (u) Government grants

(Continued) Grants from the government are recognized at their fair value where

there is a reasonable assurance that the grant will be received and

the Group will comply with all attached conditions.

2.2 Summary of other accounting policies

(Continued) Government grants relating to costs are deferred and recognized

in the consolidated statement of profit or loss over the period

necessary to match them with the costs that they are intended

(s) Dividend distribution

to compensate. Government grants relating to property and

Dividend distributed to the shareholders is recognized as a liability equipment and other non-current assets are included in the

in the consolidated financial statements in the period when the non-current liabilities and are credited to the consolidated statement

dividends are approved by the entities’ shareholders or directors of profit or loss on a straight – line basis over the expected lives

where appropriate. of the related assets.(t) Earnings per share 3. Financial Risk Management

(i) Basic earnings per share

Basic earnings per share is calculated by dividing: 3.1 Financial risk factors

* the profit attributable to owners of the Company excluding any The Group’s activities expose it to a variety of financial risks:

costs of servicing equity other than ordinary shares market risk (including foreign exchange risk price risk and interest

rate risk) credit risk and liquidity risk. The Group’s overall risk

* by the weighted average number of ordinary shares outstanding

management program focuses on the unpredictability of financial

during the financial year adjusted for bonus elements in

markets and seeks to minimize potential adverse effects on the

ordinary shares issued during the year and excluding treasury

Group’s financial performance. Risk management is carried out by

shares.the directors and senior management of the Group.(ii) Diluted earnings per share

(a) Market risk

Diluted earnings per share adjusts the figures used in the

determination of basic earnings per share to take into account: (i) Foreign exchange risk

* the after-income tax effect of interests and other financing costs The Group’s major operational activities are carried out in mainland

associated with dilutive potential ordinary shares and China and most of the transactions are denominated in RMB. Some

operational activities are carried out in regions/countries including

* the weighted average number of additional ordinary shares that

Hong Kong Special Administrative Region (“Hong Kong”) and

would have been outstanding assuming the conversion of all

United States and relevant transactions are settled in Hong Kong

dilutive potential ordinary shares.Dollar (“HKD”) and United States Dollar (“USD”). Foreign exchange

risk arises when future commercial transactions or recognized

assets and liabilities are denominated in a currency that is not the

respective functional currency of the Group’s subsidiaries. The

Group manages its foreign exchange risk by performing regular

reviews of the Group’s net foreign exchange exposures.Annual Report 2024 S.F. Holding Co. Ltd. 111

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

111

3. Financial Risk Management (Continued)

3.1 Financial risk factors (Continued)

(a) Market risk (Continued)

(i) Foreign exchange risk (Continued)

As at December 31 2024 and 2023 for the Group’s subsidiaries with RMB as the functional currency major monetary assets and liabilities

exposed to foreign exchange risk are listed below:

USD HKD Others

denominated denominated denominated

RMB’000 RMB’000 RMB’000

At December 31 2024

Cash and cash equivalents 382588 32664 2160

Trade and other receivables 541416 22940 47901

Trade payables accruals and other payables (369254) (25123) (60337)

Total 554750 30481 (10276)

At December 31 2023

Cash and cash equivalents 254389 45245 6177

Trade and other receivables 649073 27900 17133

Trade payables accruals and other payables (391029) (56703) (62492)

Total 512433 16442 (39182)

As at December 31 2024 for the above USD-denominated financial assets and financial liabilities if the RMB strengthened or weakened by

5% against USD and with all variables held constant the Group’s profit before taxation would have decreased or increased by approximately

RMB27738000 (2023: RMB25622000). Other foreign currencies of changes have no significant impact on foreign exchange risk.112 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

3. Financial Risk Management (Continued)

3.1 Financial risk factors (Continued)

(a) Market risk (Continued)

(i) Foreign exchange risk (Continued)

As at December 31 2024 and 2023 for the Group’s subsidiaries with HKD as the functional currency major monetary assets and liabilities

exposed to foreign exchange risk are listed below:

USD RMB Other

denominated denominated denominated

RMB’000 RMB’000 RMB’000

At December 31 2024

Cash and cash equivalents 217831 17857 166

Trade and other receivables 28725 17723 –

Trade payables accruals and other payables (4313) (36590) (722)

Total 242243 (1010) (556)

At December 31 2023

Cash and cash equivalents 384796 98862 34738

Trade and other receivables 95029 5846 –

Trade payables accruals and other payables (97982) (8046) (5148)

Total 381843 96662 29590

For the Group’s subsidiaries with HKD as the functional currency the foreign exchange exposure of their non-functional currency denominated

financial assets and financial liabilities was mainly derived from the USD. As USD is pegged against HKD the foreign exchange exposure of

the above-mentioned subsidiaries is not significant.(ii) Price risk

The Group is exposed to price risk mainly arising from equity investments held by the Group that are classified either as FVPL or FVOCI that

will not be sold within one year.Sensitivity analysis is performed by management to assess the exposure of the Group’s financial results to equity price risk of FVPL and FVOCI

as at December 31 2024 and 2023. If prices of the respective instruments held by the Group had been 10% higher/lower as at December

31 2024 and 2023 profit for the year would have been approximately RMB47742000 (2023: RMB59000000) higher/lower as a result of

gains/losses on financial instruments classified as at FVPL other comprehensive income would have been approximately RMB823199000

(2023: RMB948954000) higher/lower as a result of gains/losses on financial instruments classified as at FVOCI.Annual Report 2024 S.F. Holding Co. Ltd. 113

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

113

3. Financial Risk Management (Continued)

3.1 Financial risk factors (Continued)

(a) Market risk (Continued)

(iii) Interest rate risk

The Group’s interest rate risk primarily arises from long-term interest-bearing borrowings and bonds. Long-term borrowings issued at variable

rates expose the Group to cash flow interest rate risk. Bonds issued at fixed rates expose the Group to fair value interest rate risk. The Group

determines the proportion of borrowings and bonds issued at variable rates and fixed rates based on the market environment.The Group has been monitoring the level of interest rates. The increase in the interest rates will increase the interest costs of borrowings at

variable rates which will further impact the performance of the Group. To hedge against the variability in the cash flows arising from a change

in market interest rates the Group may enter into certain interest rate swap contracts to swap variable rates into fixed rates.The following tables list out the interest rate profiles of the Group’s interest-bearing financial instruments as at December 31 2024 and 2023:

As at December 31

20242023

RMB’000 RMB’000

Floating rate instruments

Long-term borrowings 6186386 11355241

As at December 31

20242023

RMB’000 RMB’000

Fixed rate instruments

Bonds

– USD denominated 17943954 18295063

– RMB denominated 1997981 499719

If interest rates of floating rate instruments had been 50 basis points higher or lower with all other variables held constant profit before income

tax would be lower or higher approximately RMB30932000 and RMB56776000 as at December 31 2024 and 2023 respectively.(b) Credit risk

The carrying amounts of cash and cash equivalents restricted cash trade and other receivables and contract assets represent the Group’s

major exposure to credit risk in relation to financial assets.(i) Credit risk of cash and bank balances restricted and pledged bank deposits

To manage this risk arising from cash and cash equivalents and restricted cash the Group mainly transacts with banks with high credit rating.There has been no recent history of default in relation to these financial institutions. The expected credit loss is minimal.(ii) Credit risk of trade receivables and contract assets

There is no concentration of credit risk with respect to trade receivables from third party customers as the Group has wide-ranging customers

in different industries. In respect of customers with a poor credit history sending written payment reminders shortening or cancellation of

credit periods and other follow-up actions are taken to ensure the overall credit risk of the Group is limited to a controllable extent. In addition

the Group has closely monitored the credit qualities and the collectability of these receivables at the end of each reporting period to ensure

that adequate impairment losses are made. In this regard the Directors of the Company consider that the expected credit risks of them are

adequately covered.114 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

3. Financial Risk Management (Continued)

3.1 Financial risk factors (Continued)

(b) Credit risk (Continued)

(ii) Credit risk of trade receivables and contract assets (Continued)

The Group has applied the IFRS 9 simplified approach to measuring ECLs which uses a lifetime ECLs for all trade receivables and contract

assets. In calculating the expected credit loss rates the Group considers historical loss rates and adjusts for forward looking macroeconomic

data. At the end of each reporting period the historical observed default rates are updated and changes in the forward-looking estimates

are analyzed.A default on trade receivables and contract assets is when the counterparty fails to make contractual payments when they fall due.Trade receivables and contract assets are written off when there is no reasonable expectation of recovery.On that basis the loss allowance as at December 31 2024 and 2023 was determined as follows for both trade receivables and contract assets:

As at December 31 2024

Gross amount

Trade and

note receivables Contract assets Loss allowance Expected loss rate

RMB’000 RMB’000 RMB’000 %

Assessed based on grouping

– The third parties 28280344 2737292 794255 2.56%

– The related parties 540956 8517 50401 9.17%

Assessed individual 274364 – 274364 100.00%

Total 29095664 2745809 1119020

As at December 31 2023

Gross amount

Trade and

note receivables Contract assets Loss allowance Expected loss rate

RMB’000 RMB’000 RMB’000 %

Assessed based on grouping

– The third parties 25957399 1635220 700939 2.54%

– The related parties 124211 924 23790 19.01%

Assessed individual 657488 – 657488 100.00%

Total 26739098 1636144 1382217

(iii) Credit risk of lease receivables

For lease receivables resulted from lease transactions the Group applies IFRS 9 simplified approach to measuring ECLs regardless of whether

there exits a significant financing component.As at December 31 2024 and 2023 management is of the view that the credit risk of lease receivables is low and the loss allowance provision

for lease receivables is not material.Annual Report 2024 S.F. Holding Co. Ltd. 115

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

115

3. Financial Risk Management (Continued)

3.1 Financial risk factors (Continued)

(b) Credit risk (Continued)

(iv) Credit risk of other receivables (excluding lease receivables)

Loans and advances are presented in prepayments other receivables and other assets in the consolidated statements of financial position

and subject to the expected credit loss model. The Group developed credit policies and operational implementation rules for loans and

advances in accordance with the requirements of relevant state regulatory authorities and implemented standardized management over the

entire process of credit granting. In addition the Group further improved the systems for credit risk monitoring and early warning and defective

credit extension management. The Group actively responded to the changes in the credit environment regularly analyzed the situation and

dynamic of credit risks and took risk control measures on a forward-looking basis. The Group also established an optimization management

mechanism for defective credit and accelerated the optimization progress of defective credit to avoid non-performing loans.For other receivables excluding lease receivables and loans and advances the Group accounts for its credit risk by appropriately providing

for expected credit losses on a timely basis. To assess whether there is a significant increase in credit risk in other receivables the Group

compares the risk of a default occurring on the assets at the end of each reporting period with the risk of default at the date of initial recognition.It considers available reasonable supportive forward-looking information. Especially the following indicators are incorporated:

* external credit rating of the counterparty (as far as available);

* actual or expected significant adverse changes in business financial or economic conditions that are expected to cause a significant

change to the counterparty’s ability to meet its obligations;

* actual or expected significant changes in the operating results of the counterparty; and

* significant expected changes in the performance and behavior of the counterparty including changes in the payment status of the

counterparty

Based on historical experiences other receivables from related parties were settled within 12 months after upon maturity hence the expected

credit loss is minimal.As stated in note 2.1(g) impairment on other receivables accounted as amortized cost is measured as either 12-month ECL or lifetime ECL.On such basis the following table sets forth the loss allowance for other receivables as at December 31 2024 and 2023:

Stage 1 Stage 2 Stage 3

12-month ECL Lifetime ECL Lifetime ECL Total

RMB’000 RMB’000 RMB’000 RMB’000

As at December 31 2024

Expected credit loss rate 0.34% N/A 100.00% 8.33%

Gross carrying amounts 3694742 – 322238 4016980

Allowance for impairment (12573) – (322238) (334811)

As at December 31 2023

Expected credit loss rate 0.76% N/A 96.71% 7.66%

Gross carrying amounts 4502235 – 348803 4851038

Allowance for impairment (34101) – (337315) (371416)116 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

3. Financial Risk Management (Continued)

3.1 Financial risk factors (Continued)

(c) Liquidity risk

The Group aims to maintain sufficient cash and cash equivalents. Due to the dynamic nature of the underlying businesses the Group maintains

flexibility in funding by maintaining adequate balances of such cash and cash equivalents.The table below analyzes the Group’s financial liabilities by relevant maturity groupings based on the remaining period since the end of the

reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows or the

carrying amount of the financial liabilities to be delivered.Less than Between Between Over Carrying

1 year 1 and 2 years 2 and 5 years 5 years Total amount

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At December 31 2024

Financial liabilities at fair value through

profit or loss 105464 – – – 105464 105464

Trade and other payables (excluding

salaries wages and benefits

payables tax payables and other

non-financial liabilities) 37349615 56513 – – 37406128 37406128

Borrowings 19445318 8930398 9647915 10496015 48519646 44684382

Lease liabilities 6102698 4374621 2913796 1595481 14986596 12595797

Total 63003095 13361532 12561711 12091496 101017834 94791771

At December 31 2023

Financial liabilities at fair value through

profit or loss 92120 – – – 92120 92120

Trade and other payables (excluding

salaries wages and benefits

payables tax payables and other

non-financial liabilities) 35775997 563 – – 35776560 35776560

Borrowings 23358218 4426187 16910274 11972971 56667650 52706015

Lease liabilities 6102697 4569459 2529679 1784760 14986595 13808460

Total 65329032 8996209 19439953 13757731 107522925 102383155Annual Report 2024 S.F. Holding Co. Ltd. 117

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

117

3. Financial Risk Management (Continued)

3.2 Capital management

The primary objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a going concern and to maintain

healthy capital ratios in order to support its business and maximize shareholders’ value.The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of

the underlying assets. To maintain or adjust the capital structure the Group may adjust the dividend payment to shareholders return capital

to shareholders or issue new shares. The Group is not subject to any externally imposed capital requirements. No changes were made in the

objectives policies or processes for managing capital during the year ended December 31 2024.The Group monitors capital on the basis of the asset-liability ratio and the asset-liability ratio as at December 31 2024 and 2023 were as follows:

As at December 31

20242023

RMB’000 RMB’000

Total assets 213824213 221490655

Total liabilities 111488992 118206995

Asset-liability ratio 52.14% 53.37%

3.3 Fair value estimation

The table below analyzes the Group’s financial instruments carried at fair value as at December 31 2024 and 2023 by level of the inputs to

valuation techniques used to measure fair value. Such inputs are categorized into three levels within a fair value hierarchy as follows:

* Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);

* Inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly (that is as prices) or

indirectly (that is derived from prices) (level 2); and

* Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs) (level 3).118 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

3. Financial Risk Management (Continued)

3.3 Fair value estimation (Continued)

As at December 31 2024 and 2023 the financial assets measured at fair value on a recurring basis by the above three levels were analyzed

below:

Level 1 Level 2 Level 3 Total

RMB’000 RMB’000 RMB’000 RMB’000

As at December 31 2024

Non-current:

Financial assets at FVPL

– Industry fund investments – – 331815 331815

– others – – 145601 145601

Financial assets at FVOCI

– Equity investment in entities at fair value 1033218 – 7198776 8231994

Current:

Financial assets at FVPL

– Structured deposits – – 11015904 11015904

– Fund investment and others 78 2797 227377 230252

Financial assets at FVOCI

– Notes held for sale – 170913 – 170913

As at December 31 2023

Non-current:

