Incident: Commodity City released the 2023 Annual Report and 2024 Quarterly Report announcements.
Comment:
Brief performance review. In 2023, the company achieved total revenue of 11.3 billion yuan, an increase of 48.3% over the previous year; realized net profit of 2,676 billion yuan, an increase of 142.25% over the previous year; net profit after deduction of 2,469 billion yuan, an increase of 39.86% over the previous year. The opening of the company's second district east new energy product market, rent reduction last year, and year-on-year expansion in product sales led to a sharp year-on-year increase in revenue in 2023. In the first quarter of 2024, the company achieved operating income of 2,681 billion yuan, a year-on-year increase of 26.42%; realized net profit attributable to shareholders of listed companies of 713 million yuan, a year-on-year decrease of 41.66%; and net profit after deduction of 691 million yuan, an increase of 36.03% over the previous year. The increase in revenue and profit in the first quarter was mainly due to a sharp increase in the profits of joint ventures and joint ventures in the first quarter of 2023, and a year-on-year decrease of nearly 730 million yuan in investment income in the first quarter of 2024. After excluding investment income and asset disposal profit and loss, our estimated main business profit increased 98.57% year over year.
The Yiwu market is active, and the scale of imports and exports is growing steadily. In 2023, the Yiwu market employed more than 200,000 people, operated 75,000 stores, and the total number of market players exceeded 1 million. Yiwu's total import and export value reached 566.05 billion yuan in 2023, an increase of 18.2% over the previous year. Among them, exports broke through the 500 billion yuan mark for the first time, reaching 5057 billion yuan, a year-on-year increase of 16.0%, a record high; imports reached 65.48 billion yuan, an increase of 38.8% over the previous year. From January to February 2024, Yiwu's total import and export value reached 116.6 billion yuan, an increase of 47.3% over the previous year; of these, exports amounted to 102.77 billion yuan, an increase of 41.0%; imports amounted to 13.83 billion yuan, an increase of 119.9%. The export business remains booming.
The market operation business completed rent increases, and the growth rate for the next three years will not be less than 5%. Affected by the active trade market in Yiwu City, at the end of 2023, the company adjusted rents for maturing positions in the market. Rents increased by an average of 5.5%. The growth rate is expected to be no less than 5% in the next three years. The Second Zone East New Energy Products Market opened in 2023, adding 131,000 square meters of construction area and adding more than 650 commercial spaces. The market business is expected to usher in strong growth.
Coverage for the first time, giving the company an investment rating of “increase in holdings”. In 2024, global demand showed positive signs. Yiwu's export sentiment continued to improve, and the company's business growth continued to be optimistic. The company's earnings per share for 2024/2025 are expected to be 0.53/0.59 yuan, respectively, and the current stock price is 16.11/14.44 times PE, respectively. Coverage for the first time, giving the company an investment rating of “increase in holdings”.
Risk warning: Risks such as increased competition in the industry, the impact of natural disasters, large exchange rate fluctuations, and lower than expected performance growth.