Core views:
Incident: Commodity City released the 2023 Annual Report and 2014 Quarterly Report announcements. (1) In 2023, the company achieved revenue of 11.30 billion yuan, an increase of 48.3% year on year; realized net profit of 2.68 billion yuan, up 142.3% year on year; net profit after deducting non-return to mother was 2.47 billion yuan, up 39.9% year on year. (2) In terms of single 23Q4 performance, the company's revenue increased 161.2% year on year to 3.39 billion yuan, net profit to mother was 360 million yuan, and net profit after deducting non-return to mother increased 56.2% year on year to 320 million yuan.
By business: (1) In 2023, the company's market operating revenue increased 81.2% year-on-year to 3.07 billion yuan, mainly due to the addition of the new energy products market in District 2; according to the company's 23rd annual report, the company adjusted rents for maturing positions in the market, and rents rose by an average of 5.5%. The growth rate is expected to be no less than 5% for the next three years; the 22-year rent reduction policy led to a low base. (2) Trade services business revenue increased 43.4% year-on-year to 60 billion yuan.
The 24Q1 Company's revenue increased 26.4% year on year to 2.68 billion yuan, net profit to mother decreased by 41.7% year on year to 710 million yuan, and net profit after deducting non-return to mother decreased 36.0% year on year to 690 million yuan.
The company's apparent profit fluctuated greatly, mainly due to a year-on-year decrease in investment income of joint ventures and a year-on-year decrease of 160 million yuan in asset disposal. Excluded profit increased 95.95% year over year, reflecting substantial strong growth in the company's main business.
In 2023, the company paid a cash dividend of 0.2 yuan per share. The total cash dividend reached 1.1 billion yuan, with a dividend ratio of 41.0%.
Profit forecasting and investment advice. We expect the company to achieve overall operating income of 13.8.3/162.6/18.92 billion yuan in 2024-2026, a year-on-year change of 22.4%/17.6%/16.3%; net profit to mother will be 28.6/32.2/3.88 billion yuan, respectively, with a year-on-year change of 7.1%/12.2%/20.8% from 2024-2026. Referring to comparable company valuations, the company was given a 2024 20x PE valuation, with a reasonable value of 10.45 yuan/share, giving it a “buy” rating.
Risk warning. The risk of macroeconomic fluctuations; the risk of new business development falling short of expectations; the risk of insufficient talent reserves. The company may face the risk of insufficient reserves of professional talents and complex talents.