Financial assets at FVPL

– Industry fund investments – – 499320 499320

– others – – 90676 90676

Financial assets at FVOCI

– Equity investment in entities at fair value 2418842 – 7070693 9489535

Current:

Financial assets at FVPL

– Structured deposits – – 6542881 6542881

– Fund investment and others 78 354 266429 266861

Financial assets at FVOCI

– Notes held for sale – 99978 – 99978

The fair value of financial instruments traded in an active market is determined at the quoted market price; and the fair value of those not

traded in an active market is determined by the Group using valuation technique. The valuation models used mainly comprise discounted cash

flow model and market comparable company model. The major inputs of the valuation models include expected rate of return and discount

of lack of market liquidity.Annual Report 2024 S.F. Holding Co. Ltd. 119

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

119

3. Financial Risk Management (Continued)

3.3 Fair value estimation (Continued)

The changes in Level 3 assets are analyzed below:

Financial assets

Financial assets at FVPL at FVOCI

Current Non-Current

Fund

Structured investment Fund Equity

deposits and others investment Others investments

Opening balance 6542881 266429 499320 90676 7070693

Additions 89812000 30000 11114 10000 34

Transfer to Level 1 – 121537 (93125) 96321 –

Disposals/settlements (85791425) (194623) (42595) – (1302)

Changes in fair value recognized in profit or loss 452448 (2738) (47111) (52365) –

Changes in fair value recognized in other

comprehensive income – – – – (97670)

Currency translation differences – 6772 4212 969 227021

Closing balance 11015904 227377 331815 145601 7198776

The Group has assessed that the fair values of cash and cash equivalents restricted bank deposits trade receivables trade and note payables

financial assets included in prepayments and other receivables financial liabilities included in other payables and accruals short-term bank

borrowings and short-term debentures approximate to their carrying amounts largely due to the short-term maturities of these instruments.For the year ended December 31 2024 there were no significant transfers among Level 1 2 and 3 of fair value measurements.120 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

3. Financial Risk Management (Continued)

3.3 Fair value estimation (Continued)

The following table summarizes the quantitative information about the significant unobservable inputs used in level 3 fair value measurements

and the sensitivity analysis of fair value to the inputs:

Fair value Range of inputs

As at December 31 Significant (probability-

Valuation unobservable weighted

Description 2024 2023 technique(s) input(s) average) Sensitivity of fair value to the input(s)

RMB’000 RMB’000

Current:

Financial assets at FVPL

– Structured deposits 11015904 6542881 Discounted Expected rate 1.40%-4.00% 10% increase/decrease in expected rate of

cash flow 　of return 　return would result in increase/decrease

in fair value by 0.03%-0.04%

– Fund investment and others 227377 266429 Adjusted net Adjusted net N/A 10% increase/decrease in adjusted net

assets value 　assets value 　assets value would result in increase/

decrease in fair value by 10%

Non-current:

Financial assets at FVPL

– Industry fund investments 331815 499320 Adjusted net Adjusted net N/A 10% increase/ decrease in adjusted net

assets value 　assets value 　assets value would result in increase/

decrease in fair value by 10%

– Others 145601 90676 Recent transaction N/A N/A N/A

price

Financial assets at FVOCI

– Equity investment in entities at fair 7198776 7070693 Recent transaction Discount for lack 13%-17% 10% increase/decrease in discount for lack

value 　price or a 　of marketability 　of marketability would result in decrease/

combination 　increase in fair value by 1.55%-2.11%

of observable and

unobservable

inputs

18919473 14469999Annual Report 2024 S.F. Holding Co. Ltd. 121

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

121

4. Critical Accounting Estimates and (c) Impairment of goodwill

Judgements The Group determines whether goodwill is impaired at least on an

annual basis. The recoverable amount of goodwill is determined at

The Group makes estimates and judgements that affect the higher of fair value less costs of disposal and value in use amount.reported amounts of revenues expenses assets and liabilities and The calculations of value in use amount require use of estimates.the disclosure of contingent liabilities in these financial statements.Estimates and judgements are continually assessed based on The Group has engaged independent external valuers to assist

historical experience and other factors including expectations them in performing annual goodwill impairment assessment on

of future events that are believed to be reasonable under the KLN CGUs and Fenghao Supply Chain CGUs. Based on the

circumstances. valuation report issued by the independent external valuers the

Group uses the present value of expected future cash flows to

In the process of applying the Group’s accounting policies determine the value in use for both CGUs. Due to the uncertainty

management has made the following judgements and accounting in the development of the economic environment revenue growth

estimation which have the significant effect on the amounts rate over the forecast period terminal revenue growth rate margin

recognized in the financial statements. of earnings before interests and tax and pre-tax discount rate used

in the calculation of the present value of the future cash flows are

4.1 Critical accounting estimate and its key also subject to uncertainty.

assumption (d) Fair value of financial instruments determined

using valuation techniques

(a) Measurement of the expected credit losses

Fair value in the absence of an active market is estimated by using

For financial assets and contract assets at amortized cost the

valuation techniques applying currently applicable and sufficiently

Group calculates expected credit losses based on exposure at

available data and the valuation techniques supported by other

default and expected credit loss rates.information mainly include market approach and income approach

The Group refers to internal historical information such as credit reference to the recent arm’s length transactions current market

losses and considers the impact of historical credit loss experience value of another instrument which is substantially the same and by

according to current situation and forward-looking information to using the discounted cash flow analysis and option pricing models.determine expected credit loss rates. And management takes the

When using valuation techniques to determine the fair value of

customer’s credit status credit history operating status as well

financial instruments the Group would choose the input value in

as collaterals the guarantee ability of the guarantor and other

consistent with market participants considering the transactions

information into consideration.of related assets and liabilities. All related observable market

The Group monitors and reviews relevant assumptions about parameters are considered in priority including interest rate foreign

expected credit losses regularly. Where there is a difference exchange rate commodity prices and share prices or index. When

between the actual bad debts and the original estimate such related observable parameters are unavailable or inaccessible the

difference will affect the Group’s provision for bad debts of the Group uses unobservable parameters and makes estimates for

above assets in the future period. credit risk market volatility and liquidity adjustments.Using different valuation techniques and parameter assumptions

(b) Estimated impairment of long-term assets may lead to significant difference of fair value estimation.(other than goodwill)

The Group tests whether property plant and equipment

right-of-use assets investment properties intangible assets (other

than goodwill) and other non-current assets have been impaired

in accordance with the accounting policy stated in Note 2.1(g) to

the consolidated financial statements. The recoverable amount

of the cash-generating unit has been determined based on the

higher of its value in use and its fair value less costs of disposal.The cash flow projections used to determine the value in use of a

cash-generating unit is based on significant assumptions such as

growth rate and discount rate applied to the projected cash flows.These assumptions may be affected by unexpected changes in

future market or economic conditions.122 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

4. Critical Accounting Estimates and 5. Revenue and Segment Information

Judgements (Continued)

Operating segments are reported in a manner consistent with the

internal reporting provided to the chief operating decision-maker

(e) Uncertain tax position and recognition of (“CODM”). The CODM who is responsible for allocating resources

current and deferred income tax assets and assessing performance of the operating segments has been

The Group is subject to income taxes in numerous jurisdictions. identified as the executive management team that makes strategic

Significant judgment is required in determining the worldwide decisions.provision for income taxes. Where the final tax outcome of these

matters is different from the amounts that were initially recorded (a) CODM reviews the Group’s internal

such differences will impact current income tax and deferred income reporting in order to assess

tax in the period in which such determination is made.performance and allocate resources

Deferred tax assets are recognized for unused tax losses and

deductible temporary difference to the extent that it is probable The CODM identifies operating segments based on the internal

that taxable profit will be available against which the losses and organization structure management requirements and internal

deductible temporary difference and the carry forward of unused reporting system and discloses segment information of reportable

tax credits and unused tax losses can be utilized. Significant segments which is determined on the basis of operating segments.management judgement is required to determine the amount An operating segment is a component of the Group that satisfies

of deferred tax assets that can be recognized based upon the all of the following conditions: (1) the component is able to

likely timing and level of future taxable profits together with future earn revenues and incur expenses from its ordinary activities; (2)

tax planning strategies. To determine the future taxable profits whose operating results are regularly reviewed by the Group’s

reference was made to the latest available profit forecast. The key management to make decisions about resources to be allocated to

assumptions adopted in the future taxable profit forecast include the segment and to assess its performance and (3) for which the

revenue growth rates and gross margin rates. information on financial position operating results and cash flows

is available to the Group. If two or more operating segments have

similar economic characteristics and satisfy certain conditions they

4.2 Critical accounting judgements are aggregated into one single operating segment.

(a) Judgements on whether the Group can The segment businesses are separately presented as the express

exercise significant influence on invested entity and freight delivery segment the intra-city on-demand delivery

segment and supply chain and international segment. The types

The Group adopts equity method to those entities that the Group of services from which reportable segments derive revenue are

has significant influence over. In assessing if the Group has such listed below:

a kind of influence management would normally consider one or

more of the following facts and circumstances: (i) share rights of * Express and freight delivery segment which provides

the investee entity; (ii) representation on the board of directors time-define express economy express cold chain and

or equivalent governing body of the investee; (iii) participation in pharmaceuticals logistics service as well as freight service;

policy-making processes including participation in decisions about * Intra-city on-demand delivery segment which provides intra-city

dividends or other distributions; (iv) material transactions between delivery for merchants and consumers and last-mile delivery

the entity and its investee; (v) interchange of managerial personnel; services;

or (vi) provision of essential technical information.* Supply chain and international segment which provides supply

(b) Scope of consolidation chain services international express service and international

freight forwarding service.Consolidation is required only if control exists. The Group controls

an investee when it has all the following: (i) power over the Except for the above business segments the other segments did

investee including the assessment of other share party’s dispersion not have a material impact on the Group’s operating outcome and

of holding; (ii) exposure or rights to variable returns from its as such are not separately presented. Management monitors the

involvement with the investee; and (iii) the ability to use its power operating results of the Group’s business units separately for the

over the investee to affect the amount of the Group’s returns. These purpose of making decisions regarding resource allocation and

three factors cannot be considered in isolation by the Group in performance assessment.its assessment of control over an investee. Where the factors of Segment performance is assessed based on key performance

control are not apparent significant judgement is applied in the indicators. Transfer prices between operating segments are based

assessment which is based on an overall analysis of all of the on the amount stated in the contracts agreed by both sides.relevant facts and circumstances.For the year ended December 31 2024 and 2023 no revenue from

The Group is required to reassess whether it controls the investee a single customer exceeded 10% or more of the total revenue.if facts and circumstances indicate a change to one or more of the

three factors of control.Annual Report 2024 S.F. Holding Co. Ltd. 123

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

123

5. Revenue and Segment Information (Continued)

(a) CODM reviews the Group’s internal reporting in order to assess performance and allocate

resources (Continued)

Segment information for the year ended December 31 2024 is as follows:

Intra-city

Express and Supply chain on-demand

freight delivery and international delivery Undistributed Inter-segment

segment segment segment units elimination Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Revenue from external customers 200162392 74000342 9010521 1246804 – 284420059

Inter-segment revenue 7005842 1330524 6735562 4935844 (20007772) –

Cost of revenue 174198376 69415600 14681847 4913824 (17685535) 245524112

Profit/(loss) before income tax 13157825 (547911) 144963 824127 28257 13607261

Income tax expenses/(credits) 2176559 776502 12503 428207 (5355) 3388416

Net profit/(loss) 10981266 (1324413) 132460 395920 33612 10218845

Total assets 101068424 66091896 4519821 156845741 (114701669) 213824213

Total liabilities 70070634 58800172 1709205 78587251 (97678270) 111488992

Depreciation of right-of-use assets (Note 8) 5700363 1698857 13804 270764 (885005) 6798783

Depreciation and amortization

(excluding right-of-use assets) (Note 8) 7789173 1801114 48177 904420 (9410) 10533474

Net reversal of impairment losses/

(impairment losses) on financial

assets and contract assets 119609 156095 3118 40225 (47354) 271693124 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

5. Revenue and Segment Information (Continued)

(a) CODM reviews the Group’s internal reporting in order to assess performance and allocate

resources (Continued)

Segment information for the year ended December 31 2023 is as follows:

Express and Supply chain Intra-city on-

freight delivery and international demand delivery Undistributed Inter-segment

segment segment segment units elimination Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Revenue from external customers 186890137 62859302 7371250 1288714 – 258409403

Inter-segment revenue 12231353 733174 5029453 4430069 (22424049) –

Cost of revenue 171457160 58474528 11606756 4372537 (20135303) 225775678

Profit/(loss) before income tax 10602204 (328849) 48327 143788 21035 10486505

Income tax expenses/(credits) 2149342 205652 (2268) 229825 (7655) 2574896

Net profit/(loss) 8452862 (534501) 50595 (86037) 28690 7911609

Total assets 103171690 64308117 4038844 186550844 (136578840) 221490655

Total liabilities 72928079 53658452 1218597 84432442 (94030575) 118206995

Depreciation of right-of-use assets (Note 8) 6083423 1707837 27188 67026 (672411) 7213063

Depreciation and amortization

(excluding right-of-use assets) (Note 8) 7549542 1651130 52445 874960 (22033) 10106044

Net reversal of impairment losses/

(impairment losses) on financial

assets and contract assets (111509) 82879 3668 67481 (75999) (33480)Annual Report 2024 S.F. Holding Co. Ltd. 125

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

125

5. Revenue and Segment Information (Continued)

(b) The Group’s business operates in three main geographical areas even though they are

managed on a worldwide basis

The Group’s revenue by geographical areas is analyzed based on the following criteria:

Revenue from operations within the PRC excluding Hong Kong Macau and Taiwan is classified as within mainland China operations. Revenue

from operations within Hong Kong Macau and Taiwan regions is classified as Hong Kong Macau Taiwan operations while revenue from

operations in other overseas markets is classified as other international operations.Year ended December 31

20242023

RMB’000 RMB’000

Within mainland China 242796156 223510607

Hong Kong Macau Taiwan 9467291 9134850

Other international 32156612 25763946

Total 284420059 258409403

The non-current assets information below is based on the locations of the assets and exclude financial instruments and deferred tax assets.As at December 31

20242023

RMB’000 RMB’000

Within mainland China 92143600 95919000

Hong Kong Macau Taiwan 5304613 5293887

Other international 16394244 16575617

Total 113842457 117788504126 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

5. Revenue and Segment Information (Continued)

(c) Disaggregation of revenue

In the following table revenue of the Group from contracts with customers is disaggregated by timing of satisfaction of performance obligations.The table also includes a reconciliation to the segment information in respect of revenue of the Group that is disclosed in the operating

segment Note 5(a).Year ended December 31 2024

Logistics and

freight forwarding

services Sales of goods Others Total

RMB’000 RMB’000 RMB’000 RMB’000

Revenue from main operations

At a point in time – 6042752 456009 6498761

Over time 276275771 – 881045 277156816

Lease income – – 365962 365962

Total 276275771 6042752 1703016 284021539

Revenue from other operations

At a point in time – – 79524 79524

Over time – – 131414 131414

Lease income – – 187582 187582

––398520398520

Total 276275771 6042752 2101536 284420059Annual Report 2024 S.F. Holding Co. Ltd. 127

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

127

5. Revenue and Segment Information (Continued)

(c) Disaggregation of revenue (Continued)

Year ended December 31 2023

Logistics and

freight forwarding

services Sales of goods Others Total

RMB’000 RMB’000 RMB’000 RMB’000

Revenue from main operations

At a point in time – 5626072 306401 5932473

Over time 251127665 – 619037 251746702

Lease income – – 307405 307405

25112766556260721232843257986580

Revenue from other operations

At a point in time – – 100907 100907

Over time – – 136465 136465

Lease income – – 185451 185451

––422823422823

Total 251127665 5626072 1655666 258409403128 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

6. Other Income

Year ended December 31

20242023

RMB’000 RMB’000

Government grants (Note (a)) 679226 1983551

Dividend income 1005 2438

Others 309509 295213

Total 989740 2281202

Note:

(a) The government grants were mainly incentives provided by local government authorities in the PRC including various forms of

government financial incentives and tax preferences to reward the Group’s support and contribution to the development of local

economies. As at December 31 2024 and 2023 there were no unfulfilled conditions or contingencies relating to these government

grants.

