Company profile

SY Holdings is the first "AI + industrial supply chain" digital intelligence technology company listed on the Hong Kong Main Board. While deeply rooted in national pillar industries such as infrastructure engineering, healthcare, and bulk commodities, the company is actively expanding into strategic emerging sectors like e-commerce, robotics, and intelligent computing services. Adopting a differentiated "transaction-focused, asset-light" model, SY Holdings strengthens industrial ecosystems and data connectivity through its platform-based technology services, enabling SMEs to access working capital, reduce costs, and improve efficiency. The company provides comprehensive sales and supply chain management solutions, including order and marketing management, intelligent goods receipt verification, digital inventory systems, and payment cycle optimization. As of December 31, 2024, SY Holdings has established strategic partnerships with over 10 major core enterprises and collaborated with more than 160 financial institutions. With over a decade of sustained investment in technology and talent development, the company has facilitated over 18,100 SMEs in securing cumulative orders and financing services exceeding RMB 249 billion.

Financial performance

In 2024, the company reported total operating income and revenue of approximately RMB 919 million, a 4.6% year-on-year decrease, primarily due to the impact of one-off transactions, partially offset by growth in its platform-based technology services. Net profit rose 36.9% to RMB 391 million, with the net profit margin increasing from 30.0% in 2023 to 42.5% in 2024. By segment, platform technology services revenue surged 103.6% to RMB 347 million, driven by strengthened ecosystem integration and rapid expansion of off-balance-sheet operations. However, digital financial solutions revenue fell 27.8% to RMB 522 million from RMB 723 million in 2023, as SMEs increasingly met their supply chain financing needs through external funding partners linked via the platform. Supply chain asset refinancing generated recognized revenue of RMB 50.9 million as of year-end 2024, down 27.8% from RMB 70.5 million in 2023. Committed to shareholder returns, the company proposed a 2024 dividend of RMB 0.35 per share, representing a 90.0% payout ratio, and announced a special dividend for 2025, with total dividends for the year expected to exceed RMB 940 million.

Performance summary

Market Expansion and Strong Policy Support

In recent years, the number of SMEs in China has grown rapidly, exceeding 52 million by the end of 2022, a 51.0% increase from 2018. In 2023, China's supply chain finance industry reached approximately RMB 41 trillion, marking an 11.9% year-on-year growth and a five-year CAGR of 20.9%, reflecting robust expansion. According to CIC Consulting, driven by sustained growth momentum and increasing corporate demand to optimize working capital and secure financing through supply chain assets, China's supply chain finance market is projected to grow to RMB 52 trillion by 2027, with a CAGR of 9.8% from 2022 to 2027. Currently, the company's three core sectors—infrastructure engineering, bulk commodities, and healthcare—represent a potential market exceeding RMB 4 trillion and over 1.5 million suppliers. Leveraging its leading supply chain technology platform, the company is well-positioned to further enhance market penetration.

As a Key Institutional Mechanism to Alleviate SME Financing Challenges, China has established a multi-tiered, extensive, and differentiated inclusive financial service system, a critical institutional arrangement to address the funding difficulties of small and micro enterprises. The development of this system began with continuous improvements in top-level design: the 2013 Third Plenary Session of the 18th CPC Central Committee integrated inclusive finance into the comprehensive deepening of reforms, while the 2015 State Council introduced the nation's first Five-Year Plan for Inclusive Financial Development (2016–2020), marking a new phase of strategic advancement. At the regulatory level, the former China Banking and Insurance Regulatory Commission (CBIRC) and the People's Bank of China (PBOC) have driven institutional innovations over the past decade, including specialized incentive mechanisms and differentiated regulatory frameworks, effectively channeling financial resources toward inclusive sectors. Latest regulatory data reveal that as of the end of September 2024, outstanding inclusive loans to small and micro enterprises reached RMB 33 trillion, reflecting a robust 14.7% year-on-year increase and underscoring the policy's tangible impact.

