(Yicai Global) July 14 -- SF Holding’s stock price added 4.1 percent today after the Chinese express delivery giant said earnings returned to the black in the second quarter.

The shares [SHE:002352] surged almost 9 percent before settling at CNY67.30 (USD10.40). The benchmark Shenzhen Component Index lost nearly 1 percent. The stock has skidded since closing at a record CNY117.10 on Feb. 10.

Net profit should be in the range of CNY1.63 billion to CNY1.82 billion (USD251.8 million to USD281.2 million) for the three months ended June 30, the Shenzhen-based company said yesterday. It had a first-quarter loss of CNY989 million (USD152.7 million) due to big investments in diversified businesses.

For the first half, profit is expected to plunge to between CNY640 million and CNY830 million, from CNY3.8 billion in the same period last year, SF said.

The firm hiked first-quarter investment to improve processing capacity, which led to cost pressures, SF added. Fast growth in economical express delivery narrowed the gross profit margin, while labor costs increased in the first quarter as employees worked during the Chinese New Year holiday.

Deliveries jumped almost 41 percent to 4.18 billion from January to May, according to the company’s monthly data. Operating income reached CNY70.8 billion (USD10.9 billion) in the same period, a 23.5 percent year-on-year increase.

The pressure on the firm’s performance is mainly due to its business scale exceeding the network capacity, according to a report by Citic Securities. An improvement is expedited in the second half, compared with a year earlier, with an increase in capacity and optimized industrial chain.

Editor: Futura Costaglione