7. Other Gains Net

Year ended December 31

20242023

RMB’000 RMB’000

Gains on disposal of investments in associates and joint ventures 89622 21441

Gains on disposal of investments in subsidiaries (Note 36(b)) 80615 268204

Fair value changes in financial assets at FVPL 509717 529513

Losses on disposal of property plant and equipment right-of-use assets

and other non-current assets (60228) (53891)

Impairment of inventories property plant and equipment and other non-current assets (141622) (62390)

Net exchange gains/(losses) 82290 (96381)

Gains on repurchase of corporate bonds 87779 –

Others (279300) (198022)

Total 368873 408474Annual Report 2024 S.F. Holding Co. Ltd. 129

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

129

8. Expenses by Nature

Expenses included in cost of revenue selling and marketing expenses general and administrative expenses and research and development

expenses are analyzed as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Labour outsourcing cost 97445480 88615879

Transportation expenses 54096591 44578173

Transportation outsourcing cost 39197467 38352035

Employee benefit expenses (Note 9) 33195660 31776779

Depreciation and amortization (excluding right-of-use assets) 10533474 10106044

Rent and venue usage expenses 7457712 7100757

Depreciation of right-of-use assets (Note 15) 6798783 7213063

Auditor’s remuneration 62517 64508

Others 21098612 21011392

Total 269886296 248818630

Note:

(a) Government grants amounting to approximately RMB995635000 and RMB164944000 had been recognized as deduction in the

cost of revenue for the year ended December 31 2024 and 2023 respectively.

9. Employee Benefit Expenses

(a) Employee benefit expenses are analyzed as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Salaries wages and bonuses 27655159 26127739

Share-based compensation expenses (Note 33) 80494 543046

Contributions to pension plans 1461557 1301124

Other employee benefits 3998450 3804870

Total 33195660 31776779130 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

9. Employee Benefit Expenses (Continued)

(b) Directors’ and supervisors’ remuneration

Salaries wages

bonuses and

benefits in

kind (including Share-based

contributions to compensation

Fees pension plans) expense Total

RMB’000 RMB’000 RMB’000 RMB’000

Year ended December 31 2024

Executive Directors

Mr. Wang Wei – 1309 – 1309

Mr. Ho Chit 305 7543 1735 9583

Ms. Wang Xin 133 3464 749 4346

Mr. Zhang Dong (ii) – 1685 1153 2838

Mr. Xu Bensong (i) – 403 124 527

Independent non-executive Directors

Mr. CHAN Charles Sheung Wai – 680 – 680

Mr. Lee Carmelo Ka Sze – 680 – 680

Dr. Ding Yi – 680 – 680

Supervisors

Mr. Shum Tze Leung – 315 – 315

Ms. Wang Jia – 1450 – 1450

Ms. Li Juhua – 1842 – 1842

Mr. Zhang Shun – 940 – 940

Mr. Liu Jilu – – – –

Total 438 20991 3761 25190Annual Report 2024 S.F. Holding Co. Ltd. 131

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

131

9. Employee Benefit Expenses (Continued)

(b) Directors’ and supervisors’ remuneration (Continued)

Salaries wages

bonuses and

benefits in

kind (including Share-based

contributions to compensation

Fees pension plans) expense Total

RMB’000 RMB’000 RMB’000 RMB’000

Year ended December 31 2023

Executive Directors

Mr. Wang Wei – 1161 – 1161

Mr. Ho Chit 426 6240 2945 9611

Ms. Wang Xin – 3120 2945 6065

Mr. Zhang Dong (ii) – 2626 2945 5571

Independent non-executive Directors

Mr. CHAN Charles Sheung Wai – 680 – 680

Mr. Lee Carmelo Ka Sze – 680 – 680

Dr. Ding Yi – 680 – 680

Supervisors

Mr. Shum Tze Leung – 641 – 641

Ms. Wang Jia – 1148 – 1148

Ms. Li Juhua – 1692 – 1692

Mr. Zhang Shun – 766 – 766

Mr. Liu Jilu – – – –

Total 426 19434 8835 28695

Notes:

(i) Mr. Xu Bensong was appointed as an executive director on October 30 2024.(ii) Mr. Zhang Dong resigned as an executive director on June 26 2024.132 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

9. Employee Benefit Expenses (Continued)

(c) Five highest paid individuals

The five individuals whose emoluments were the highest in the Group for the years ended December 31 2024 and 2023 include 1 and 3

directors respectively whose emoluments are reflected in the analysis shown in Note 9(b) respectively. The emoluments paid to the remaining

4 and 2 individuals during the years ended December 31 2024 and 2023 respectively are as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Salaries wages bonuses and benefits in kind (including contributions to pension plans) 15020 6142

Share-based compensation expenses 2972 5890

Total 17992 12032

The emoluments of the above individuals fell within the following bands:

Year ended December 31

20242023

HK$3500001 to HK$4000000 – –

HK$4000001 to HK$4500000 – –

HK$4500001 to HK$5000000 2 –

HK$5000001 to HK$5500000 – –

HK$5500001 to HK$6000000 – –

HK$6000001 to HK$6500000 – 1

HK$6500001 to HK$7000000 2 –

HK$7000001 to HK$7500000 – 1

HK$7500001 to HK$8000000 – –

HK$8000001 to HK$8500000 – –Annual Report 2024 S.F. Holding Co. Ltd. 133

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

133

10. Finance Income and Costs

Year ended December 31

20242023

RMB’000 RMB’000

Finance income:

Interest income on deposits in financial institutions 617713 633373

Finance costs:

Interest expenses on borrowings 1912201 1808850

Interest expenses on lease liabilities (Note 15 (b)) 503871 564374

Less: Interest capitalized (42753) (103524)

23733192269700

Finance costs net 1755606 1636327

The average capitalization rates for the year ended December 31 2024 and 2023 used to determine the amount of borrowing costs eligible

for capitalization were 2.83% and 2.75% respectively.

11. Income Tax Expense

The following table sets forth the component of income tax expense of the Group for the years ended December 31 2024 and 2023

respectively:

Year ended December 31

20242023

RMB’000 RMB’000

Current income tax 3640127 3340596

Deferred income tax (Note 18) (251711) (765700)

Total 3388416 2574896134 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

11. Income Tax Expense (Continued)

Reconciliation between income tax expenses and profit before income tax at applicable tax rates for the years ended December 31 2024

and 2023:

Year ended December 31

20242023

RMB’000 RMB’000

Profit before income tax 13607261 10486505

Tax at the statutory tax rate of 25% (Note (a)) 3401815 2621626

Effects of different tax rates applicable to different jurisdictions (Note (b)) (217848) (211891)

Tax effect of non-taxable income (135435) (109495)

Adjustments of prior years (8410) (32451)

Tax effect of non-deductible expenses 528443 296602

Tax effect of preferential tax rate (Note (a)) (408664) (364417)

Tax losses and temporary differences not recognized 790710 879651

Reversal of previously recognized tax losses and temporary differences 260565 30752

Utilization of previously unrecognized tax losses and temporary differences (385547) (378149)

Recognition of tax losses and temporary differences not recognized in prior years (437213) (157332)

Total 3388416 2574896

(a) PRC corporate income tax (“PRC CIT”)

The income tax rate applicable to the principal subsidiaries in Mainland China is 25% except for certain subsidiaries which enjoy a preferential

income tax rate.For qualified small and micro-sized enterprises the annual taxable income up to RMB3000000 (inclusive) is subject to an effective CIT rate

of 5% from January 1 2023 to December 31 2027.Besides certain Group’s subsidiaries benefit from a preferential tax rate of 15% under the CIT Law if they are qualified as high and new

technology enterprises under relevant regulations or located in applicable PRC regions such as certain western regions and special economic

zone as specified in the relevant catalogue of encouraged industries subject to certain general restrictions described in the CIT Law and

the related regulations.(b) Corporate income tax in Hong Kong and other jurisdictions

(i) Hong Kong profits tax

Hong Kong profits tax has been provided for at the rate of 8.25% on assessable profits up to HKD2000000 and 16.5% on any assessable

profits over HKD2000000 for the years ended December 31 2024 and 2023.(ii) Corporate income tax in other jurisdictions

Income tax on profit arising from other jurisdictions including Macau Singapore Japan South Korea the United States and Thailand has

been calculated on the estimated assessable profit for the year at the respective rates prevailing in the relevant jurisdictions ranging from

12% to 24% for the years ended December 31 2024 and 2023.Annual Report 2024 S.F. Holding Co. Ltd. 135

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

135

11. Income Tax Expense (Continued)

(c) OECD Pillar Two model rules

The Group is within the scope of the Pillar Two model rules released by the Organization for Economic Co-operation and Development (“OECD”).The Pillar Two legislation had become effective in certain jurisdictions on January 1 2024. The Group applies the exception to recognizing and

disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes as provided in the amendments to IAS 12.Under the Pillar Two legislation the Group is liable to pay a top-up tax for difference between its Global Anti-Base Erosion (“GloBE”) effective

tax rate in each jurisdiction and the 15% minimum rate. The Group management’s assessment indicates that the quantitative impact of the

Pillar Two legislation is insignificant to the Group.

12. Dividends

Dividends declared and paid to the equity shareholders of the Company for the years ended December 31 2024 and 2023 are as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Interim dividend paid of RMB40 cents per ordinary share 1918166 –

Special dividend paid of RMB100 cents per ordinary share 4795416 –

6713582–

Final dividend paid of RMB60 cents per ordinary share 2889210 1213616

96027921213616

(a) Interim dividend and special dividend

An interim dividend for the six months ended June 30 2024 of RMB40 cents per ordinary share (tax inclusive) and a special dividend of RMB1

per ordinary share (tax inclusive) were approved by the shareholders at the first extraordinary general meeting on October 29 2024. The total

amount of the special dividend was RMB6713582000.(b) Final dividend for the year ended December 31 2023 and 2022

On April 30 2024 the Company convened its annual shareholders’ meeting to implement the profit distribution plan for the year ended

December 31 2023. The Company declared a cash dividend of RMB60 cents per share (tax included) (for the year ended December 31

2022: RMB25 cents per share). The total amount of the cash dividend was RMB2889210000 (for the year ended December 31 2022:

RMB1213616000).(c) Proposed final dividend for the year ended December 31 2024

The Board resolved to propose to the Shareholders in the forthcoming annual general meeting for the distribution of a final dividend of

RMB44 cents per share for the year ended December 31 2024. The proposal for the distribution of the final dividend above is subject to

the consideration and approval of the Shareholders at the forthcoming annual general meeting. These financial statements do not reflect this

dividend payable.136 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

13. Earnings Per Share

(a) Basic

Basic earnings per share (“EPS”) is calculated by dividing the profit attributable to owners of the Company by the weighted average number

of ordinary shares in issue during the year.Year ended December 31

20242023

Profit attributable to owners of the Company (RMB’000) 10170427 8234493

Weighted average number of shares in issue (in thousands) 4828432 4850498

Basic EPS (RMB per share) 2.11 1.70

(b) Diluted

The share options granted by the Company have potential dilutive effect on the EPS. Diluted EPS is calculated by adjusting the weighted

average number of ordinary shares outstanding by the assumption of the conversion of all potential dilutive ordinary shares arising from share

options. For the year ended December 31 2024 the share options granted by the Company had anti-dilutive effect on the EPS.Year ended December 31

20242023

Profit attributable to owners of the Company (RMB’000) 10170427 8234493

Profit attributable to owners of the Company for the calculation of Diluted EPS

(RMB’000) 10170427 8234493

Weighted average number of shares in issue (in thousands) 4828432 4850498

Adjustment for share options (in thousands) – 4484

Weighted average number of shares for the calculation of Diluted EPS (in thousands) 4828432 4854982

Diluted EPS (RMB per share) 2.11 1.70Annual Report 2024 S.F. Holding Co. Ltd. 137

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

137

14. Property Plant and Equipment

Aircraft aircraft

engines rotables Computers

Freehold land and high-value Machinery and Transportation and electronic Office and Leasehold Construction

and buildings maintenance equipment vehicles equipment other equipment improvements in progress Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Cost

As at January 1 2024 29185339 15497033 14999446 7434951 5126023 10839453 7335820 4050208 94468273

Additions (Note (c)) 977191 352831 348685 704644 346954 214167 196240 5989057 9129769

Business combinations – – 6 3938 4068 2109 – – 10121

Disposals (4778) (144515) (394096) (1119751) (342241) (728592) (159304) (30454) (2923731)

Disposal of subsidiaries (309843) – – – – – (42518) (18209) (370570)

Transfer/reclassification 1497561 1878760 1347203 128 100411 40340 939456 (7004900) (1201041)

Currency translation differences 136690 – 57768 33106 (115) 6516 (43556) – 190409

As at December 31 2024 31482160 17584109 16359012 7057016 5235100 10373993 8226138 2985702 99303230

Accumulated depreciation

As at January 1 2024 2918323 6643870 4363601 4806341 3779913 6638702 5194142 – 34344892

Charge for the year (Note (b)) 858634 1438240 1670007 1117240 621275 1314585 1066798 – 8086779

Business combinations – – 6 2633 3008 1499 – – 7146

Disposals (105) (117181) (185311) (1030581) (312993) (521867) (126129) – (2294167)

Disposal of subsidiaries (8731) – – – – – (20767) – (29498)

Transfer/reclassification (114207) – – – – – 153 – (114054)

Currency translation differences 11861 – 31284 17601 (2057) (6513) (18688) – 33488

As at December 31 2024 3665775 7964929 5879587 4913234 4089146 7426406 6095509 – 40034586

Accumulated impairment

As at January 1 2024 – – 1633 – – 8 – 17324 18965

Charge for the year – – 43195 40393 8245 1276 127 885 94121

Disposal of subsidiaries – – – – – – – (18209) (18209)

Currency translation differences – – (256) 123 (330) (75) – – (538)

As at December 31 2024 – – 44572 40516 7915 1209 127 – 94339

Net book value

As at December 31 2024 (Note (a)) 27816385 9619180 10434853 2103266 1138039 2946378 2130502 2985702 59174305138 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

14. Property Plant and Equipment (Continued)

Aircraft aircraft

engines rotables Computers

Freehold land and high-value Machinery and Transportation and electronic Office and Leasehold Construction

and buildings maintenance equipment vehicles equipment other equipment improvements in progress Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Cost

As at January 1 2023 20737655 13343778 11050506 7360813 5145818 10964878 6415027 11151005 86169480

Additions (Note (c)) 1272496 343764 346663 1189776 425863 381899 135955 8109500 12205916

