On May 27, cross-border e-commerce concept stocks led the two markets. As of press release, Kaichun shares had risen and stopped by 20cm, leading shares, Plutong, and Cross-border Connect had risen or stopped, OneNet One Innovation and Xingwei shares had risen by more than 12%, while many stocks such as Huayuanghai, Saiwei Era, and Kaichuang Electric continued to rise.

According to the news, recently, the Executive Meeting of the State Council reviewed and approved the “Opinions on Expanding Cross-border E-commerce Exports and Promoting Overseas Warehouse Construction” (hereinafter referred to as the “Opinions”). The conference pointed out that developing new forms of foreign trade, such as cross-border e-commerce and overseas warehouses, is conducive to promoting the optimization of foreign trade structure and scale stability, and to creating new advantages in international economic cooperation. It is necessary to actively cultivate cross-border e-commerce operators, encourage local authorities to support traditional foreign trade enterprises to develop cross-border e-commerce based on their unique advantages, strengthen the training of cross-border e-commerce talents, provide enterprises with more display and docking platforms, and continue to promote brand building.

This time, the popularity of cross-border e-commerce has directly risen to the attention of the National Standing Committee. It is reported that this is the first time that a meeting of this level has focused on the construction of overseas warehouses separately, and exports are currently the main focus of the market.

Guotai Jun An believes that this “opinion” is in line with the previous policy.The confirmation policy supports the continuous increase in cross-border e-commerce and overseas warehousing.

Policies promote overseas warehouse construction

Overseas warehousesIt is an innovative logistics solution in the field of cross-border e-commerce. It is mainly set up overseas by logistics companies, e-commerce platforms, or large cross-border sellers to achieve local storage and delivery of products through leasing or building their own warehouses. As a new model of foreign trade, it is classified asOverseas warehouses of third parties, overseas warehouses operated by platforms, and overseas warehouses operated by companies themselvesThree main forms.

The establishment of these overseas warehouses has provided many benefits for exporters, including reducing shipping time and costs, simplifying customs clearance processes, enhancing the customer service experience, and improving the efficiency of returns and exchanges. They also help enterprises manage supply chain risks more effectively on a global scale, reduce the cost of transporting individual items by transporting goods in bulk to overseas warehouses, and protect supply chain stability under the influence of geopolitical events.

In recent years, thanks to its obvious advantages, the overseas warehouse model has been more and more widely used in the field of cross-border e-commerce in China.

According to data from market research firm Frost & Sullivan, from 2018 to 2023, the market size of China's B2C export e-commerce logistics solutions using the overseas warehouse model surged, growing from 48.6 billion yuan to 203.9 billion yuan. The market share reached 45%, with a compound annual growth rate of 33.2%.It is estimated that by 2028, the market size will reach 387 billion yuan, the market share will increase to 51%, and the compound annual growth rate is expected to be 13.7%. This growth rate far exceeds the traditional direct mail model, showing the huge market potential of the overseas warehouse model.

According to Euromonitor data, the online rate of US and UK furniture products has increased from 16%/19% in '18 to 28% in '22, which is above the global average of 22%. Additionally, according to CBRE Group of Companies (CBRE) forecasts, every $1 billion increase in e-commerce sales would require an additional 1 million square feet of storage and distribution space.

According to agency estimates, the market size of China's B2C export e-commerce logistics solutions using the overseas warehouse model increased from 48.6 billion yuan to 203.9 billion yuan in 2018-2023, and is expected to reach 387 billion yuan in 2028, with a broad market space.

Domestic policy support has also provided a strong guarantee for the steady development of the cross-border e-commerce industry. The policy covers various aspects such as tax rebates, logistics optimization, and digital marketing for cross-border e-commerce exports. At the same time, pilot customs supervision has been promoted nationwide, improving the standardization of the industry.As of May 2023, China has established 165 comprehensive cross-border e-commerce pilot zones, covering 31 provinces, regions and cities across the country, which has promoted rapid growth in the scale of cross-border e-commerce exports.Since 2013, the export volume has grown at an average annual rate of more than 20%, from 2.7 trillion yuan to 12.3 trillion yuan in 2022, highlighting the strong resilience of China's foreign trade.

