Our TP of HK$22 is set at 0.7x 2026E PS, the average of 1) CN logistics peers with a similar margin profile; and 2) CN local services peers (internet players). We adopt a PS methodology to reflect the company's user base/order volume expansion and short history of profitability, and it is in line with the approach we use for close comps.

Key downside risks that could impede the SF Intra-City stock from reaching our TP include: 1) soft macro and local consumption; 2) intensified competition impacting service fees per order; 3) regulatory adjustments associated with flexible rider network; 4) and earnings fluctuations on a thin margin profile.