Business combinations 84384 – 15557 3884 2924 5204 – – 111953

Disposals (22595) (385452) (304089) (1144248) (588257) (530076) (114085) (94900) (3183702)

Disposal of subsidiaries (44337) – (18218) (2652) (8462) (39382) (49432) – (162483)

Transfer/reclassification 7096850 2194943 3838146 399 134166 69534 938141 (15115397) (843218)

Currency translation differences 60886 – 70881 26979 13971 (12604) 10214 – 170327

As at December 31 2023 29185339 15497033 14999446 7434951 5126023 10839453 7335820 4050208 94468273

Accumulated depreciation

As at January 1 2023 2208458 5577042 3210478 4843978 3595671 5480050 4318624 – 29234301

Charge for the year (Note (b)) 695828 1361913 1253916 1011297 725963 1588891 974378 – 7612186

Business combinations 17726 – 10726 3479 2749 4380 – – 39060

Disposals (12780) (295085) (145085) (1061855) (549407) (415938) (66885) – (2547035)

Disposal of subsidiaries (6677) – (4888) (2046) (6592) (11066) (36657) – (67926)

Transfer/reclassification 23923 – – – – – – – 23923

Currency translation differences (8155) – 38454 11488 11529 (7615) 4682 – 50383

As at December 31 2023 2918323 6643870 4363601 4806341 3779913 6638702 5194142 – 34344892

Accumulated impairment

As at January 1 2023 – – 1633 – – 28734 – 1145 31512

Charge for the year – – – – – – – 17443 17443

Disposals – – – – – (28726) – (1264) (29990)

As at December 31 2023 – – 1633 – – 8 – 17324 18965

Net book value

As at December 31 2023 (Note (a)) 26267016 8853163 10634212 2628610 1346110 4200743 2141678 4032884 60104416Annual Report 2024 S.F. Holding Co. Ltd. 139

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

139

14. Property Plant and Equipment (Continued)

Notes:

(a) Certain property plant and equipment with a net carrying amount of approximately RMB490886000 as at December 31 2024 (2023:

RMB809139000) were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).(b) Depreciation amounting to approximately RMB8083172000 had been recognized in consolidated statement of profit or loss for the

year ended December 31 2024 (2023: RMB7586164000).(c) The additions of buildings for the years ended December 31 2024 and 2023 mainly included the acquisition of assets through

acquisition of subsidiaries (Note 35(b)).

15. Lease

This note provides information for leases where the Group is a lessee.(a) Amounts recognized in the consolidated statement of financial position

As at December 31

20242023

RMB’000 RMB’000

Right-of-use assets

Buildings 12730196 13692555

Leasehold land and land use rights 6783528 6816476

Motor vehicles 81877 333921

Equipment and others 30028 47095

Total 19625629 20890047

Lease liabilities

Current 5501314 5769965

Non-current 7094483 8038495

Total 12595797 13808460

Additions to the right-of-use assets for the year ended December 31 2024 were approximately RMB6984602000 (2023: RMB6804625000).Leasehold land and land use rights with a net carrying amount of approximately RMB203922000 as at December 31 2024 (2023:

RMB292495000) were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).140 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

15. Lease (Continued)

(b) Amounts recognized in the consolidated statement of profit or loss

The consolidated statement of profit or loss shows the following amounts relating to leases:

Year ended December 31

20242023

RMB’000 RMB’000

Depreciation charge of right-of-use assets

Buildings 6442034 6874516

Leasehold land and land use rights 200618 191595

Motor vehicles 136327 126643

Equipment and others 19804 20309

Total 6798783 7213063

Interest expenses (Note 10) 503871 564374

Expense relating to short-term leases and low-value assets

(included in costs and expenses) 4041341 3601571

Total cash outflow for leases (included in operating and financing cash outflow) 11722206 11582911

The Group has various lease contracts that have not yet commenced as at December 31 2024 and 2023. The future lease payments for

these non-cancellable lease contracts are as below:

As at December 31

20242023

RMB’000 RMB’000

Within 1 year (including 1 year) 893228 1344393

Between 1 and 2 years (including 2 years) 529230 458299

Between 2 and 3 years (including 3 years) 489211 560409

Over 3 years 2733760 2834483

Total 4645429 5197584Annual Report 2024 S.F. Holding Co. Ltd. 141

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

141

16. Investment Properties

As at December 31

20242023

RMB’000 RMB’000

Cost

At the beginning of the year 6742097 5088473

Additions 25067 709420

Disposal of subsidiaries (202598) (1548)

Transfer/reclassification 1326722 944698

Exchange adjustment (37711) 1054

At the end of the year 7853577 6742097

Accumulated depreciation

At the beginning of the year 323377 213107

Charge for the year 164614 125712

Disposal of subsidiaries (10802) (45)

Transfer/reclassification 128572 (16471)

Exchange adjustment 6617 1074

At the end of the year 612378 323377

Net book value

At the end of the year (Note (a)) 7241199 6418720

Notes:

(a) Certain investment properties with a net carrying amount of approximately RMB111847000 as at December 31 2024 (2023:

RMB111124000) were pledged as securities for bank loan facilities and bank overdrafts granted to the Group (Note 26).(b) Valuation processes of the Group: The fair values of the investment properties were estimated by management or independent

professional property valuers as at December 31 2024 and 2023. The valuations are derived using direct comparison method

or income capitalization method. Direct comparison method is based on comparing the property to be valued directly with other

comparable properties which have recently been transacted. Income capitalization method is based on the capitalization of the net

rental income derived from the existing leases and/or achievable in existing market with reversionary income potential by adopting

appropriate capitalization rates. Capitalization is estimated by valuer based on the risk profile of the properties being valued.142 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

16. Investment Properties (Continued)

(b) Valuation processes of the Group (Continued)

The fair values of the investment properties were set out as follows:

As at December 31

20242023

RMB’000 RMB’000

Investment properties at fair value 8639880 7937199

(c) Leasing arrangements

The Group leases various offices and warehouses to lessees under non-cancellable operating lease agreements with rentals receivable monthly.The lease terms are mainly between 1 year and 5 years and the majority of lease agreements are renewable at the end of the lease period

at market rates. Minimum lease payments receivable on leases of investment properties are as follows:

As at December 31

20242023

RMB’000 RMB’000

Land and buildings:

Within 1 year (including 1 year) 418210 371269

Between 1 and 2 years (including 2 years) 314925 240171

Between 2 and 3 years (including 3 years) 223282 146234

Between 3 and 4 years (including 4 years) 148307 90435

Between 4 and 5 years (including 5 years) 113522 56615

Over 5 years 262618 206636

Total 1480864 1111360Annual Report 2024 S.F. Holding Co. Ltd. 143

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

143

17. Intangible Assets

Development Customer

expenditures Goodwill relationships Software Trademarks Others Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Cost

As at January 1 2024 129845 9572871 5952090 8134147 4966033 358340 29113326

Additions 560106 135524 – 46143 – 1145 742918

Business combinations – – 38576 1464 – 4781 44821

Disposals (25733) – – (188126) (4627) (2564) (221050)

Disposal of subsidiaries – – – (38) – – (38)

Transfer/reclassification (581729) – – 581729 – – –

Currency translation differences – 298405 171815 15870 191487 2021 679598

As at December 31 2024 82489 10006800 6162481 8591189 5152893 363723 30359575

Accumulated amortization

As at January 1 2024 – – 1150340 5778057 842331 211727 7982455

Charge for the year – – 339566 1494804 417402 26876 2278648

Business combinations – – – 1076 – – 1076

Disposals – – – (143063) (627) (987) (144677)

Disposal of subsidiaries – – – (38) – – (38)

Currency translation differences – – 28122 13522 59123 1473 102240

As at December 31 2024 – – 1518028 7144358 1318229 239089 10219704

Impairment

As at January 1 2024 – 2435 – 97428 4 6 99873

Charge for the year – – 15403 12632 – – 28035

Disposals – – – (24226) (4) – (24230)

As at December 31 2024 – 2435 15403 85834 – 6 103678

Net book value

As at December 31 2024 82489 10004365 4629050 1360997 3834664 124628 20036193144 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

17. Intangible Assets (Continued)

Development Customer

expenditures Goodwill relationships Software Trademarks Others Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Cost

As at January 1 2023 311757 9348179 5855067 7182341 4887350 337155 27921849

Additions 1077980 – – 99543 797 20943 1199263

Business combinations – 85219 – 14 11 – 85244

Disposals (7525) – – (210858) (92) (2284) (220759)

Disposal of subsidiaries – (10618) – (193930) – – (204548)

Transfer/reclassification (1252367) – – 1252367 – – –

Currency translation differences – 150091 97023 4670 77967 2526 332277

As at December 31 2023 129845 9572871 5952090 8134147 4966033 358340 29113326

Accumulated amortization

As at January 1 2023 – – 793438 4214372 584365 178022 5770197

Charge for the year – – 335626 1780594 247462 32068 2395750

Business combinations – – – 8 – – 8

Disposals – – – (144377) (22) (567) (144966)

Disposal of subsidiaries – – – (75249) – – (75249)

Currency translation differences – – 21276 2709 10526 2204 36715

As at December 31 2023 – – 1150340 5778057 842331 211727 7982455

Impairment

As at January 1 2023 – 2435 – 64595 4 6 67040

Charge for the year – – – 38853 – – 38853

Disposals – – – (6020) – – (6020)

As at December 31 2023 – 2435 – 97428 4 6 99873

Net book value

As at December 31 2023 129845 9570436 4801750 2258662 4123698 146607 21030998Annual Report 2024 S.F. Holding Co. Ltd. 145

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

145

17. Intangible Assets (Continued)

(a) Recognition of goodwill

The carrying amount of goodwill allocated to Cash-Generating Units or the groups of Cash-Generating Units (“CGUs”):

As at December 31

20242023

RMB’000 RMB’000

KLN CGUs 6138923 5889255

Fenghao Supply Chain CGUs 3184723 3082119

KEX CGUs 64508 –

SXH CGUs (Note (d)) 380138 367896

Others 236073 231166

Total 10004365 9570436

As stated in Note 2.1(e) goodwill would be tested for impairment annually. If the carrying amount exceeds its estimated recoverable amount

which is the higher of value in use and fair value less costs of disposal the difference of which would be recognized in profit and loss

immediately.The Group acquired KLN in 2021. KLN acquired Topocean and Pro-Med in 2022 and other subsidiaries in 2023. During the year ended

December 31 2024 the balance of goodwill increased mainly due to the acquisition of 100% shares of Business By Air SAS (“BBA”). The

management was of the view that the synergies among the operations of KLN Topocean Pro-Med BBA and other subsidiaries acquired

by KLN had gradually formed upon the completion of the above mentioned acquisitions. As a result the Group regarded KLN Topocean

Pro-Med BBA and other subsidiaries acquired by KLN as one CGUs.During the year ended December 31 2024 KLN distributed a special interim dividend by way of a distribution in specie of 907200000

shares of KEX indirectly held by KLN (representing approximately 52.1% of all issued KEX shares). After the distribution the Group received

an aggregate of 467373855 KEX shares representing approximately 26.8% of all issued KEX shares triggering a mandatory tender offer to

acquire all KEX shares in accordance with the requirements of the Thai Code (Securities and Exchange Act B.E. 2535 (1992) (as amended)

Notification of Capital Market Supervisory Board Tor Jor. 12/2554 Re: Rules Conditions and Procedures for the Acquisition of Securities for

Business Takeover (as amended) and any other relevant rules regulations and notifications issued thereunder). The Group made a tender

offer to acquire KEX shares with an offer price of THB5.50 per share. On March 26 2024 (“the date of reorganization”) the abovementioned

interim dividend distribution and tender offer were completed and the Group acquired in aggregate 1091818327 KEX shares representing

62.7% of all issued KEX shares.

Upon completion of the above transactions since KEX was no longer directly held and managed by KLN the Group reclassified the KLN CGUs

into two separate CGUs KEX CGUs and KLN CGUs (excluding KEX CGUs). The goodwill arising from the acquisition of KLN in 2021 was

reallocated by the Group on the basis of the relative values of the operation of KLN CGUs and KEX CGUs as at the date of the reorganization

through which goodwill of approximately RMB62430000 was reallocated to KEX CGUs.146 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

17. Intangible Assets (Continued)

(b) Impairment tests

The following table sets out the key assumptions used for value in use calculations of KLN CGUs and Fenghao Supply Chain CGUs:

Year ended December 31

20242023

Revenue growth rate over the forecast period 2.00%~15.30% 2.50%~16.64%

Terminal revenue growth rate 2.00% 2.00%~2.50%

Margin of earnings before interests and tax 0.03%~5.75% -0.20%~6.60%

Pre-tax discount rate 10.55%~13.40% 11.90%~14.00%

Various factors were taken into consideration when determine the appropriate terminal revenue growth rate used over the forecast period

including the long-term inflation rates of mainland China Hong Kong and US etc. This growth rate does not exceed the long-term average

growth rate for the market in which the relative business operates.Management determined budgeted margin of earnings before interests and tax and revenue growth rates based on historical performance

and its expectations of the market development.The pre-tax discount rates reflected the current market assessment of the time value of money and the risks specific to the business.(c) Impact of possible changes in key assumptions

The recoverable amount of KLN CGUs is estimated to exceed its carrying amount at December 31 2024 by approximately RMB1012 million

(2023: RMB1375 million).

The recoverable amount of Fenghao Supply Chain CGUs is estimated to exceed its carrying amount at December 31 2024 by approximately

RMB443 million (2023: RMB411 million).The management has considered and assessed reasonably possible changes for key assumptions and has not identified any instances that

could cause the carrying amount of each CGUs to exceed its respective recoverable amount.The recoverable amount of each CGUs would equal to its carrying amount if each key assumption was to change as follows with all other

variables held constant:

KLN CGUs As at December 31

20242023

Revenue growth rate over the forecast period 5.54%~8.54% 8.98%~12.05%

Terminal revenue growth rate 1.66% 1.50%

Margin of earnings before interests and tax 4.50%~5.44% 4.76%~5.41%

Pre-tax discount rate 13.76% 14.48%Annual Report 2024 S.F. Holding Co. Ltd. 147

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

147

17. Intangible Assets (Continued)

(c) Impact of possible changes in key assumptions (Continued)

Fenghao Supply Chain CGUs As at December 31

20242023

Revenue growth rate over the forecast period 1.42%~14.82% 2.02%~16.19%

Terminal revenue growth rate 1.43% 1.89%

Margin of earnings before interests and tax -0.54%~5.18% -0.55%~6.25%

Pre-tax discount rate 11.09% 12.41%

(d) Rebranding of SXH

On July 31 2018 (the “acquisition date”) the Group completed the acquisition of HAVI Logistics Services (Hong Kong) Ltd. and its subsidiaries

and recognized goodwill of approximately RMB351075000. This goodwill was allocated to HAVI Supply Chain CGUs on the acquisition date.In June 2024 HAVI was rebranded as SXH. The allocation of goodwill to the CGUs remained unchanged after the renaming.

