(Yicai Global) Dec. 14 -- Shares of SF Intra-City Industrial, S.F. Holding's Uber-like platform for parcel deliveries within one city, tumbled on the first day of trading on the Hong Kong Stock Exchange.

SF Intra-City's stock price [HK: 9699] slid as much as 11.7 percent to HKD14.50 (USD1.90) intraday. The Hang Seng Index was 1.4 percent down in the afternoon.

Meanwhile, in Shenzhen, S.F. Holding's equity price [SHE: 002352] fell 3.5 percent to CNY63.65 (USD10).

SF Intra-City was planning to raise HKD2 billion (USD256.4 million) via its initial public offering, and potentially an additional HKD313 million (USD40.1 million) by exercising its greenshoe option, according to the Hangzhou-based company's prospectus.

Some 35 percent of the IPO proceeds should be used for research and development, as well as technology. A fifth of the total will be put into expanding service coverage and a similar sum into strategic acquisitions or value chain financing. The rest will be spent on marketing and branding or considered working capital.

After establishing the intra-city arm in 2016, Shenzhen-headquartered S.F. Holding spun it off in 2019. The on-demand unit's business covered more than 1,000 cities, 530,000 merchants, and 126 million users across China as of May, per the prospectus. The platform had more than 2.8 million registered drivers and 2,000 brand clients.

The business is not yet profitable. In the first five months of this year, SF Intra-City widened its losses by 46 percent to CNY353 million (USD55.5 million) from a year earlier, according to the prospectus. Meanwhile, its revenue tallied CNY3 billion (USD471.4 million). In 2020, the company almost doubled its losses to CNY758 million from 2019. But its revenue more than doubled to CNY4.8 billion.

Some of SF Intra-City's biggest rivals include logistics firm Dada Group, controlled by e-commerce behemoth JD.Com, and the courier arm of lifestyle service provider Meituan. But both of the competitors have failed to turn a profit.

These on-demand logistics companies are still in the midst of a price war, and they cannot form a scale advantage with a fixed customer unit price and the suppression of rivals, said Pan Helin, executive dean of a digital economy institute at Zhongnan University of Economics and Law.

Editor: Emmi Laine, Xiao Yi