FUZHOU, China - Shengfeng Development Limited (NASDAQ: SFWL), a prominent logistics firm, announced Monday the renewal of its contract with electric vehicle giant BYD Co (SZ:002594). Ltd. The deal continues the partnership that began in January 2023, under which Shengfeng provides crucial transportation services for BYD's auto parts and components.
The renewal signifies the successful collaboration between Shengfeng and BYD, which has become a significant growth factor for Shengfeng's new energy sector. BYD's contributions to Shengfeng's revenue were notable, with over 25.7 million RMB (approximately $3.6 million USD) recorded in fiscal year 2023, and 24.5 million RMB (approximately $3.4 million USD) in the first half of fiscal year 2024 alone.
Shengfeng's new energy sector experienced a 47% revenue increase year-over-year in fiscal year 2023, and in the first half of fiscal year 2024, it generated around 286.9 million RMB (about $40.2 million USD), surpassing the total revenue of the previous year. This sector now accounts for 17% of Shengfeng's total revenue, indicating the company's strategic emphasis on the burgeoning energy transition market.
Mr. Yongxu Liu, CEO of Shengfeng, stated, "We are excited to continue our work with BYD, which we believe is one of the most innovative and influential companies in the new energy industry." He added that the contract renewal underscores Shengfeng's ability to provide scalable logistics solutions for prominent clients.
Shengfeng Development Limited, established in 2001, has built a reliable transportation network across China, covering 341 cities in 31 provinces as of June 30, 2024. The company offers a suite of integrated logistics solutions, including B2B freight transportation, cloud storage services, and value-added services, aiming to enhance efficiency and management systems for Chinese companies.
The information in this article is based on a press release statement from Shengfeng Development Limited. The company has cautioned that forward-looking statements within the release are subject to risks and uncertainties and that actual results may differ from those projected.
InvestingPro Insights
As Shengfeng Development Limited (NASDAQ: SFWL) continues to solidify its partnership with BYD Co. Ltd., investors are closely monitoring the company's financial health and stock performance. According to InvestingPro data, Shengfeng has a market capitalization of $108.07 million and a trailing twelve-month revenue of $446.28 million as of Q2 2024, reflecting a robust revenue growth of 14.8%. This growth is particularly noteworthy as it aligns with the company's strategic emphasis on the new energy sector, which has seen a significant revenue increase.
Despite the positive revenue growth, Shengfeng is trading at a relatively low earnings multiple, with a P/E ratio of 11.79, which suggests that the stock may be undervalued relative to its earnings. This is further supported by the company's price/book ratio of 0.96, indicating that the stock is trading close to its book value. An InvestingPro Tip mentions that Shengfeng is also trading at a low revenue valuation multiple, which could present an opportunity for investors seeking value stocks with potential upside.
The company's recent performance shows a strong return over the last three months, with a 22.43% price total return, reflecting investor confidence in the face of the contract renewal with BYD. However, it's important to note that the stock has experienced a significant price drop over the last year, with a 1-year price total return of -89.56%. This could be a point of concern for potential investors, but also a possible entry point for those looking for a recovery play.
For those interested in a more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/SFWL, providing further insights into Shengfeng's financial performance and stock valuation.
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