18. Deferred Tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right of offsetting and when the deferred income taxes relate

to the same authority.The net amounts of deferred tax assets and liabilities after offsetting are as follows:

As at December 31

20242023

RMB’000 RMB’000

Deferred tax assets 5251652 5599191

Offsetting (2959658) (3335321)

Net deferred tax assets 2291994 2263870

Deferred tax liabilities 7374143 7886295

Offsetting (2959658) (3335321)

Net deferred tax liabilities 4414485 4550974148 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

18. Deferred Tax (Continued)

(a) Deferred tax assets

The movements in deferred tax assets before offsetting for the years ended December 31 2024 and 2023 are as follows:

Loss

allowances

for financial Unrealised

Amortization assets and profits from

and Accrued Lease non-current internal

depreciation Tax losses expenses liabilities assets transactions Others Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at January 1 2024 849888 900683 480077 2998695 174813 112374 82661 5599191

Acquisition and disposal of subsidiaries

net (8027) – – – – – – (8027)

Credited/(charged) to consolidated

statement of profit or loss 255044 (20891) (182972) (335196) 67096 (28151) (9014) (254084)

Charged to consolidated statement of

other comprehensive income – – – – – – – –

Currency translation differences (55073) (15386) 5390 (22866) 2507 – – (85428)

As at December 31 2024 1041832 864406 302495 2640633 244416 84223 73647 5251652

As at January 1 2023 502343 699863 551443 3187174 167412 144881 70426 5323542

Acquisition and disposal of subsidiaries

net – (3156) (276) – (24) – – (3456)

Credited/(charged) to consolidated

statement of profit or loss 293712 197626 (72605) (188653) 7579 (32507) 15745 220897

Charged to consolidated statement of

other comprehensive income – – – – – – (1839) (1839)

Currency translation differences 53833 6350 1515 174 (154) – (1671) 60047

As at December 31 2023 849888 900683 480077 2998695 174813 112374 82661 5599191Annual Report 2024 S.F. Holding Co. Ltd. 149

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

149

18. Deferred Tax (Continued)

(b) Deferred tax liabilities

The movements in deferred tax liabilities before offsetting for the years ended December 31 2024 and 2023 are as follows:

Appreciation of

assets acquired

in business Accelerated Changes Right-of-use

combinations tax depreciation in fair value assets Others Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At January 1 2024 2971543 1606602 359178 2830561 118411 7886295

Acquisition and disposal of subsidiaries net 14578 – – – – 14578

(Credited)/charged to consolidated

statement of profit or loss (207921) (39063) (11045) (314282) 66516 (505795)

Charged to consolidated statement of

other comprehensive income – – (3899) – – (3899)

Currency translation differences 72290 (51944) 8803 (20573) (25612) (17036)

At December 31 2024 2850490 1515595 353037 2495706 159315 7374143

At January 1 2023 3137944 1691289 356247 3052235 110817 8348532

Acquisition and disposal of subsidiaries net 7090 (286) – – – 6804

(Credited)/charged to consolidated

statement of profit or loss (213057) (113859) 2578 (222122) 1657 (544803)

Charged to consolidated statement of

other comprehensive income – – 353 – – 353

Currency translation differences 39566 29458 – 448 5937 75409

At December 31 2023 2971543 1606602 359178 2830561 118411 7886295150 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

18. Deferred Tax (Continued)

(c) Deferred tax assets not recognized

Deferred tax assets should be recognized when it is probable that taxable profits or taxable temporary differences will be available against

which the deferred tax asset can be utilised. Temporary differences will not be recognized as deferred tax assets if the management estimates

that they will not be recovered from taxable profits generated from continuing operations in the foreseeable future. The following table sets

forth the taxable temporary differences which were not recognized as deferred tax assets during the year:

As at December 31

20242023

RMB’000 RMB’000

Tax losses 18994127 18873618

Deductible temporary differences 1334659 1113144

Total 20328786 19986762

The maturity distribution of deductible losses on the Group’s unrecognized deferred tax assets is as follows:

As at December 31

20242023

RMB’000 RMB’000

2024–1270206

202524514133954921

202631923564468234

202728552193254460

202844211092146335

2029 and above 6074030 3779462

Total 18994127 18873618Annual Report 2024 S.F. Holding Co. Ltd. 151

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

151

19. Prepayments Other Receivables and Other Assets

As at December 31

20242023

RMB’000 RMB’000

Non-current:

Amounts due from related parties (Note 38(d)) 1181 1363

Deferred pilot recruitment costs 740683 805415

Prepayments (Note (a)) 576948 944833

Loans to employees – 15575

Finance lease receivables 38224 89380

Others 520580 492174

18776162348740

Less: Allowance for expected credit losses (Note (c)) (22581) (15178)

Total 1855035 2333562

Current:

Amounts due from related parties (Note 38(d)) 306027 1032722

Value-added tax recoverable 3366151 4641173

Prepayments (Note (b)) 2827788 3248665

Prepayments for listing expenses – 25068

Deposits 1536726 1523589

Cash to collect on behalf of customers 768814 659441

Loans to employees 16047 26454

Prepaid corporate income tax 384920 551327

Finance lease receivables 88800 226652

Others 1154081 1043853

1044935412978944

Less: Allowance for expected credit losses (Note (c)) (334811) (356238)

Total 10114543 12622706

(a) The balances of the Group mainly comprise prepaid construction equipment balances during the years ended December 31 2024

and 2023.(b) The balances of the Group mainly comprise prepaid freight and transportation costs during the year ended December 31 2024 and

2023.152 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

19. Prepayments Other Receivables and Other Assets (Continued)

(c) Movements on the Group’s allowance for expected credit losses of other receivables are as follows:

As at December 31

20242023

RMB’000 RMB’000

At the beginning of the year 371416 419002

Allowance for impairment 30403 8446

Written off as uncollectible (44971) (57009)

Exchange adjustment 544 977

At the end of the year 357392 371416

20. Investments in Associates and Joint Ventures

Movement of investments in associates is analyzed as follows:

Year ended December 31

20242023

RMB’000 RMB’000

At the beginning of the year 4120128 4209624

Additions and disposals net (355353) 100574

Share of profit net 49210 78524

Share of other comprehensive loss (1077) (5583)

Share of other equity movement 3011 13902

Dividend declared during the year (176711) (188104)

Exchange differences 43550 34484

Less: Impairment loss provided for the year (71908) (123293)

At the end of the year 3610850 4120128Annual Report 2024 S.F. Holding Co. Ltd. 153

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

153

20. Investments in Associates and Joint Ventures (Continued)

Movement of investments in joint ventures is analyzed as follows:

Year ended December 31

20242023

RMB’000 RMB’000

At the beginning of the year 3258703 3648376

Additions and disposals net (424159) (245348)

Share of loss net (119230) (145714)

Share of other equity movement (5) 40

Dividend declared during the year (7468) (892)

Exchange differences 839 2855

Less: Impairment loss provided for the year (115888) (614)

At the end of the year 2592792 3258703

The Group’s share of results of its associates and joint ventures are as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Aggregate attributable amounts of net loss (257816) (191097)

Aggregate attributable amounts of other comprehensive income (1077) (5583)

Aggregate attributable amounts of total comprehensive income (258893) (196680)

There is no associate and joint venture that is individually significant to the Group.154 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

21. Financial Assets at FVPL and FVOCI

(a) Financial assets at FVPL

As at December 31

20242023

RMB’000 RMB’000

Non-current:

– Industry fund investments 331815 499320

– Equity investment in unlisted entities at fair value 139261 84401

– Others 6340 6275

Total 477416 589996

Current:

– Structured deposits 11015904 6542881

– Fund investment and others 230252 266861

Total 11246156 6809742

(b) Financial assets at FVOCI

As at December 31

20242023

RMB’000 RMB’000

Non-current:

– Listed equity investments at fair value 1033218 2418842

– Unlisted equity investments at fair value 7198776 7070693

Total 8231994 9489535

Current:

– Notes held for sale 170913 99978

Total 170913 99978Annual Report 2024 S.F. Holding Co. Ltd. 155

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

155

22. Inventories

As at December 31

20242023

RMB’000 RMB’000

Raw materials 623005 472994

Finished goods 828075 1040816

Aviation consumables 631450 499062

Consumables and supplies 265661 365165

Cost of fulfilling contracts 86577 65170

24347682443207

Less: Provision for impairment loss (2385) (2782)

Total 2432383 2440425

23. Contract Assets

As at December 31

20242023

RMB’000 RMB’000

Contract assets 2745809 1636144

Less: Allowance for expected credit losses (4989) (3552)

Total 2740820 1632592

As discussed in Note 2.1(g) the Group applies simplified approach under IFRS 9 to measure the expected credit loss which uses a lifetime

expected loss allowance for contract assets.Allowance of approximately RMB1437000 had been provided for years ended December 31 2024 (2023: RMB152000).156 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

24. Trade and Note Receivables

As at December 31

20242023

RMB’000 RMB’000

Trade and note receivables

– related parties (Note 38(d)) 540956 124211

– third parties 28554708 26614887

2909566426739098

Less: Allowance for expected credit losses (1114031) (1378665)

Total 27981633 25360433

(a) The Group has various credit policies for different business operations depending on the requirements of the markets and businesses.The ageing analysis of the trade and note receivables based on invoice date is as follows:

As at December 31

20242023

RMB’000 RMB’000

Within 1 year (including 1 year) 28295989 25719098

Between 1 and 2 years (including 2 years) 335669 490411

Over 2 years 464006 529589

Total 29095664 26739098

There is no concentration of credit risk with respect to trade and note receivables as the Group has a large number of customers.(b) The Group applies the simplified approach to provide for expected credit losses prescribed by IFRS 9. Details are disclosed in Note

2.1(g).

As at December 31 2024 trade receivables of approximately RMB1114031000 (2023: RMB1378665000) were impaired and provided for.Annual Report 2024 S.F. Holding Co. Ltd. 157

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

157

24. Trade and Note Receivables (Continued)

Movements on the provision for impairment of trade and note receivables are as follows:

As at December 31

20242023

RMB’000 RMB’000

At the beginning of the year 1378665 1560244

Acquisition of subsidiaries 2302 (42078)

Allowance for/(reversal of) impairment losses 239853 (158277)

Written off as uncollectible (509273) –

Exchange adjustment and others 2484 18776

At the end of the year 1114031 1378665

(c) The provision and reversal of provision for impairment of receivables have been included in impairment losses on financial assets and

contract assets in the consolidated statement of profit or loss. Amounts charged to the allowance account are written off when there

is no expectation of recovery.(d) The carrying amount at the reporting date approximated the fair value of each class of receivables mentioned above.

25. Restricted Cash and Cash and Cash Equivalents

As at December 31

20242023

RMB’000 RMB’000

Restricted cash

Statutory reserve deposits with the PBOC for banking operations (Note (a)) 1240261 1476938

Pledged bank deposits 67314 52830

Others 46728 46728

Total 1354303 1576496

Cash and cash equivalents

Cash on hand and cash at banks (excluding PBOC) 32632563 40434748

Surplus reserve deposits with the PBOC 13492 13560

Demand deposits – –

Total 32646055 40448308

(a) On September 18 2016 the Group incorporated SF Holding Group Finance Co. Ltd. a licensed financial institution principally

engaging in the provision of cash management services internally.SF Holding Group Finance Co. Ltd. is required to deposit with the People’s Bank of China (the “PBOC”) an amount that equals to

5% of qualified RMB deposits from corporates. The statutory reserve deposits are restricted and not available for use in the daily

business. Deposits with the PBOC in excess of the statutory reserve deposits are surplus reserve deposits which are maintained

mainly for clearance purposes.158 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

26. Borrowings

As at December 31

20242023

RMB’000 RMB’000

Non-current:

Long-term bank borrowings (Note (a))

– secured (Note (a)(i)) 8300 2680031

– unsecured (Note (a)(ii)) 6178086 8675210

Corporate bonds (Note (c)) 19941935 18794782

Loans from Non-controlling interests 190939 246889

Total 26319260 30396912

Current portion of non-current:

Long-term bank borrowings (Note (a))

– secured (Note (a)(i)) 30902 742364

– unsecured (Note (a)(ii)) 1646813 2071021

Corporate bonds (Note (c)) 627779 615295

Loans from Non-controlling interests 21831 1541

Short term:

Short-term bank borrowings (Note (b))

– secured (Note (b)(i)) 117348 105969

– unsecured (Note (b)(ii)) 15001186 18659397

Short-term debentures (Note (c)) 807787 –

Loans from Non-controlling interests 111476 113516

Total 18365122 22309103Annual Report 2024 S.F. Holding Co. Ltd. 159

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

159

26. Borrowings (Continued)

Notes:

(a) Long-term bank borrowings

(i) The Group’s non-current bank borrowings amounting to approximately RMB2150466000 as at December 31 2023 had

been secured by Shun Yuan Financial Leasing (Tianjin) Co. Ltd.’s receivables. Shun Yuan Financial Leasing (Tianjin) Co.Ltd. a subsidiary of the Group recognized the receivables as engaging in aircraft financial lease business with SF Airlines

Company Limited.Certain non-current assets had been pledged as securities for long-term bank borrowings as at December 31 2024 and

2023. Refer to Note 14(a) Note 15(a) and Note 16(b).

(ii) The bank borrowings of approximately RMB5546498000 as at December 31 2024 (2023: RMB5633173000) had been

guaranteed by the subsidiaries within the Group.(iii) The range of interest rates of major non-current bank borrowings were 2.34% to 5.33% for the year ended December 31

2024 (2023: 2.20% to 6.91%).

(b) Short-term bank borrowings

(i) Certain non-current assets had been pledged as securities for short-term bank borrowings as at December 31 2024 and

2023. Refer to Note 14(a) Note 15(a) and Note 16(b).

(ii) Short-term bank borrowings of approximately RMB753673000 as at December 31 2024 (2023: RMB5156012000) had

been guaranteed by the Company or its subsidiaries.(iii) The range of interest rates of major short-term bank borrowings were 2.27% to 6.77% for the year ended December 31 2024

(2023: 2.20% to 7.47%).

(c) Corporate bonds and short-term debentures

(i) Bonds and debentures amounting to RMB18039077000 as at December 31 2024 (2023: RMB18393642000) had been

guaranteed by the Company.(ii) During the year ended December 31 2024 the Group repurchased part of its US dollar bonds with the total face value of

the repurchased bonds amounting to RMB 875011000. The difference between the consideration paid and the carrying

amount of the bonds payable which is RMB 87779000 was recognized as other gains (Note 7).(iii) The range of interest rates of bonds and debentures were 2.15% to 3.13% for the year ended December 31 2024 (2023:

2.38% to 3.79%).

27. Trade and Note Payables

As at December 31

20242023

RMB’000 RMB’000

Trade and note payables

– related parties (Note 38(d)) 332322 421194

– third parties 27063202 24493106

Total 27395524 24914300

An ageing analysis of the trade and note payables based on invoice date as at December 31 2024 and 2023 was as follows:

As at December 31

20242023

RMB’000 RMB’000

Within 1 year (including 1 year) 27128233 24505848

Over 1 year 267291 408452

Total 27395524 24914300160 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

28. Contract Liabilities

As at December 31

20242023

RMB’000 RMB’000

Contract liabilities

– related parties (Note 38(d)) 25085 48147

– third parties 2014113 1783871

Total 2039198 1832018

The following table shows the amounts of revenue recognized during the year relating to carried-forward contract liabilities:

Year ended December 31

20242023

RMB’000 RMB’000

Revenue recognized that was included in contract liabilities at the beginning of the year 1832018 1244418

29. Other Payables and Accruals

As at December 31

20242023

RMB’000 RMB’000

Non-current:

Salaries wages and benefits 58725 82216

Others 142312 58113

Total 201037 140329

Current:

Amounts due to related parties (Note 38(d)) 120487 136098

Salaries wages and benefits 6151172 5872341

Payable for purchase of property plant and equipment 3292799 4345119

Deposits 2566045 2355449

Other taxes payable 847166 735465

Payables of cash collected on delivery service 1423502 1534338

Consideration payable for business combinations 13213 289306

Others 2646947 2369055

Total 17061331 17637171Annual Report 2024 S.F. Holding Co. Ltd. 161

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

161

30. Deferred Income

As at December 31

20242023

RMB’000 RMB’000

Government grants and subsidies 1266359 1090644

The government grants were mainly incentives provided by local government authorities in the PRC including subsidies from a project in

Huanggang City government supporting funds for industry parks and aircraft engine maintenance subsidies etc. All of the government grants

and subsidies recognized as deferred income are asset related.

