Xiamen ITC is a supply chain manager focusing on large supply chain management, financial services, medical and health care.

The ownership structure is stable and the organizational structure is constantly upgrading. Establish a "whole industry chain model" to cover commodity industry chain services through service income, financial income and transaction income. Focus on the core business of supply chain management and actively expand the emerging business of health science and technology.

In the 2022 annual report, the company achieved an operating income of 521.918 billion yuan, an increase of 12.30% over the same period last year, a net profit of 3.589 billion yuan, an increase of 4.41% over the same period last year, and a return on net assets of 15.35%. (1) Revenue recovery: supply chain management business achieved operating income of 505.773 billion yuan, an increase of 10.82% over the same period last year; (2) Gross profit margin increased: after combining supply chain management business with futures profits and losses in 2022, the comprehensive gross profit margin increased to 1.49%, an increase of 0.24% over the same period last year. Mainly because the company tamps the category advantage, expands the emerging business field. (3) the dividend yield and dividend ratio are ahead of comparable companies: the company's dividend yield and cash dividend ratio have maintained growth in recent years, with an average annual dividend ratio of 35% in the past three years and a commitment that the dividend ratio in the next three years will not be less than 30%. The dividend yield of the 22-year company reached 8.57% in July 23, an increase of 1.98pct compared to 2021, ahead of comparable companies.

The core main business maintains the head advantage, and the digital superposition of health science and technology continues to empower the whole industry chain. The size of the company's core category continues to grow, and the incremental space comes from the increased market share of the head of the domestic commodity supply chain and the expansion of overseas markets. Constantly adjust their strategic positioning and business content, expand and increase the health science and technology business sector. The layout of the industrial chain will break through again to promote the integrated service of the supply chain. ITC cloud chain, as the intelligent logistics platform of Xiamen ITC, expands the digital application scene of Xiamen ITC in the field of supply chain, and accelerates the process of digital transformation.

Economic recovery heralds the rise in the scale of the global commodity market, and the leader of the commodity supply chain is expected to show strong resilience, specifically reflected in: ① volume increase: operating volume growth, actively expand overseas business layout; ② gross margin improvement: take the initiative to optimize business types and product categories.

Profit forecast and company rating: Xiamen ITC is actively transforming its business layout, focusing more on the overseas layout and development of supply chain business. We are optimistic about the expansion of the commodity market and the increase in the market share of leading companies, as well as high-quality assets with high dividend yields. We estimate that the company's 2023-2025 net profit will be 3.36 billion yuan / 3.73 billion yuan / 4.33 billion yuan, corresponding to a PE of 5.0 less 4.5 pounds 3.9, giving the company a "buy" rating for the first time.

Risk hints: commodity price volatility risk, policy change risk, exchange rate risk.