Net profit to the mother increased by more than 140% in 2023, and the main business continued to perform well in the first quarter of 2024. The company's revenue in 2023 was 11.3 billion yuan, up 48.3% year on year, and net profit to mother was 2,676 billion yuan, up 142.25% year on year, in line with previous performance forecast data. In the first quarter of 2024, the company's revenue increased 26.42% to 2,681 billion yuan, and net profit to mother fell 41.66% to 713 million yuan, mainly due to a sharp decrease in investment income and asset disposal income compared to last year. Excluding the above effects, the company's profit for the first quarter of 2024 increased 95.95% year on year, mainly benefiting from the year-on-year increase in profit from market operations and trade services.
In addition, the company plans to distribute a cash dividend of 1,097 billion yuan (tax included) in 2023, accounting for 40.99% of net profit attributable to shareholders of listed companies this year.
Market operating business rents are rising, and emerging businesses continue to monetize and contribute more. By business, the market operating business increased by 81.16% in 2023, benefiting from the market carry-over revenue of the East New Energy Market in District 2 and the low base of rent reduction due to the epidemic in the same period last year. In the future, the company will also adjust rents based on indicators such as prosperity. It is expected that the growth rate for the next three years will not be less than 5%, achieving steady growth performance. Among emerging businesses, the Chinagoods AI Smart Innovation Platform's services continued to be enriched and intelligent. The GMV added 11 billion yuan in the first quarter, an increase of 37.5% over the previous year. Yiwupay completed more than 6.2 billion yuan in cross-border transactions in the first quarter, and the data element business was also monetized. The amount of data resources that could be confirmed at the end of the first quarter exceeded 8 million yuan.
The gross margin was further increased, and the period expense ratio was optimized. The company's comprehensive gross margin in 2023 was +11.18 pct to 26.5% year on year. Among them, the gross margin of the market operation increased sharply by 28.52 pct to 71.83%, and the share of low-margin businesses benefiting from rising rent dynamics and seat selection fees increased. The gross margin of market operation increased further in the first quarter of 2024, and the sales expense ratio/management expense ratio decreased by 2.62 pct/1.4 pct year-on-year respectively in the first quarter of 2024, achieving cost optimization. Net operating cash flow was 180 million yuan, improving year over year.
Risk warning: rent increases fell short of expectations; emerging businesses fell short of expectations; foreign trade export sentiment declined.
Investment advice: The company's main market business will maintain steady growth with improved supporting services and market development in the future, and emerging businesses such as digital trade and cross-border payments will inject long-term growth potential. Considering the increase in value-added service revenue and rent increases brought about by the establishment of the company's comprehensive foreign trade service system, we raised the company's net profit forecast for 2024-2025 to RMB 28.66/ RMB 3.255 billion (previous values were RMB 27.12/29.28 billion, respectively). The net profit forecast for 2026 was 4.162 billion yuan, an increase of 27.85% over the previous year, mainly considering the increase in leased space and rent increases due to the expected completion and commissioning of the company's Global Digital Trade Center.
The net profit forecast for 2024-2026 corresponds to PE of 16.1/14.2/11.1 times, respectively, maintaining a “buy” rating.