The company's operating conditions improved significantly in 2023: throughout 2023, the company achieved a total GTV transaction volume of 3.1 trillion yuan, +20% year over year; revenue of 77.8 billion yuan, +28% year over year. Although GTV showed high and low quarterly performance, revenue remained stable, and the year-on-year performance was significantly better than GTV. It mainly benefited from actively expanding the “two wings” business, and the share of revenue from home improvement and emerging businesses with high monetization rates increased markedly.
Profit indicators reached record highs, and cost control was effective: throughout 2023, the company achieved net profit of 5.9 billion yuan, turning a loss into a profit; adjusted net profit of 9.8 billion yuan, +245% year-on-year; adjusted net interest rate of 12.6%, an increase of 8 pcts over the previous year. Although total transactions and revenue have yet to return to previous highs, profits have reached record highs.
Throughout 2023, the company contributed a profit margin of 34.0%, up 3 pcts year on year; gross profit margin was 27.9%, up 5 pct year on year; all increased for 2 consecutive years. In addition to a slight increase in sales rates due to the expansion of the home improvement and home furnishing business, store operating and other operating cost rates, management rates, and R&D rates have all been significantly reduced.
Stock housing business recouped losses: Throughout 2023, the company's stock housing business GTV was 2.0 trillion yuan, +29% year over year; stock housing business revenue was 28 billion yuan, +16% year over year; as the company actively expanded stores, the share of chain family transactions decreased by 5 pct to 42%, while the share of value-added revenue such as platform fees and franchise fees increased by 3 pct to 18%. Influenced by changes in the transaction structure, the monetization rate of the stock housing business fell to 1.38% throughout 2023, and the contribution margin rose to 47%. Starting in September, Chainjia lowered commission rates in Beijing. Judging from various Q4 indicators, the impact on revenue and profit is manageable.
The new housing business performed better than the industry: throughout 2023, the new housing business achieved a total GTV transaction volume of 1.0 trillion yuan, +7% year over year, outperforming the national commercial residential sales by -6% year on year, and the market share increased to 9.7%; the new housing business revenue was 30.6 billion yuan, in line with GTV's +7% year over year. Throughout 2023, the monetization rate remained flat at 3.05% year on year, and Q4 reached a record high of 3.18%; contributing profit margin 26.6%, up year on year.
The “two wings” business thrived: throughout 2023, the home improvement and home furnishing business revenue was 10.9 billion yuan, +115% year-on-year, monetization rate 82%, and profit margin 29%. Revenue from emerging businesses centered on the rental business was 8.4 billion yuan, +195% year over year, with a monetization rate of 8.5% and a profit margin of 24%.
The number of agents in the company's stores has rebounded: by the end of 2023, the number of company stores was 44,000, +8% year over year; 428,000 agents, +9% year over year; the number of active stores and active agents accounted for 96% and 93%, respectively. Q4 The company's mobile app had 43.2 million monthly active users, +18% year over year, but there was a slight decline from month to month.
Investment advice: We raised our previous profit forecast. We expect the company's adjusted net profit for 2024-2025 to be 98.99 billion yuan (original value: 82/83 billion yuan), and earnings per share of 2.63/2.65 yuan, respectively. Corresponding to the current share price PE, it is 12.2/12.1 times, respectively, to maintain a “buy” rating.
Risk warning: If the housing industry fluctuates due to factors such as a slowdown in economic growth, a decline in residents' income expectations, policy relaxation falling short of expectations, and the impact of credit risk incidents on housing enterprises, the company's operations will be adversely affected.