SF Intra-city speeds to record profit as AI, autonomous vehicles join its delivery fleet

China’s largest third-party on-demand delivery service provider’s first-half profit more than doubled as it expanded its autonomous vehicle delivery network to 124 cities

By Teri Yu

Hangzhou SF Intra-city Industrial Co. Ltd. (9699.HK) last Friday reported its strongest half-year performance since its 2021 listing, as its profit more than doubled to 349.3 million yuan ($49 million) from 137 million yuan a year earlier on deepening ties with merchants and growing use of AI and driverless vehicles to keep costs in check.

Revenue for China’s largest third-party on-demand delivery service provider climbed 14.7% year-on-year to 11.74 billion yuan in the first half of 2026, according to its latest financial report. Its gross profit rose by a faster 20.9% to 823.2 million yuan, lifting its gross margin to 7% from 6.7% a year earlier. On an adjusted basis, which strips out share-based compensation and other non-operational items, its net profit grew 70.8% to 265.8 million yuan.

Founded in 2016 and spun off from logistics giant S.F. Holding (6936.HK; 002352.SZ), SF Intra-city has built a reputation as a “neutral” third-party delivery partner, fulfilling orders for merchants, consumers and other platforms alike rather than providing delivery services for its own retail businesses. That positioning has become an increasingly valuable selling point as merchants look to diversify beyond dominant super-apps like Meituan and Alibaba’s Taobao Flash.

The company said order volume from its core intra-city delivery business grew more than 30% in the first half year-on-year, pushing the segment’s revenue up 24.4% to 7.19 billion yuan. Within that, revenue from merchant-facing delivery jumped 28.1% to 5.72 billion yuan. Food and beverages, supermarket and grocery orders logged some of the strongest revenue growth. Consumer-facing delivery revenue grew by a slower 11.8% to 1.47 billion yuan, while the company’s smaller last-mile delivery unit rose 2.1% to 4.55 billion yuan.

SF Intra-city’s merchant base swelled 44% over the 12 months through June to 1.23 million active accounts, while its consumer base topped 27 million. Its monthly active riders grew 20% in the first half, with the number of “middle-to-high-income” riders up 17%.

The company said it also maintained a leading market share among top customers, supported by a nationwide fulfillment network, as it added more than 4,300 new partner stores during the period. Orders for its premium one-on-one “exclusive delivery” service doubled, evidence it cited as showing that its push into higher-margin, higher-touch services is gaining traction.

Much of the profit improvement, the company said, came from economies of scale and the growing use of AI tools to coordinate everything from customer acquisition to rider dispatch. It also pointed to progress on autonomous delivery, saying its unmanned vehicle fleet now operates in 124 cities nationwide, logging more than 60,000 trips with over 1,000 vehicles on the road. The company described the technology as a supplement to its human-powered rider network rather than a replacement, though the rapid rollout suggests it sees driverless delivery as an increasingly important future profit driver.

The company’s latest first-half profit already exceeds its entire 2025 net profit of 277.7 million yuan, a record at the time, underscoring how quickly profitability has scaled as SF Intra-city moves past the cutthroat subsidy wars that once defined China’s on-demand delivery sector. The company had cash and short-term investments of nearly 2.5 billion yuan on hand at the end of June, which it can use to keep investing in its network and technology.

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