Sustained Focus on Core Business and Platform-Driven Transformation to Unlock New Growth

Anchored in national strategic priorities, the company continues to strengthen its dual-engine development model of "industry specialization + technology empowerment." While consolidating its leadership in core sectors such as infrastructure engineering, healthcare, and bulk commodities—key pillars of the real economy—it is proactively expanding into strategic emerging industries like cross-border e-commerce, smart equipment, and intelligent computing services, which collectively represent a potential market exceeding RMB 10 trillion and a client base of over 10 million enterprises.

Cross-Border Trade Innovation:

The company has built a digital supply chain network connecting China and Southeast Asia. By partnering with leading regional e-commerce platforms, it has pioneered an integrated "cross-border supply chain + industrial finance" model, offering solutions spanning working capital, logistics fulfillment, and digital marketing for cross-border e-commerce businesses. To date, the company has enabled hundreds of e-commerce firms to secure financing, driving significant GMV growth for partnered merchants. Additionally, through a strategic investment in Sinbad Technology, it is advancing the global expansion of the apparel industry: establishing smart production bases in Turkey and Southeast Asia to create agile, flexible supply chains, while integrating deeply with cross-border platforms like SHEIN and Temu to empower China's apparel manufacturing clusters in their digitally-driven global expansion.

Intelligent Computing and Robotics:

In intelligent computing and robotics, the company supports AI enterprises with flexible, high-efficiency computing services, providing access to industrial ecosystem resources, computing credit management, and GPU procurement financing. A strategic collaboration with Digital Whale aims to leverage supply chain finance to accelerate mass production and sales scaling, forming a full-cycle value chain that integrates industrial investment with ecosystem empowerment, thereby unlocking sustained synergistic value.

Leading R&D Capabilities Drive Comprehensive AI Application Deployment

As of December 31, 2024, the company has cumulatively invested over RMB 250 million in R&D, driving the contribution of technology services revenue to total income from 17.7% to 37.7% year-on-year, solidifying its position as a major growth driver. The company holds 80 national invention patents and software copyrights spanning innovations in big data, cloud computing, artificial intelligence (AI), and computing power.

Leveraging extensive industry-specific data accumulated over a decade, it is accelerating the application of large-scale AI models, including the development of enterprise AI knowledge bases, optimization of intelligent asset-fund matching algorithms, and enhancement of risk control models. Management anticipates over 50% operational efficiency improvement by 2025, alongside a significant increase in per-employee asset servicing capacity. Furthermore, by integrating industrial AI agents—developed through its deep industry data and client network—into digital ecosystems, the company empowers SMEs with intelligent market analysis, order acquisition, supply chain management, and cost control solutions. These advancements aim to further elevate platform-driven technology service revenue and accelerate the group's evolution into an industrial intelligent ecosystem.

Company valuation

The company continues to enhance its industrial internet infrastructure, deepening the integration of technological capabilities and data elements to build smart supply chain solutions centered on transaction scenarios. By establishing a transaction-based credit assessment mechanism and a digital risk control platform, it has pioneered an inclusive financial service model characterized by “transaction data-driven operations and reduced reliance on entity creditworthiness,” effectively addressing SMEs` financing challenges. This system, powered by an intelligent industry-finance collaboration platform, ensures fund security while significantly improving supply chain operational efficiency, enabling real-economy enterprises to optimize costs and enhance productivity.

In 2025, the company will further accelerate its platform-driven transformation to unlock profit growth potential. We forecast 2025–2027 operating revenues of RMB 1,128/1,258 /1,299 million, with platform services expected to contribute 50.0% of total income. Net profit is projected at RMB 566 million/656 million/684 million, translating to EPS of RMB 0.59/0.68/0.71, with a current P/E ratio of 20x/18x/17x for 2025–2027. Given the company's successful platformization strategy, we assign a 28x 2025 forward P/E, deriving a target price of HK$17.50 per share, and maintain a “Buy” rating.

Exchange rate: RMB/HKD = 1.06

Risk factors

1) Slower-than-expected growth in financing demand; 2) Macroeconomic volatility; 3) Underperformance of new business initiatives.

Financials

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