The share continues to increase to cushion the downward pressure on the industry, and wait for the second growth driven by the home improvement business. We lowered the company's 2024-2025 non-GAAP net profit forecast to 87.3/10.54 billion yuan (previous value of 10.5.9/12.24 billion yuan); added the 2026 non-GAAP net profit forecast of 12.42 billion yuan, corresponding to a year-on-year growth rate of -10.9%/20.7%/17.8%, corresponding to EPS 2.3/2.8/3.3 yuan after dilution. Considering the company's platform-based advantages and the continuous increase in share driven by store expansion to cushion the downward pressure on the industry, and waiting for the home improvement and rental business to drive a second increase, the current stock price of 36.9HKD corresponds to 14.3/11.8/10.0 times PE in 2024-2026, and has been lowered to an “increase in holdings” rating.
The 2023Q4 non-chain home trading scale and new business grew rapidly. Revenue and profit exceeded expectations of 2023Q4 Shell's revenue of 20.2 billion yuan (slightly higher than Bloomberg's unanimous estimate of 19.4 billion yuan), stemming from the scale of stock housing transactions and new business exceeding expectations; non-GAAP net profit of 17.1 billion yuan (higher than Bloomberg's agreed expectations (1.49 billion yuan)), mainly due to improvements in gross margin due to lower fixed remuneration of brokers. (1) Stock housing: 2023Q4 Shell Stock House GTV increased 30% year on year, and revenue increased 15% year on year, mainly due to the increase in the share of Beilian stores. Chainjia GTV increased 17% year on year, and non-Chainjia GTV increased 41% year on year. (2) New housing: The scale has been impacted to a certain extent, but the rate is still resilient. 2023Q4 GTV for new homes fell 10% year over year, and the monetization rate reached 3.18%. (3) Home improvement: Revenue of 3.6 billion yuan, an increase of 74% over the previous year. In 2023, the proportion of first-track diversion contracts reached 43%, and 11 cities achieved profits at the operational level. (4) Emerging business: Revenue of 2.9 billion yuan, a year-on-year increase of 169.3%, mainly due to the expansion of the scale of the leasing business.
The expansion of stores during the downturn in the industry led to an increase in share. As second- and third-tier cities accelerated their transformation into the stock market, the home improvement and home furnishing business continued to optimize and iterate as the scale grew. (1) Real estate transactions: In the short term, the 2024Q1 real estate market fluctuates. Combined with the high base over the same period, growth and ecosystem development are being pursued under medium- to long-term inventory trends. In 2024, it is expected to link more than 5,000 new stores to drive market share expansion; (2) New business: The home improvement and home furnishing business continues to improve service quality as basic capabilities improve; the scale of long-term rental business operations is expected to continue to expand rapidly.
Risk warning: Real estate and economic recovery falls short of expectations, new business expansion falls short of expectations, changes in regulatory policies.