Core views
In the first quarter of 2024, the company achieved revenue of 16.38 billion yuan, a year-on-year decrease of 19.2%, mainly due to the high base of Xiaoyangchun in the same period last year. The total transaction volume of the company in the first quarter of 2024 was 629.9 billion yuan, a year-on-year decrease of 35.2%. Among them, the total transaction volume of stock housing and new housing decreased by 31.8% and 45.4%, respectively. In the first quarter of 2024, the company achieved adjusted non-GAAP net profit of 1.39 billion yuan, a year-on-year decrease of 60.9%. The main reason why the performance growth rate fell short of the revenue growth rate was that profitability was under pressure. The comprehensive gross profit margin was 25.2%, down 6.1 percentage points from the same period last year. The number of the company's stores and agents grew steadily, and the new track business grew brilliantly, increasing its revenue share to 35.0%, or becoming the second largest growth pole. Among them, revenue from housing rental services increased 189.3% year on year, contributing to profit correction; revenue from home improvement and home furnishing business increased 71.1% year on year; and revenue from emerging businesses and other businesses increased 85.3% year on year.
occurrences
In the first quarter of 2024, the company achieved revenue of 16.38 billion yuan, a year-on-year decrease of 19.2%; realized net profit of 430 million yuan, a year-on-year decrease of 84.3%; and realized adjusted non-GAAP net profit of 1.39 billion yuan, a year-on-year decrease of 60.9%.
Brief review
Total transaction volume fell by 35.2%, putting pressure on the company's performance under high base. In the first quarter of 2024, the company achieved revenue of 16.38 billion yuan, a year-on-year decrease of 19.2%. Mainly due to Xiaoyangchun's high base in the same period last year, the total volume of first-hand housing transactions in the first quarter of 2024 declined year-on-year. The total transaction volume of the company in the first quarter of 2024 was 629.9 billion yuan, down 35.2% year on year. Among them, total stock housing transaction volume was 453.2 billion yuan, down 31.8% year on year, and total transaction volume of new housing was 151.8 billion yuan, down 45.4% year on year. In the first quarter of 2024, the company achieved net profit of 430 million yuan, a year-on-year decrease of 84.3%; adjusted non-GAAP net profit of 1.39 billion yuan, a year-on-year decrease of 60.9%. The main reason why the performance growth rate fell short of the revenue growth rate was due to pressure on the company's profitability. The comprehensive gross profit margin was 25.2%, down 6.1 percentage points from the same period last year. Specifically: (1) the net income of the stock housing business declined and the fixed remuneration of chain agents remained relatively flat, contributing a profit margin of 44.5%, down 4.6 percentage points from the previous year; (2) the net revenue of the new housing business combined with the increase in external commissions, contributing 22.3%, a year-on-year decrease of 4.8 percentage points; (3) the share of revenue from home improvement and housing rental services, which contributed low profit margins, increased 7.8 and 11.6 percentage points, respectively.
The number of stores and agents is growing steadily, and the new non-brokerage track business is growing at an impressive rate, which is expected to become the second growth pole. By the end of the first quarter of 2024, the number of the company's stores exceeded 44,000, up 7.1% year on year; the number of agents was 443,000, up 1.6% year on year.
The non-brokered new track business showed impressive growth, accounting for 35.0% of revenue, an increase of 21.7 percentage points over the same period last year. Among them, housing rental service revenue was 2.63 billion yuan, up 189.3% year on year, and the contribution profit was also revised to 144 million yuan from the same period last year, which was presented as a separate segment for the first time in the report; the home improvement and home furnishing business achieved revenue of 24.1 billion yuan, an increase of 71.1% year on year; and emerging and other businesses achieved revenue of 70 billion yuan, an increase of 85.3% year on year.
Maintain profit forecasts and buy ratings. We maintain our previous profit forecast, that is, the company's EPS for 2024-2026 was 1.78/1.99/2.18 yuan, respectively, and non-GAAP net profit to mother was 10.7.5/116.8/12.62 billion yuan, respectively. We are optimistic that the depth of second-hand housing transactions in China will continue to increase, as well as the company's leading position in the field of stock housing and new housing transactions, and the development potential of the second-track business, and maintain the purchase rating.
Risk warning: 1) The repair of second-hand housing and new housing transactions may fall short of expectations. Subsequent new and second-hand housing market trends are still affected by the macroeconomic environment and residents' income expectations. If housing transactions fall short of expectations, it may cause the company's GTV and trading business revenue growth to fall short of expectations and put pressure on performance; 2) Emerging business development may fall short of expectations. The company joined Shengdu Home Furnishing in the second quarter of 2022, and plans to complete the acquisition of iSpace Home Furnishing in the first half of 2024. In the future, it will rely on the home improvement business to open up a second growth curve. However, there is a risk that the integration results will fall short of expectations, and iSpace Home Furnishing has a risk that the acquisition will fail; the home improvement business is not a completely standardized business, and there is also a risk that the results of replication in many places will fall short of expectations.