31. Share Capital and Treasury Shares

Number of

fully paid

ordinary shares Share capital Treasury shares Total

RMB’000 RMB’000 RMB’000

As at January 1 2024 4895202373 4895202 (2575532) 2319670

Issue of shares (Note (a)) 170275763 170276 – 170276

Repurchase of shares (Note (b)) – – (1758094) (1758094)

Cancellation of shares (Note (c)) (79291153) (79291) 3575545 3496254

As at December 31 2024 4986186983 4986187 (758081) 4228106

As at January 1 2023 4895202373 4895202 (2040377) 2854825

Repurchase of shares (Note (a)) – – (959956) (959956)

Exercise of share options – – 424801 424801

As at December 31 2023 4895202373 4895202 (2575532) 2319670

Notes:

(a) As stated in Note 1 each H share issued by the Company has a par value of RMB1.00 and was offered at HKD34.30 per share

raising total gross capital proceeds of HKD5831000000 equivalent to RMB5393966550. After deducting issuance expenses the

net proceeds amounted to RMB5246004499 of which RMB170000000 was credited to share capital and RMB5076004499 to

capital reserve.As of December 31 2024 the Company had a total of 4986186983 ordinary shares issued. The details of the Company’s equity

changes for the year ended December 31 2024 and 2023 are as follows:

As at December 31

20242023

A shares 4816186983 4895202373

H shares 170000000 –

Total 4986186983 4895202373162 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

31. Share Capital and Treasury Shares (Continued)

(b) For the years ended December 31 2024 and 2023 a total of 20771358 and19838884 A shares have been repurchased respectively

for future employee stock ownership plan or share-based incentive and treasury stocks amounting to approximately RMB1758094000

and RMB959956000 therefore were recognized respectively.(c) During the year ended December 31 2024 the Company under the approval and authorization of the general meeting cancelled a

total of 79291153 shares. Hence treasury stocks amounting to approximately RMB3575545000 and share capital of approximately

RMB79291000 were derecognized with a corresponding debit to capital reserve of approximately RMB3496254000 for the year

ended December 31 2024.

32. Reserves and Retained Earnings

(a) Reserves

Other General and

Capital comprehensive regulatory Special Statutory

reserve income reserve reserve reserve Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at January 1 2024 43164085 5532428 524376 – 2413786 51634675

Other comprehensive income – (1033976) – – – (1033976)

Transfer of gain on disposal of equity investments at fair

value through other comprehensive income to retained

earnings – 31036 – – – 31036

Transactions with owners

Net proceeds from Global Offering 5076004 – – – – 5076004

Net proceeds from share option exercising 11194 – – – – 11194

Capital injection from non-controlling interests 54 – – – – 54

Cancellation of shares (3496254) – – – – (3496254)

Share-based payment 89677 – – – – 89677

Transaction with non-controlling interests and others (3916204) – – – – (3916204)

Profit appropriations to statutory reserve – – – – 232352 232352

Safety reserve appropriation – – – 481331 – 481331

Safety reserve utilisation – – – (481331) – (481331)

Others (3624) – – – – (3624)

As at December 31 2024 40924932 4529488 524376 – 2646138 48624934Annual Report 2024 S.F. Holding Co. Ltd. 163

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

163

32. Reserves and Retained Earnings (Continued)

(a) Reserves (Continued)

Other General and

Capital comprehensive regulatory Special Statutory

reserve income reserve reserve reserve Total

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at January 1 2023 43996237 4538027 493048 – 1010253 50037565

Other comprehensive income – 873033 – – – 873033

Transfer of gain on disposal of equity investments at fair

value through other comprehensive income to retained

earnings – 121368 – – – 121368

Transactions with owners

Capital contribution of non-controlling interests 1207 – – – – 1207

Exercise of share options (69612) – – – – (69612)

Share-based payment 271510 – – – – 271510

Transaction with non-controlling interests and others (1037241) – – – – (1037241)

Appropriation to general and regulatory reserves – – 31328 – – 31328

Profit appropriations to statutory reserve – – – – 1403533 1403533

Safety reserve appropriation – – – 389332 – 389332

Safety reserve utilisation – – – (389332) – (389332)

Others 1984 – – – – 1984

As at December 31 2023 43164085 5532428 524376 – 2413786 51634675164 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

33. Share-Based Payment

(a) Share-based payment expenses during the year were as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Equity settled share-based payment 91446 309338

Cash settled share-based payment (10952) 233708

Total 80494 543046

(b) Equity settled share-based payment arrangement

(i) Share Option Plan of the Company

The share option plan established in May 2022 is designed to award the eligible participants who contribute to the success of the Group’s

operations and provide long-term incentives for employees to deliver long-term shareholder returns.Under the plan participants are granted options which only vest if certain performance standards are met and the employees officers and

directors shall remain in service. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in

the plan or to receive any guaranteed benefits.The stock options shall vest over a period of 4 years on the condition that the employees officers and directors remain in service and certain

performance standards are met. One-fourth of the awards shall be vested upon the end of the first the second the third and the fourth

anniversary dates of the grants.During the year ended December 31 2023 1328 participants of the plan met the performance requirements and a total of 8420193 share

options were exercised.During the year ended December 31 2024 1353 participants of the plan met the performance requirements and a total of 8168703 share

options were exercisable.A total of 27295395 share options granted through the 2022 Stock Option Incentive Plan were outstanding as of December 31 2024.Annual Report 2024 S.F. Holding Co. Ltd. 165

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

165

33. Share-Based Payment (Continued)

(b) Equity settled share-based payment arrangement (Continued)

(i) Share Option Plan of the Company (Continued)

The fair value per option was estimated at the grant dates using the following assumptions:

Exercise price per share RMB42.61 RMB42.43

Expiry date Respective annual due dates

Share price at grant date per share RMB51.57 RMB49.88

Expected volatility of the Company’s shares 35.77% ~ 40.39%

Expected dividend yield 0.51% ~ 0.55%

Risk-free interest rate 1.50% ~ 2.75%

The expected price volatility is based on the historic volatility (based on the remaining life of the options) adjusted for any expected changes

to future volatility due to publicly available information.The Group recognizes share-based payments in capital reserves and its consolidated statement of profit or loss based on options ultimately

expected to vest after considering estimated forfeitures of the share options. Forfeitures are estimated based on the historical experience

and revised in the subsequent periods if actual forfeitures differ from those estimates. The impact of the revision of the original estimates on

non-market vesting conditions if any is recognized in the profit and loss over the remaining vesting period with a corresponding adjustment

to capital reserves.Share-based payment expenses of RMB84316000 (2023: RMB216304000) related to the above share options were recognized in the

consolidated statement of profit or loss for the year ended December 31 2024.An accumulated amount of RMB545105000 (2023: RMB460789000) has been recognized as capital reserve as at December 31 2024.(ii) Share incentive Plan of the subsidiary entities

Subsidiaries of the Group issued restricted share units (‘RSU’) or share options of their own shares to senior executives and other employees.The fair value at grant date is independently determined by share price or using an adjusted form of the Discounted Cash Flow model or

Black Scholes Model.Share-based payment expenses of approximately RMB7130000 (2023: RMB93034000) related to the above share awards were recognized

in the consolidated statement of profit or loss for the year ended December 31 2024.An accumulated amount of RMB608199000 (2023: RMB601069000) as at December 31 2024 has been recognized as capital reserve.(c) Cash settled share-based payment arrangement

Subsidiaries of the Group issued RSU or share options of their own shares to senior executives and other employees with a term that the

subsidiaries had an obligation to repurchase under certain conditions as their remuneration package hereby the employees will become

entitled to a future cash payment.The management measured the liability initially and at the end of each reporting period until settled at the fair value of the RSU or share

options by applying an adjusted form of the Discounted Cash Flow model or Black Scholes Model.The management recognized the services received and a liability to pay for those services as the employees render service during the period.A total of share-based payment expenses of approximately RMB10952000 relation to the above arrangement for the year ended December

31 2024 were reversed to the consolidated statement of profit or loss(2023: RMB233708000 expenses were debited to the consolidated

statement of profit or loss).There were no share-based payments recognized as liabilities as at December 31 2024. An accumulated amount of approximately

RMB268453000 as at December 31 2023 has been recognized as liabilities.166 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

34. Notes to Consolidated Statement of Cash Flows

(a) Reconciliation of profit before income tax to net cash generated from operations:

Year ended December 31

20242023

RMB’000 RMB’000

Profit before income tax for the year 13607261 10486505

Adjustments for:

Depreciation of right-of-use assets (Note 8) 6798783 7213063

Depreciation and amortization (excluding right-of-use assets) (Note 8) 10533474 10106044

Impairment provision for investments in associates and joint ventures 187796 123907

Net impairment losses on financial assets and contract assets 271693 (33480)

Impairment of inventories property plant and equipment and other

non-current assets (Note 7) 141622 62390

Equity settled share-based compensation expenses (Note 33) 91446 309338

Losses on disposal of property plant and equipment right-of-use

assets and other non-current assets (Note 7) 60228 53891

Fair value changes in financial assets at FVPL (Note 7) (509717) (529513)

Gains on disposal of investments in subsidiaries (Note 36(b)) (80615) (268204)

Share of (profit)/loss of associates and joint ventures net 70020 67190

Gains on disposal of investments in associates and joint ventures (Note 7) (89622) (21441)

Dividend income (Note 6) (1005) (2438)

Amortization of deferred income (43241) (45935)

Finance costs (Note 10) 2373319 2269700

Operating cash flow before working capital changes 33411442 29791017

Changes in working capital:

Increase in inventories 8439 (491314)

(Increase)/decrease in trade receivables prepayment contract assets and other

receivable (247211) (262500)

Increase/(decrease) in trade payables contract liabilities and other payables 2191719 759002

Cash generated from operations 35364389 29796205Annual Report 2024 S.F. Holding Co. Ltd. 167

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

167

34. Notes to Consolidated Statement of Cash Flows (Continued)

(b) Transaction with non-controlling interests

During the year the Group changed its ownership interests in certain subsidiaries without change of its control.The impacts of the transactions with non-controlling interests for the years ended December 31 2024 and 2023 are summarized as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Net cash consideration paid to non-controlling interests without change of control 3451076 1833285

Recognized in the reserve within equity 3916204 1037241

(i) Major transaction during the year ended December 31 2024

During the year ended December 31 2024 the Group acquired the remaining equity interests of Shenzhen SF Freight Corporation and Shenzhen

Fengwang Holding Co. Ltd. Upon the completion of the transactions the aforementioned subsidiaries became wholly-owned subsidiaries of

the Group. The Group recognized a decrease in other reserve of RMB2146357000 and RMB744838000 respectively. The consideration

for above transactions were paid in 2024.Except for the aforementioned non-controlling interests’ transactions other transactions had insignificant impact on the Group’s consolidated

financial statements.(ii) Major transactions during the year ended December 31 2023

In July 2023 KLN acquired the remaining equity interests of K-Apex HK. Upon the completion of the acquisition K-Apex HK became a

wholly-owned subsidiary of KLN. The Group recognized a decrease in other reserve of RMB797838000.(c) Non-cash operating investing and financing activities

The main non-cash operating investing and financing activities for the years ended December 31 2024 and 2023 are summarized as follows:

Year ended December 31

20242023

RMB’000 RMB’000

Additions of right-of-use assets 6736287 6553794

Settlement of acquisitions of long-term assets through bank supply chain financing

or re-factoring 115198 543389

Total 6851485 7097183168 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

34. Notes to Consolidated Statement of Cash Flows (Continued)

(d) Reconciliation of liabilities arising from financing activities

Loans from

Corporate holders of

bonds and Loans from Leases asset-backed

Bank short-term non-controlling liabilities securities

borrowings debentures interest (Note (i)) scheme Total

At January 1 2024 32933992 19410077 361946 13808460 – 66514475

Cash flows (11671328) 937166 (2624) (7438385) – (18175171)

Interest expenses 1273506 636369 2326 503871 – 2416072

Other non-cash movements 446465 393889 (37402) 5721851 – 6524803

At December 31 2024 22982635 21377501 324246 12595797 – 57280179

At January 1 2023 21902738 27651090 314480 15179328 – 65047636

Cash flows 9202159 (9447697) 10098 (7765246) (899360) (8900046)

Acquisition and disposal of subsidiaries net 206227 – – (4810) 899360 1100777

Interest expenses 1071956 732349 4545 564374 – 2373224

Other non-cash movements 550912 474335 32823 5834814 – 6892884

At December 31 2023 32933992 19410077 361946 13808460 – 66514475

(i) The other non-cash movement about lease liabilities mainly resulted from the new lease contracts entered during the years ended

December 31 2024 and 2023.Annual Report 2024 S.F. Holding Co. Ltd. 169

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

169

35. Acquisition of Subsidiaries

The net cash flow impact of acquisition of subsidiaries for the year ended December 31 2024 and 2023 are as below:

Year ended December 31

20242023

RMB’000 RMB’000

Net cash paid in respect of the business combinations (Note (a)) 194007 972456

Net cash paid in respect of the acquisition of assets (Note (b)) 502647 1224952

Net cash paid in acquisition of subsidiaries 696654 2197408

(a) Acquisition of subsidiaries through business combinations

Analysis of the net cash outflow in respect of the acquisition of subsidiaries treated as business combinations for the year ended December

31 2024 and 2023 are as below:

Year ended December 31

20242023

RMB’000 RMB’000

Total acquisition consideration 173897 141702

Less: Cash and bank balances acquired (20212) (4545)

Outstanding and included in other payables (64506) –

Cash paid in the current year for acquisition of subsidiaries in prior years 104828 835299

Net cash paid in respect of the business combinations 194007 972456170 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

35. Acquisition of Subsidiaries (Continued)

(b) Acquisition of assets through acquisition of subsidiaries

Analysis of the net cash outflow in respect of the acquisition of subsidiaries treated as acquisition of assets for the year ended December 31

2024 and 2023 are as below:

Year ended December 31

20242023

RMB’000 RMB’000

Total acquisition consideration 559289 1269444

Less: Cash and bank balances acquired (56642) (44492)

Net cash paid in respect of the acquisition of assets 502647 1224952

(i) Major acquisition during the year ended December 31 2024

On January 18 2024 the Company acquired 100% equity interests of Beijing Jieyutai Enterprise Management Co. Ltd. (“Beijing Jieyutai”).The identifiable assets were mainly logistics industrial parks located in Beijing.The total consideration of the aforementioned equity interests was approximately RMB559289000. These property assets acquired were

initially recognized at their fair values of approximately RMB835700000.The transaction met the concentration test criteria and the set of property assets acquired was determined not to be a business.