At the same time, all regions are actively promoting the development of cross-border e-commerce, and the pace of cultivating the cross-border e-commerce industry ecosystem is accelerating. For example:

ShanghaiSupport the joint construction of shared overseas warehouses, and encourage cross-border e-commerce micro, small and medium-sized enterprises to rent overseas warehouses to “go overseas in groups”;

Chengdu, SichuanThe maximum reward was 5 million yuan, providing “real money” support for the high-quality development of cross-border e-commerce;

Zhejiang HangzhouEncourage cross-border e-commerce enterprises, strengthen intellectual property protection, etc.

Agency: The sector is expected to maintain a high level of prosperity

According to Guotai Junan's latest research report,The “Opinion” further confirms the government's continued support for cross-border e-commerce and overseas warehouse construction. This policy is in line with previous measures, showing that support for the industry is constantly being strengthened.

As a “front warehouse”, overseas warehouses localize cross-border e-commerce logistics services such as delivery, returns, etc., to improve transportation time and ensure a stable user experience. Overseas warehouses are also important overseas nodes for cross-border e-commerce.It is a new type of foreign trade infrastructure, and it is also an important platform to drive the growth of foreign trade and achieve high-quality development.

According to industry data, the cross-border e-commerce sector showed impressive results in the first quarter. Net profit without return to mother increased significantly year-on-year. Combined with export trade demand-side data, sales of US apparel products continued to grow year on year in March. Recently, it is recommended to continue to pay attention to cross-border e-commerce companies that account for a high share of US sales. Furthermore, in terms of domestic retail, the “618” shopping festival is approaching, and short-term recommendations are to focus on sales of various domestic e-commerce platforms.

Shen Wan Hongyuan believes thatIn 2024, the cross-border e-commerce sector is expected to maintain a high level of prosperity as overseas online penetration rates increase and companies' products and marketing continue to grow.

Additional concept stocks:

Small Commodity City(600415): Actively build an overseas warehouse trade hub network, and focus on building trade fulfillment services supported by overseas warehousing control and financial services. The company has a total of 144 overseas warehouses with an area of over 1.1 million meters”, covering 47 countries around the world, and initially formed 5 major warehouse clusters in America, Asia, Europe, Africa and Oceania.

Lego Co., Ltd. (300729): The company is deeply involved in the European and American markets, and its main business includes furniture manufacturing and overseas warehouse business. As of 2023, the company has 12 self-operated overseas warehouses around the world, with an area of 289,600 square meters. Expansion was accelerated in the first quarter of 2024. Currently, it has 13 self-operated overseas warehouses around the world, with a total area of 362,400 square meters.

Oriental Jiasheng (002889): The company attaches importance to the strategic role of overseas warehouses as an important overseas node for cross-border e-commerce and lays them out in advance. Currently, it has provided reverse logistics services for warehousing and returns in the three countries of the United Kingdom, Germany, and the US to solve the worries of secondary sales for customers. The UK warehouse has developed a visual service for the delivery of oversized items, which is popular among customers selling large items. In the future, the company will keep up with market demand and national policy support, increase the coverage of international routes and overseas warehouses, lay out the core area of global cross-border e-commerce, actively enhance its overseas customs clearance and warehousing integration service capabilities, enhance overseas distribution and delivery capabilities, and consolidate the company's competitive advantage in going overseas.

The Saivi Era (301381): Relying on overseas warehouses and domestic warehouses in Europe and North America, we have established a complete warehousing and logistics system. The maximum daily order processing capacity of domestic warehouses exceeds 120,000 orders. In terms of overseas warehouses, the largest daily order processing capacity of European warehouses, US East warehouses, and US West warehouses exceeded 9.500 orders, 19,000 orders, and 20,000 orders, respectively.

Henglin Co., Ltd. (603661): It has an early layout in the overseas warehouse business and has a certain rent cost advantage. Since the beginning of the cross-border business, the company has built its own overseas warehouses, and is operated by a professional team. Currently, Henglin Co., Ltd. has 4 main overseas warehouses in North America, which are located in California, New Jersey, Atlanta and Texas. The layout of these overseas warehouses helps the company reduce the cost of cross-border e-commerce business and improve operational efficiency.