Core viewpoints

Farmers' market has a variety of values, and it is still the main channel for the circulation of agricultural products, the retail end meets the consumer needs of subdivided groups, the wholesale end is an important distribution center and supply source of agricultural products, and some agricultural products markets are of strategic significance. for the society's important infrastructure projects to meet the basic needs of society in a specific period of time. Relying on the industrial belt of agricultural products, radiating strong consumption power market and convenient transportation and logistics are important natural barriers to the agricultural product market. At present, large wholesale markets have occupied a dominant position, gathering a large number of business flows, with obvious first-mover advantages, and the government also pays attention to the cultivation and support of existing markets. Agricultural products rely on Shenzhen state-owned assets, agricultural market network covers the whole country, the company enhances value-added services, extending to the upper and lower reaches of the industrial chain, while capital expenditure and expense expenditure show a downward trend, profitability is expected to improve; Reits New deal is conducive to the company to achieve stock market value revaluation, improve the balance sheet.

Content summary

Agricultural batch market is an important distribution center and supply source of agricultural products, which is of strategic significance. The proportion of direct supply of agricultural products from the origin is not high, more than 80% of fresh products are purchased from the wholesale market, and more than half of the merchants purchase goods completely from the wholesale market. The market of agricultural products can serve as an important source of supply in a special period to meet the basic needs of social residents.

The concentration of agricultural market is enhanced, and the leading brands have advantages. The average business area and transaction volume of farmers' markets of more than 100 million yuan are growing, the trend of industry concentration is significant, and large wholesale markets have obvious first-mover advantages.

Agricultural products are the leading enterprises in the circulation of agricultural products throughout the country, covering the whole industrial chain. The company's layout throughout the country, the main "Haiji Star" brand, the steady growth in performance in recent years, the improvement of management efficiency superimposed digital transformation, excluding the influence of one-time factors, the overall downward trend of the company expense rate, while capital expenditure shrinks, profits are released. The company's core business is wholesale market operation, power market supporting services, and has become a comprehensive agricultural product system service provider covering agricultural product circulation, agricultural product supply chain, agricultural science and technology and financial business. At the same time, the company built the whole industry chain of agricultural product circulation, and the central circulation mode reduced the circulation links and the repeated construction of infrastructure, improved the problems of high cost, high loss and low efficiency under the traditional mode, and helped the trading center realize the transformation from relying on natural advantages such as geographical location to charging simple rent to providing a variety of value-added services with higher barriers.

The positive REITs policy is expected to invigorate the stock of assets. As an asset-heavy enterprise, the company has high leverage. Issuing REITs can be used as the exit path of investment and enhance the liquidity of fixed assets. At the same time, the company can use the funds obtained from REITs financing to develop more growing and profitable businesses.

Investment suggestion: we expect the company's net profit from 2023 to 2025 to be 3.75,4.47 and 504 million yuan respectively, corresponding to 31,26,23 times of PE, giving the "overweight" rating for the first time.