36. Disposal of Subsidiaries

Transactions of disposal of subsidiaries for the year ended December 31 2024 and 2023 are analyzed as follows:

(a) Net cash received from disposal of subsidiaries

Year ended December 31

20242023

RMB’000 RMB’000

Cash consideration

Including: Hangzhou Zhentai Capital Management Ltd. 273345 –

Shenzhen Fengwang Information Technology Co. Ltd. – 460930

Other subsidiaries 21287 146798

Total disposal consideration 294632 607728Annual Report 2024 S.F. Holding Co. Ltd. 171

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

171

36. Disposal of Subsidiaries (Continued)

(a) Net cash received from disposal of subsidiaries (Continued)

Year ended December 31

20242023

RMB’000 RMB’000

Total Cash consideration 294632 607728

Add: Cash and cash equivalents received from disposal of subsidiaries in the prior year 190 –

Less: Cash and cash equivalents received from disposal of subsidiaries in the future year (29868) –

Less: Cash and cash equivalents held by the subsidiaries at the dates of disposal (2297) (208906)

Net cash flow impact from disposal of subsidiaries 262657 398822

(b) Gains on disposal of investments in subsidiaries

Year ended December 31

20242023

RMB’000 RMB’000

Total disposal consideration 294632 607728

Carrying amount of net assets sold (214017) (339524)

Gains on disposal of investments in subsidiaries 80615 268204172 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

37. Partly Owned Subsidiaries with Material Non-Controlling Interests

Set out below is summarized financial information for KLN and its subsidiaries since its acquisition by the Group which has non-controlling

interests that are material to the Group. The amounts disclosed for KLN and its subsidiaries are before inter-company eliminations.As at As at

December 31 2024 December 31 2023

RMB’000 RMB’000

Current assets 21013025 18187621

Non-current assets 24476527 25760002

Total assets 45489552 43947623

Current liabilities 14653958 13130867

Non-current liabilities 9650482 9017591

Total liabilities 24304440 22148458

Year ended Year ended

December 31 2024 December 31 2023

RMB’000 RMB’000

Revenue 54256276 45944780

Net profit 750674 227315

Attributable to owners of the Company 341968 209849

Net cash generated from operating activities 3310646 3043080

(i) Except for KLN and its subsidiaries no other subsidiaries had non-controlling interests that are material to the Group for the years

ended December 31 2024 and 2023.Annual Report 2024 S.F. Holding Co. Ltd. 173

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

173

38. Related Party Transactions

(a) Parent entities

Ownership interest

Name Type Place of incorporation 2024 2023

Mingde Holding Investment Shenzhen 53.39% 54.38%

The Company’s ultimate holding company is Mingde Holding and the ultimate controlling person is Mr. Wang Wei.(b) Names and relationships with related parties

Related parties are those parties that have the ability to control jointly control or exercise significant influence over the other party in holding

power over the investee; exposure or rights to variable returns from its involvement with the investee; and the ability to use its power over the

investee to affect the amount of the investor’s returns. Parties are also considered to be related if they are subject to common control or joint

control. Related parties maybe individuals or other entities.Save as disclosed elsewhere in this report the directors of the Company are of the view that the following parties/companies were significant

related parties that had transactions or balances with the Group for the years ended or as at December 31 2024 and 2023:

Name of related parties Relationship with the Group

Guangdong Fengxing Zhitu Technology Co. Ltd. and its Entities controlled by the ultimate controlling person of the Company

subsidiaries

Shenzhen Hive Box Technology Co. Ltd. and its subsidiaries Entities controlled by the ultimate controlling person of the Company

Shenzhen SF Hefeng Microfinance Co. Ltd. Entities controlled by the ultimate controlling person of the Company

Shenzhen Fengxiang Information Technology Co. Ltd. and its Entities controlled by the ultimate controlling person of the Company

subsidiaries

Hangzhou Fengtai E-Commerce Industrial Park Management Ltd. Entities controlled by the ultimate controlling person of the Company

Shunyuan Commercial Factoring (Tianjin) Co. Ltd. Entities controlled by the ultimate controlling person of the Company

Shenzhen Fengyi Technology Co. Ltd. Associates of controlling shareholder exited the associates of

controlling shareholder as of June 30 2024

Lianyungang Haichang Logistics Co. Ltd. Associates of the Group

SF Real Estate Investment Trust and its subsidiaries Associates of the Group

Shenzhen Shunjie Fengda and its subsidiaries Associates of the Group exited the associate company as of

August 9 2024

Shenzhen Zhongwang Finance and Tax Management Co. Ltd. Associates of the Group

Shenzhen Fenglian Technology Co. Ltd. Associates of the Group

Zhejiang Galaxis Technology Group Co. Ltd. and its subsidiaries Associates of the Group

State Grid E-Commerce Yunfeng Logistics Technology (Tianjin) Associates of the Group

Co. Ltd.Sichuan Wulianyida Technology Co. Ltd. and its subsidiaries Associates of the Group174 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

38. Related Party Transactions (Continued)

(b) Names and relationships with related parties (Continued)

Name of related parties Relationship with the Group

Shenzhen Yizhan Renewal Service Technology Co. Ltd. and its A joint venture of the Group

subsidiaries

Beijing Shunhe Tongxin Technology Co. Ltd. and its subsidiaries A joint venture of the Group

Beijing Wulian Shuntong Technology Co. Ltd. and its subsidiaries A joint venture of the Group

Fengsu Yitong (Suzhou) Technology Co. Ltd. and its subsidiaries A joint venture of the Group

Global Connect Holding Limited A joint venture of the Group

Shenzhen Shenghai Information Service Co. Ltd. A joint venture of the Group

Ezhou CCCC SF Airport Industrial Park Investment and A joint venture of the Group

Development Co. Ltd.CR-SF International Express Co. Ltd. A joint venture of the Group

(c) Transactions with related parties

The following significant transactions were carried out between the Group and its related parties for the year ended December 31 2024 and

2023. In the opinion of the directors of the Company the related party transactions were carried out in the normal course of business and at

terms negotiated between the Group and the respective related parties.Year ended December 31

20242023

RMB’000 RMB’000

Sales of goods and services:

Controlling shareholder 535 426

Entities controlled by the ultimate controlling person of the Company 1593016 127516

Associates of controlling shareholder 7162 14759

Joint ventures of the Group 50983 13937

Associates of the Group 88148 91576

Total 1739844 248214Annual Report 2024 S.F. Holding Co. Ltd. 175

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

175

38. Related Party Transactions (Continued)

(c) Transactions with related parties (Continued)

Year ended December 31

20242023

RMB’000 RMB’000

Purchases of goods and services:

Entities controlled by the ultimate controlling person of the Company 750259 972582

Associates of controlling shareholder 190 839

Joint ventures of the Group 1079710 1279481

Associates of the Group 895553 1661741

Total 2725712 3914643

Disposal of equity:

Entities controlled by the ultimate controlling person of the Company – 85188

Joint ventures of the Group – 12827

Associates of the Group – –

Total – 98015176 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

38. Related Party Transactions (Continued)

(c) Transactions with related parties (Continued)

Year ended December 31

20242023

RMB’000 RMB’000

Acquisition of assets through acquisition of subsidiaries:

Joint ventures of the Group (Note 35(b)) 559289 335443

Depreciation and interest expenses borne by the Group as the lessee:

Entities controlled by the ultimate controlling person of the Company 11393 12148

Joint ventures of the Group – 31672

Associates of the Group 226248 229975

Total 237641 273795

Additions of right-of-use assets:

Entities controlled by the ultimate controlling person of the Company 3639 53598

Joint ventures of the Group 2866 3876

Associates of the Group 3320 32734

Total 9825 90208

Other transactions:

Controlling shareholder 684 683

Entities controlled by the ultimate controlling person of the Company 4219 2416

Associates of controlling shareholder 1391 2861

Joint ventures of the Group 756 1857

Associates of the Group 14441 4869

Total 21491 12686Annual Report 2024 S.F. Holding Co. Ltd. 177

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

177

38. Related Party Transactions (Continued)

(d) Balances with related parties

As at December 31

20242023

RMB’000 RMB’000

Amounts due from related parties:

Controlling shareholder 365 224

Entities controlled by the ultimate controlling person of the Company 662119 595027

Associates of controlling shareholder – 3718

Joint ventures of the Group 5717 341214

Associates of the Group 188480 219037

Total 856681 1159220

Amounts due to related parties:

Controlling shareholder 320 128

Entities controlled by the ultimate controlling person of the Company 113289 138915

Associates of controlling shareholder – 4911

Joint ventures of the Group 193763 166439

Associates of the Group 170522 295046

Total 477894 605439

Lease Liabilities:

Entities controlled by the ultimate controlling person of the Company 86838 92060

Joint ventures of the Group – 98987

Associates of the Group 360194 598296

Total 447032 789343178 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

38. Related Party Transactions (Continued)

(e) Guarantee to related parties

(i) Guarantee provided

As at December 31 2024

Guaranteed entities: Guaranteed amount Guaranteed period Whether the guarantee has been fulfilled

RMB’000

Joint ventures of the Group 782000 September 29 2021 to April 29 2055 No

As at December 31 2023

Guaranteed entities: Guaranteed amount Guaranteed period Whether the guarantee has been fulfilled

RMB’000

Joint ventures of the Group 782000 September 29 2021 to April 29 2055 No

(ii) Contracted not yet provided

As at December 31

20242023

RMB’000 RMB’000

Joint ventures of the Group 2384180 2384180

(f) Key management compensation

Year ended December 31

20242023

RMB’000 RMB’000

Key management compensation 42188 48509Annual Report 2024 S.F. Holding Co. Ltd. 179

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

179

39. Commitments

(a) Capital Commitments

As at December 31

20242023

RMB’000 RMB’000

Contracted but not provided for purchase of property plant and equipment 1515674 1858672

Investment to be paid 121043 131895

Others – 944

Total 1636717 1991511180 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

40. Statement of Financial Position and Reserves Movement of the Company

(a) Financial position of the Company

As at December 31

20242023

RMB’000 RMB’000

ASSETS

Non-current assets

Property plant and equipment 335012 210661

Right-of-use assets 341498 354760

Intangible assets 17 168

Deferred tax assets 112 100

Prepayments other receivables and other assets 1755 –

Investments in subsidiaries 69994648 66933038

Total non-current assets 70673042 67498727

Current assets

Prepayments other receivables and other assets 13824762 21850383

Cash and cash equivalents 4077541 138046

Total current assets 17902303 21988429

Total assets 88575345 89487156

LIABILITIES

Current liabilities

Income tax payable 10911 3188

Other payables and accruals 90091 21623

Total current liabilities 101002 24811

Total liabilities 101002 24811

Net assets 88474343 89462345

EQUITY

Share capital 4986187 4895202

Less: Treasury shares (758081) (2575532)

Reserves 76058993 74151381

Retained earnings 8187244 12991294

Total equity 88474343 89462345

WANG Wei HO Chit

Chairman DirectorAnnual Report 2024 S.F. Holding Co. Ltd. 181

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

181

40. Statement of Financial Position and Reserves Movement of the Company

(Continued)

(b) Reserves movement of the Company

Reserves Retained earnings Total

RMB’000 RMB’000 RMB’000

As at January 1 2024 74151381 12991294 87142675

Comprehensive income:

Profit/(loss) for the year – 5031094 5031094

Transactions with owners

Net proceeds from Global Offering 5076004 – 5076004

Net proceeds from share option exercising 11194 – 11194

Cancellation of shares (3496254) – (3496254)

Share-based payment 84316 – 84316

Profit appropriations to statutory reserve 232352 (232352) –

Dividends – (9602792) (9602792)

As at December 31 2024 76058993 8187244 84246237

Reserves Retained earnings Total

RMB’000 RMB’000 RMB’000

As at January 1 2023 72601156 1573109 74174265

Comprehensive income:

Profit/(loss) for the year – 14035334 14035334

Transactions with owners

Share-based payment 216304 – 216304

Exercise of share options (69612) – (69612)

Profit appropriations to statutory reserve 1403533 (1403533) –

Dividends – (1213616) (1213616)

As at December 31 2023 74151381 12991294 87142675182 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

41. Subsequent Event

(a) The final dividend in respect of the year ended December 31 2024 of RMB44 cents per ordinary share (tax inclusive) was approved

by the Board on March 28 2025. The proposal is subject to the approval of the shareholders at the Annual General Meeting. The

dividend was not recognized as a liability as at December 31 2024.(b) Based on “the resolution of Proceeding the Application and Issuance Arrangement of Publicly Offered Infrastructure REITs” which

was approved in the 10th meeting of 6th session of the Board the Company proceeded the application and issuance work of the

publicly offered infrastructure REITs.On 24 February 2025 SZSE issued “a clearance letter in related to the listing of the closed-end investment fund of South SFWarehousing and logistic infrastructure (“closed-end investment fund”) and the listing and transferring of the asset-backed special

vehicle (“asset-backed special vehicle”) of phase 1 SF Warehousing and logistics infrastructure” (Shen Zheng Han [2025] No.178)

confirming its consent to the closed-end investment fund and asset-backed special vehicle’s compliance to the listing criteria aswell as the transferring criteria of the asset-backed special vehicle. On March 5 2025 CSRC granted the “approval in related to theregistration of the closed-end investment fund” (CSRC Approval [2025] No. 394) approved the registration of the publicly offered

infrastructure REITs.As of the approval date of the financial statements the issuance of the infrastructure REITs is not yet completed.

