(Yicai Global) Oct. 29 -- SF Holding reported a 43.5 percent drop in third-quarter profit compared with a year ago after the Chinese courier, better known as SF Express, boosted investment in capacity and equipment and the government ended last year’s subsidies for the logistics sector.

Net profit was CNY1.04 billion (USD162.8 million) in the three months ended Sept. 30, the Shenzhen-based firm said in an earnings report released yesterday. Revenue rose 23.5 percent to CNY47.5 billion (USD7.4 billion).

SF has spent more on transit sites and automation as well as trunk and branch line capacity since the fourth quarter of last year to increase handling and network capacity, and to provide long-term support for the rapid development of various businesses. China has also lifted a series of tax reduction and exemption policies brought in last year to ease the impact of the coronavirus pandemic.

But despite the third-quarter decline, SF’s earnings are improving. In the first quarter, the company reported a CNY989 million (USD154.8 million) net loss. It returned to profit in the second quarter, logging a CNY659 million gain, and the figure grew 58 percent in the third quarter from the previous one.

SF Holding’s share price [SHE:002352] added 2.4 percent today to finish at CNY64.63 (USD10.10). The wider Shenzhen market rose 1.5 percent.

In the first nine months of the year, SF’s revenue was CNY135.9 billion (USD21.3 billion), up 24 percent from a year ago. Net profit jumped 68 percent to CNY1.8 billion.

Operating costs in the first three quarters reached CNY120.5 billion, up 34 percent, mainly due to business growth and increased investment in capacity building and business expansion.

In the same period, the firm’s express logistics business handled 7.7 billion shipments, a 36.4 percent increase from a year ago. Shipments in the first three quarters of last year had jumped 75 percent from 2019.

Editor: Futura Costaglione