The Zhitong Finance App learned that Changjiang Securities released a research report saying that in the cross-border sector where the demand side is booming, the revenue side has maintained high growth, and leading companies have gradually formed brand awareness and scale effects. Under the stage of fluctuating midstream rates, the profit side is still resilient, and there may be a lot of room for growth in the medium to long term. Second, focus on the transformation and positive changes of retail companies: although the revenue side of supermarket companies is still under pressure, profits are expected to further reduce or reverse losses; 100 buyers are constrained by weak consumer spending intentions and are in the business transformation and optimization stage. There is still a certain gap between deducting non-net profit from 2019, but with the upgrading of the shopping center business, it is expected to bring profit elasticity.

Overall, recommendations in the field of cross-border overseas travel are: Anke Innovation (300866.SZ), Zhiou Technology (301376.SZ), Huakai Yibai (300592.SZ), Commodity Mall (600415.SH), and recommended attention in the physical retail sector: Tianhong Co., Ltd. (002419.SZ), Jiajiayue (603708.SH), and Hongqi Chain (002697.SZ).

The main views of Changjiang Securities are as follows:

Overall: Overall consumption is growing steadily, and cross-border exports remain strong

In terms of domestic demand, the total volume of social zero increased 7.2% year on year in 2023, a compound increase of 3.4% in two years, and 4.7% year on year in 2024Q1. The overall consumption growth rate was stable, while residents were more willing to travel, and supply and demand in the cultural tourism market were strong. In terms of exports, China's export value grew at a year-on-year rate of -5%/2% in 2023/2024Q1, and the growth rate was stable, but cross-border e-commerce exports are expected to grow by double digits, maintaining a high level of prosperity.

Cross-border e-commerce: high revenue growth and profit differentiation

The revenue of representative cross-border enterprises increased 26/ 28% year-on-year in 2023/2024Q1, and achieved a 74%/17% year-on-year increase after deducting non-net profit. On the revenue side, although the base is higher, revenue has maintained relatively rapid growth thanks to overseas demand and the growth resilience of mainstream platforms, as well as leading companies rapidly promoting new products and seizing growth opportunities in new channels and new markets. Looking at the profit side, due to multiple factors such as the devaluation of the RMB, the improvement in shipping costs, and the end of enterprise warehousing, the growth rate of corporate non-net profit in 2023 was much faster than the revenue side, and the growth rate of corporate secondhand non-net profit began to diverge in 2024. Due to the gradual reduction of these improvement factors, disturbances in the Red Sea incident, and rising tail end costs, the growth rate of enterprise non-net profit began to diverge.

Looking ahead, Changjiang Securities expects that the corporate revenue side will maintain relatively rapid growth, and that with stage disturbances fading away, leading companies are expected to iron out rate fluctuations with strong supply chains and product upgrades, and profit growth will be resilient.

Supermarkets: Revenue is under pressure; deducting losses does not reduce losses

In 2023, the same supermarket was weak and weak stores were closed, leaving the revenue side still under pressure. The average annual revenue fell 13% year on year, and still fell 7% in 2024Q1. In 2023, through digital empowerment and supply chain optimization, some enterprises improved the efficiency of store operations and led to an increase in overall gross margin; expenses such as rent and labor narrowed as inefficient stores were removed, but revenue pressure passively increased the cost ratio. Overall, annual deduction of non-net profit reduced losses year-on-year, and some enterprises achieved growth by withholding non-net profit in 2024Q1.

Buy 100: Business format transformation, deduction is not recovery

In 2023, the overall scale of the 100 shopping stores was stable, with a slight increase on the revenue side. Passenger flow is expected to recover, but consumer spending will still be weak. In 2023, some 100 purchasers actively promoted business transformation, but the average annual revenue increased 3% year on year, and fell 4% year on year in 2024Q1. The revenue growth rate was relatively lackluster, which may reflect that residents' willingness to spend is weak and consumption conversion is low; on the other hand, some shopping center stores are still in the process of cultivating new stores, and the potential to generate revenue has yet to be tapped. After the impact of fee cuts and rent cuts on merchants in 2022 passed, rent and deduction policies returned to normal, gross margin rebounded steadily, and the channel scale was relatively stable. Labor and rent costs were relatively stable, mainly due to the transformation and optimization of existing store business formats. As a result, the cost ratio narrowed, and the overall increase in deducted non-net profit was restorative.

Risk warning: Residents' willingness to spend continues to be weak; the emergence of new business formats affects the competitive pattern of the industry.