42. Group Structure – Principal Subsidiaries

As at December 31 2024 and 2023 the Company’s principal subsidiaries are as follows:

Percentage of equity interest

Issued ordinary/ As at December 31

Place of registered 2024

Incorporation share capital

Name and Operation Principal Activities (in thousand) Direct Indirect

Taisen Holding Mainland China Investment holding RMB5010000 100.00% –

S.F. Express Co. Ltd. Mainland China international freight forwarding domestic RMB150000 – 100.00%

and international express services

SF Technology Co. Ltd. Mainland China technical maintenance and RMB60000 – 100.00%

development services

Shenzhen Shunlu Logistics Co. Ltd. Mainland China cargo transportation freight forwarding RMB160000 – 100.00%

Anhui SF Communication Services Co. Ltd. Mainland China value-added telecommunications services RMB50000 – 100.00%

Shenzhen Yuhui Management Consulting Mainland China consulting services RMB250000 – 100.00%

Co. Ltd.Shenzhen SF Supply Chain Co. Ltd. Mainland China supply chain management services RMB1500000 – 100.00%

SF Airlines Company Limited Mainland China air cargo and mail transportation services RMB1510000 – 100.00%

Shenzhen Fengtai E-commerce Industrial Park Mainland China e-commerce park management RMB9530010 – 100.00%

Assets Management Co. Ltd.Shenzhen Fengtai Industrial Park Management Mainland China management consulting RMB58000 – 100.00%

Service Co. Ltd.Shenzhen SF Airport Investment Co. Ltd. Mainland China investment in industry RMB100000 – 100.00%

SF Holding (HK) Limited Hong Kong investment holding HKD8346998 – 100.00%

SF Holdings Group Finance Co. Ltd. Mainland China financing wealth management RMB2500000 – 100.00%

and consulting services

Shenzhen SF Chuangxing Investment Co. Ltd. Mainland China Investment in industry RMB330000 – 100.00%

Shenzhen Fengnong Technology Co. Ltd. Mainland China retail RMB145000 – 100.00%

Shenzhen Fenglang Supply Chain Co. Ltd. Mainland China supply chain management services RMB50000 – 100.00%

Shunyuan Financial Lease (Tianjin) Co. Ltd. Mainland China leasing business RMB1500000 – 100.00%Annual Report 2024 S.F. Holding Co. Ltd. 183

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

183

42. Group Structure – Principal Subsidiaries (Continued)

Percentage of equity interest

Issued ordinary/ As at December 31

Place of registered 2024

Incorporation share capital

Name and Operation Principal Activities (in thousand) Direct Indirect

SF Multimodal Transportation Co. Ltd. Mainland China cargo delivery services RMB242000 – 100.00%

SF Duolian Technology Co. Ltd. Mainland China technology development RMB150000 – 100.00%

Dongguan SF Taisen Logistics Management Mainland China property management RMB30010 – 100.00%

Co. Ltd.SF Innovation Technology Co. Ltd. Mainland China information technology services RMB450000 – 100.00%

Shenzhen Shunheng Rongfeng Supply Chain Mainland China consulting services RMB260000 – 100.00%

Technology Co. Ltd.Shenzhen Hengyi Logistics Supply Chain Mainland China freight forwarding services RMB100000 – 100.00%

Co. Ltd.Shenzhen Shuncheng Lefeng Commercial Mainland China factoring business. RMB92500 – 100.00%

Co. Ltd.Hangzhou SF INTRA-CITY Industrial Co. Ltd. Mainland China Supply chain management and RMB917376 – 57.86%

other services

SF Shared Precision Information Technology Mainland China information technology services RMB7000 – 100.00%

(Shenzhen) Co. Ltd.Hangzhou Shuangjie Supply Chain Co. Ltd. Mainland China supply chain management and other RMB50000 – 100.00%

services

Shenzhen Shunfeng Express Co. Ltd. Mainland China enterprise management and supply RMB1230000 – 100.00%

chain management

Huanggang Xiufeng Education Investment Mainland China business information consulting and RMB90000 – 100.00%

Co. Ltd. 　enterprise management consulting

Junhe Information Service Technology Mainland China information technology and RMB10000 – 100.00%

(Shenzhen) Co. Ltd. 　development services

SF Mathematical Technology (Shenzhen) Mainland China technology services and RMB250000 – 100.00%

Service Co. Ltd. 　consulting services

Shenzhen SF International Industrial Co. Ltd. Mainland China information technology services and RMB15010 – 100.00%

consulting services

Shenzhen Shunfeng Investment Co. Ltd. Mainland China investment holding RMB1100000 – 100.00%

SF Cold Chain Logistics Co. Ltd. Mainland China cargo transportation and freight forwarding RMB97660 – 100.00%

Zhejiang Shuangjie Supply Chain Technology Mainland China supply chain management and RMB192444 – 100.00%

Co. Ltd. 　other services

Shanghai Shun Ru Feng Lai Technology Co. Ltd. Mainland China information technology services RMB72873 – 100.00%

KLN Hong Kong provision of logistics and freight HKD903715 – 51.52%

forwarding services184 S.F. Holding Co. Ltd. Annual Report 2024

Notes to the Consolidated Financial Statements

For the year ended December 31 2024

42. Group Structure – Principal Subsidiaries (Continued)

Notes:

(i) The Company’s investment in a subsidiary is as follow:

As at December 31

20242023

RMB’000 RMB’000

Taisen Holding 69994648 66933038

(ii) The English names of the subsidiaries represent the best efforts made by the management of the Group in translating their Chinese names as they

do not have official English names.(iii) The above list included subsidiaries having material impact on the annual results or net assets of the Group.Annual Report 2024 S.F. Holding Co. Ltd. 185

Definitions

185

“active consumer(s)” the number of unique consumer accounts that purchase a particular service at least once during

the prescribed period

“active merchants” the number of unique merchant accounts that purchase a particular service at least once during the

prescribed period“Announcement No. 1 [2023] Announcement of the Ministry of Finance and the State Taxation Administration on the Clarification of　of the Ministry of Finance and Value-Added Tax Reduction and Exemption for Small-Scale Value-Added Tax Taxpayers and Other　the State Taxation Administration” Policies (Announcement No. 1 [2023] of the Ministry of Finance and the State Taxation Administration)

“A Share(s)” ordinary shares issued by our Company with a nominal value of RMB1.00 each which are listed on

the Shenzhen Stock Exchange and traded in RMB

“AEO” Authorized Economic Operator qualified enterprises certified by the World Customs Organization

and provided with facilitation and preferential policies for customs clearance

“AFRC” Accounting and Financial Reporting Council of Hong Kong

“AGV” automated guided vehicle a transport vehicle with handling function that can travel automatically

along a prescribed path

“Articles of Association” the articles of association of our Company adopted on August 17 2023 with effect upon Listing (as

amended from time to time)

“associate(s)” has the meaning ascribed thereto under the Listing Rules of SEHK

“Audit Committee” the audit committee of the Board

“Board” or “Board of Directors” the board of Directors of the Company

“Board of Supervisors” the board of Supervisors of the Company

“B2B” business to business

“B2C” business to customer

“Business Day” a day on which banks in Hong Kong are generally open for normal business to the public and which

is not a Saturday Sunday or public holiday in Hong Kong

“China” or “the PRC” the People’s Republic of China except where the content or context requires otherwise“China Federation of China Federation of Logistics & Purchasing　Logistics & Purchasing”

“CG Code” the Corporate Governance Code as set out in the Appendix C1 to the Listing Rules of SEHK“Cold Chain Logistics Committee of Cold Chain Logistics Committee of China Federation of Logistics & Purchasing　China Federation of Logistics &　Purchasing”

“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) as amended supplemented or

otherwise modified from time to time

“Company” or “SF” S.F. Holding Co. Ltd. (順豐控股股份有限公司) formerly registered under the name Maanshan Dingtai

Rare Earth & New Materials Co. Ltd.* (馬鞍山鼎泰稀土新材料股份有限公司) a joint stock company

with limited liability established in the PRC on May 22 2003 the A Shares of which have been listed

on the Shenzhen Stock Exchange (stock code: 002352.SZ) and the H Shares of which have been

listed on the Hong Kong Stock Exchange (stock code: 6936.HK)

“connected person(s)” has the meaning ascribed thereto under the Listing Rules of SEHK

“connected transaction(s)” has the meaning ascribed thereto under the Listing Rules of SEHK

“Controlling Shareholder(s)” has the meaning ascribed thereto under the Listing Rules of SEHK

“CSRC” China Securities Regulatory Commission186 S.F. Holding Co. Ltd. Annual Report 2024

Definitions“customers with active customers that have a credit account with us and transacted with us within the most recent six-month　credit accounts” period among which substantially all are business accounts

“Director(s)” the director(s) of our Company

“dividend payout ratio” calculated as our dividends paid in respect of a year/reporting period divided by the profit attributable

to owners of our Company for the same period expressed as a percentage

“express logistics” includes the Company’s time-definite express economy express freight delivery cold chain and

pharmaceuticals logistics and intra-city on-demand delivery business

“Ezhou cargo hub” the air cargo hub located in Ezhou Hubei Province which mainly comprises of Ezhou Huahu

International Airport and our logistics complex

“Fenghao Supply Chain” the business entities acquired by the Company from DHL that engage in supply chain business in

mainland China Hong Kong and Macau

“Fengyi Technology” Fengyi Technology (Shenzhen) Co. Ltd. (豐翼科技(深圳)有限公司) an indirect non-wholly owned

subsidiary of the Company

“Fengwang” or “Fengwang Express” Shenzhen Fengwang Express Co. Ltd. (深圳豐網速運有限公司) which mainly engages in the

economy express service under the franchise model. In June 2023 the Company completed the

disposal of its Fengwang Express business by selling all the equity in its parent company

“Frost & Sullivan” Frost & Sullivan (Beijing) Inc. Shanghai Branch Co.“F&S Report” the industry report prepared by Frost & Sullivan which the Company commissioned Frost & Sullivan

to prepare on the global logistics market

“GDP” gross domestic product

“Group” our Company and its subsidiaries

“H Share(s)” overseas listed foreign ordinary share(s) in the share capital of our Company with a nominal value of

RMB1.00 each which are listed on the Hong Kong Stock Exchange and traded in HKD

“H Share Registrar” Tricor Investor Services Limited

“H Shares Listing Date” November 27 2024

“HKFRS(s)” Hong Kong Financial Reporting Standards amendments and interpretations issued by the Hong

Kong Institute of Certified Public Accountants

“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the PRC

“Hong Kong dollars” or “HKD” Hong Kong dollars and cents respectively the lawful currency of Hong Kong

“Hong Kong Stock Exchange” or The Stock Exchange of Hong Kong Limited a wholly owned subsidiary of Hong Kong Exchanges

“SEHK” and Clearing Limited

“IASB” International Accounting Standards Board

“IFRS” the IFRS Accounting Standards which as collective term includes all applicable individual International

Financial Reporting Standards International Accounting Standards and Interpretations issued by

the IASB

“IVD” abbreviation for in vitro diagnostics products and services for obtaining clinical diagnostic information

through testing on human samples

“KA” the type of customers that are defined as key accounts in the Company’s customer management

system

“KEX” KEX Express (Thailand) Public Company Limited a company listed on the Stock Exchange of Thailand

(stock code: KEX.BK) and a holding subsidiary of the Company

“KLN” Kerry Logistics Network Limited (in the process of changing its name to KLN Logistics Group Limited)

a company listed on the Main Board of the Hong Kong Stock Exchange (stock code: 0636.HK) and

a holding subsidiary of the CompanyAnnual Report 2024 S.F. Holding Co. Ltd. 187

Definitions

187

“Listing Rules of SEHK” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (as

amended supplemented or otherwise modified from time to time)“logistics and freight forwarding includes the Company’s time-definite express economy express freight delivery cold chain and　services” pharmaceuticals logistics intra-city on-demand delivery and supply chain and international business

“lower-tier markets” generally refers to the market in third- or lower-tier cities counties towns and rural areas or the

market where customers place greater emphasis on cost-effectiveness

“LTL” less-than-truckload the transportation of goods that do not require a full truckload

“Mingde Holding” Shenzhen Mingde Holding Development Co. Ltd.* (深圳明德控股發展有限公司) a limited liability

company established under the laws of the PRC on November 5 1997 one of our Controlling

Shareholders

“Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix C3

to the Listing Rules of SEHK

“NAFR” National Administration of Financial Regulation of the PRC (中華人民共和國國家金融監督管理總局)

(which was established on the basis of the China Banking and Insurance Regulatory Commission

(中國銀行保險監督管理委員會))

“Nomination Committee” the nomination committee of the Board

“O2O” online to offline a business model or marketing strategy that guides consumers to a brick-and-mortar

store (offline) for consumption or experience through the Internet (online)

“PRC Company Law” the Company Law of the People’s Republic of China (中華人民共和國公司法)

“PRC GAAP” Generally accepted accounting principles of the PRC

“Prospectus” the prospectus of the Company dated November 19 2024

“PTL” Partial Truckload the transportation of goods that are relatively large in volume but still not sufficient

for a full truckload requiring consolidated shipping

“RCEP” Regional Comprehensive Economic Partnership

“Relevant Period” from the H Shares Listing Date to December 31 2024

“Reporting Period” from January 1 2024 to December 31 2024

“reverse logistics” logistics services that manage the movement of goods from consumers back to manufacturers or

sellers generally for purposes including returns recycling or repairs

“Risk Management Committee” the risk management committee of the Board

“RPA” Robotic Process Automation“Remuneration and the remuneration and appraisal committee of the Board　Appraisal Committee”

“RMB” Renminbi the lawful currency of the PRC

“R&D” research and development

“SaaS” abbreviation for Software as a Service a business delivery model in which software is licensed on a

subscription basis and is centrally hosted

“Securities and Futures Commission” the Securities and Futures Commission of Hong Kong

or “SFC”

“standardized portfolio service” standardized integrated logistics service solution created by combining a wide range of products and

technological capabilities to meet the needs of customers in specific scenarios

“SF Express” S.F. Express Co. Ltd.* (順豐速運有限公司) an indirect wholly-owned subsidiary of the Company188 S.F. Holding Co. Ltd. Annual Report 2024

Definitions

“SF Express (Group)” SF Express (Group) Limited* (順豐速運(集團)有限公司) the predecessor of Mingde Holding

“SF Holding (Group)” SF Holding (Group) Co. Limited* (順豐控股(集團)股份有限公司) the predecessor of SF Taisen

“SF Holding (HK)” SF Holding (HK) Limited (順豐控股(香港)有限公司) an indirect wholly-owned subsidiary of the

Company formerly known as SF Holding Limited (順豐控股有限公司)

“SF Intra-city” or “Intra-city Industrial” Hangzhou SF Intra-city Industrial Co. Ltd. (杭州順豐同城實業股份有限公司) a company listed on

the Main Board of the Stock Exchange (9699.HK) an indirect non-wholly owned subsidiary of the

Company

“SF REIT” SF Real Estate Investment Trust listed on the Main Board of the Stock Exchange (2191.HK) is an

associate of the Company

“SF Taisen” Shenzhen S.F. Taisen Holding (Group) Co. Ltd.* (深圳順豐泰森控股(集團)有限公司) previously known

as SF Holding (Group) Co. Limited* (順豐控股(集團)股份有限公司) a direct wholly-owned subsidiary

of the Company

“SF Technology” SF Technology Co. Ltd.* (順豐科技有限公司) an indirect wholly-owned subsidiary of the Company

“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended

supplemented or otherwise modified from time to time

“SKA” the type of customers that are defined as strategic key accounts in the Company’s customer

management system

“Share(s)” ordinary share(s) in the capital of our Company with a nominal value of RMB1.00 each including

both A Shares and H Shares

“Shareholder(s)” holder(s) of the Share(s)

“Shenzhen Stock Exchange” Shenzhen Stock Exchange

“Shenzhen Weishun” Shenzhen Weishun Enterprise Management Co. Ltd.*(深圳市瑋順企業管理有限公司) a limited

liability company established under the laws of the PRC on January 31 2023 one of our Controlling

Shareholders and owned as to 100% by Mingde Holding as of the Latest Practicable Date

“SME” the type of customers that are defined as small and medium enterprise customers in the Company’s

customer management system

“Strategy Committee” the strategy committee of the Board

“subsidiary(ies)” has the meaning ascribed thereto under the Listing Rules of SEHK

“substantial shareholder(s)” has the meaning ascribed thereto under the Listing Rules of SEHK

“Supervisor(s)” member(s) of the Board of Supervisors“Supply chain and includes the Company’s international express international cargo and freight forwarding business　international business” and supply chain business

“SXH China Logistics” the business entities acquired by the Company from HAVI China Holding LLC that engage in cold

chain business in mainland China Hong Kong and Macau

“TEU” twenty-foot equivalent unit a standard unit of measurement of the volume of a container with a length

of 20 feet height of eight feet six inches and width of eight feet“the e-commerce-driven distribution the process of various agricultural products produced in rural areas being delivered from the fields to　of agricultural products” urban consumers through modern information technologies such as the Internet and e-commerce

platforms and other channels

“US dollar(s)” or “USD” United States dollars the lawful currency of the United States

“2022 Stock Option Incentive Plan” the stock option incentive plan approved and adopted by the Company on April 28 2022 selected

participants including Directors and members of senior management team key management

members and key staff

“3C electronics” computer communication and consumer electronics

“%” per cent