FUZHOU,China,Nov. 18,2024 -- Shengfeng Development Limited ("Shengfeng" or the "Company") (NASDAQ: SFWL),a contract logistics company in China providing customers with integrated logistics solutions,announced today that on November 5,2024,Shengfeng Logistics Group,a variable interest entity that the Company controls via a series of contractual arrangements ("Shengfeng Logistics"),forms a joint venture (the "Joint Venture") with Fujian Fulai Aviation Technology Co.,Ltd. ("Fulai Aviation"). The new entity formed in respect of the Joint Venture,Fujian Shengfeng Fulai Low Altitude Comprehensive Services Co.,Ltd.,is expected to leverage Shengfeng Logistics's expertise in logistics with Fulai Aviation's drone technology to deliver drone-based logistics solutions across China's low-altitude logistics sector.

Shengfeng Logistics holds a majority stake in the 51% in the Joint Venture,which is anticipated to affirm the Company's commitment to establishing a leadership role in this burgeoning field. The focus of the Joint Venture will be on providing tailored drone logistics services to address critical needs in remote and mountainous areas and island regions of Fujian Province. Additionally,Shengfeng anticipates that,through the Joint Venture,it may collaborate with local governments to support forest fire prevention and monitoring through drone patrols,to provide timely and effective response capabilities in environmental protection.

Strategic Expansion in China's Low-Altitude Economy

The Joint Venture follows Shengfeng's recent announcement of its entry into China's low-altitude economy,an emerging sector projected to exceed 1 trillion yuan (approximately 140 billion USD) by 2026,according to recent studies by CCID Consulting Co.,a subsidiary of the China Center for Information Industry Development under China's Ministry of Industry and Information Technology. Such studies indicate that the low-altitude market,which includes drone-enabled services within airspace up to 1,000 meters,is positioned to transform logistics with applications across healthcare,e-commerce,agriculture,and environmental monitoring. By expanding into this sector,Shengfeng will endeavor to harness new revenue streams while advancing its strategy of integrated logistics innovation.

Key Services and Customized Solutions

Through the Joint Venture,Shengfeng plans to deliver a range of specialized logistics solutions designed to meet the unique demands of various industries,including:

Rapid-Response Drone Delivery: Enhancing last-mile connectivity for e-commerce and essential goods,particularly in areas with challenging terrain.

Customizable Logistics Solutions: Tailored services for high-value sectors,such as pharmaceuticals and cold-chain logistics,providing clients with the flexibility to adapt delivery schedules and packaging requirements based on industry-specific needs.

Dynamic Pricing and Adaptive Supply Chain: Real-time pricing adjustments based on supply and demand,supported by a responsive supply chain that leverages market data to anticipate and respond to changing needs efficiently.

Leadership Insights and Future Vision

"Forming the Joint Venture with Fulai Aviation aligns with our mission to drive innovation in logistics through drone technology," said Mr. Yongxu Liu,Chairman and CEO of Shengfeng. "By combining our logistics infrastructure with Fulai Aviation's drone capabilities,we believe we will be capable of providing valuable solutions to underserved regions and critical sectors. The formation of the Joint Venture with Fulai Aviation represents an important milestone in our efforts to support sustainable growth in China's low-altitude economy."

About Shengfeng Development Limited

Shengfeng Development Limitedis a contract logistics company in China providing customers with integrated logistics solution services. Established in 2001,the Company has developed extensive and reliable transportation networks in China,covering 341 cities across 31 provinces,as of June 30,2024. The Company provides integrated logistics solutions comprised of B2B freight transportation services,cloud storage services,and value-added services. The Company applies well-established management system and operation procedures to assist companies in China to increase efficiency and improve their own management systems with respect to transportation,warehousing and time management. For more information,please visit the Company's website: http://ir.sfwl.com.cn/.

Forward-Looking Statements

This press release contains "forward-looking statements." Forward-looking statements reflect our current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition,results of operations,business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances,or changes in its expectations,except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable,it cannot assure you that such expectations will turn out to be correct,and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.