Matters:
The company released the 2023 annual report and the 2024 quarterly report. 23 It achieved revenue of 11.3 billion yuan, yoy +48%, and realized net profit of 2.68 billion yuan, yoy +142%; 24Q1 achieved revenue of 2.68 billion yuan, yoy +26%, and realized net profit of 710 million yuan. If investment income and asset disposal were excluded, profit yoy +96%, and main business profit grew rapidly.
The company plans to distribute a cash dividend of 0.20 (tax included) per share to all shareholders, totaling 1,097 billion yuan (tax included), accounting for 40.99% of the net profit attributable to shareholders of listed companies.
Commentary:
The export boom in the Yiwu market is high, and market-based pricing of rents has begun. According to the company's announcement, Yiwu's imports and exports increased by 47.3% year-on-year in January-January, with exports increasing by 41.0%; imports and exports to the “Belt and Road” countries increased by 56.6%, accounting for 65.1% of Yiwu's total import and export value during the same period, driving Yiwu's import and export growth of 34.7 pcts.
The average daily traffic of the mall exceeds 210,000, the average daily number of foreign investors is 3,523, and the average daily yoy is +160%. The boom is higher than the level of 2019 and 2023. Based on indicators such as the price index and shopping mall sentiment, the company adjusted the rent for maturing stores at the end of '23, with an average increase of 5.5%. The growth rate is expected to be no less than 5% for the next three years.
Market-based rent pricing helps create a prosperous and fair business environment, and also has a certain effect on the company's performance.
Chinagoods is rich in intelligent innovation services, and Yiwu Pay helps merchants go overseas. The company's trade services revenue reached 600 million yuan in 2023. The CG platform launched service content such as AI and digital people for small businesses. The cumulative number of uploaded products exceeded 10 million, achieved GMV of more than 65 billion yuan throughout the year, and profits exceeded 80 million yuan. The GMV of the Q1 CG platform was 11 billion yuan, an increase of 37.5% over the previous year. By the end of '23, Yiwu Pay had opened more than 20,000 cross-border RMB accounts, adding more than 8.5 billion yuan in cross-border RMB payment transactions. Cross-border transactions exceeded 6.2 billion yuan in the first quarter of '24, and the growth rate was rapid.
The data entry table is fully prepared, and additional input has been added. According to the company's announcement, the amount of intangible assets-data resources that the company can confirm as of Q1 exceeds 8 million yuan. The company continues to invest in digitalization, data resources, etc. According to the announcement, it has reached 130 million yuan in recent years, and the investment is expected to exceed 50 million yuan for the whole of 24.
Investment advice: We are firmly optimistic about the stability of the company's main business operations and the important role it plays in the process of Chinese cross-border merchants going overseas; at the same time, we look forward to the company's investment and development in cross-border payments and data entry. The estimated operating income for 24-26 is 137/161/19.9 billion yuan (previous value: 137/16.6 billion yuan in 24-25 years), net profit of 28.3/34.7/4.98 billion yuan (previous value of 28.3/3.30 billion yuan in 24-25 years). Using the segmented valuation method, reference to comparable companies, the market operation business will be given 16 xPE for 24 years, and the trade service business will be 25 xPE for 24 years, with a total target market value of 53.1 billion yuan, corresponding to a target price of 9.7 yuan/share, maintaining the “strong” rating.
Risk warning: macroeconomic fluctuations, new business exhibitions fall short of expectations, industry competition intensifies