SF Holding Co Ltd Class A

002352: XSHE (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	CNY 52.00	Qxgmx	Ywrqpdp

SF Holding: Trimming Fair Value Estimate by 6% Due to Higher Labor Costs

Chelsey Tam

Apr 2, 2024

We have trimmed our fair value estimate of wide-moat SF Holding, or SF, by 6% to CNY 51 per share, mainly due to increased labor cost assumptions in the next decade. Despite this, we think the shares remain cheap, and earnings will be underpinned by growing economies of scale. While we reduce our 2032 gross margin forecast to 13.7% from 15.2%, this is still an improvement from 12.8% in 2023. We expect gross margin to increase to 13.8% by 2033.

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