Introduction to this report:

In 2018, Black Friday achieved another excellent result, and the strategic layout of emerging regions and private brands achieved obvious results. Cross-border leaders have benefited from multiple benefits, such as the recent easing of trade frictions between China and the US, and expectations that top-level design helped improve cross-border import policies.

Key points of investment:

Maintain the increase in holdings rating. The 2018-2020 EPS was maintained at 0.81, 1.14, and 1.50 yuan, and the target price was maintained at 29.3 yuan.

“Black Five” achieved another great performance, verifying the strength of the leaders. In 2018, the GMV export of the “Black Five” campaign company's own business reached 1.4 billion yuan+, an increase of 45% + over the previous year. Among them, the GB Division/Clothing Division increased by more than 55%/40%, respectively.

The strategic layout of emerging regions, private brands, etc. is gradually showing results. By category, categories such as mobile phones, home gardening, smart watches, men's clothing, and TVBOX ranked the highest in sales. Cycling/kitchen facilities/menswear and household appliances were +203.7%/136.6%/80.9%/52.4%, and independent brands +45.5% compared to the same period last year. Looking at the subregions, the top 10 sales rankings were the United States, Germany, Spain, France, Italy, the United Kingdom, Israel, Poland, Portugal, and Canada. Among them, potential markets such as the Netherlands, Belgium, Austria, and Portugal were +68.9% year on year, emerging markets such as the Philippines and India were +470% compared to the same period last year, and Israel and Poland advanced to the top ten along the Belt and Road.

Trade sentiment between China and the US has been restored, and cross-border import policies have been improved. G20 China and the US reached an important agreement on tariffs and decided to stop trade restrictions such as tariff upgrades. The company's exports are mainly B2C direct mail, and the US business accounts for less than 30%. We have reiterated many times before that the trade friction between China and the US mainly affects the general trade system and has no significant impact on the company's fundamentals. The easing of trade frictions between China and the US will usher in a recovery in sentiment. On November 21, the State Council meeting called for continuing the cross-border e-commerce import policy and increasing the amount of tax incentives. On November 30, the Ministry of Commerce and 6 other departments jointly issued a notice to further implement the decisions of the meeting. Improving the cross-border import policy will promote the development of industry standards and facilitate the improvement of leading companies' advantages.