The “Olympic economy” boosted, and Yiwu's foreign trade maintained a high boom. Yiwu Customs data shows that from January to May 2024, Yiwu's total import and export value reached 264.50 billion yuan, up 22.0% year on year, including exports of 234.04 billion yuan, up 21.9% year on year. On a monthly basis, the export volume in May reached 57.66 billion yuan, an increase of 28.7% over the previous year, accounting for 2.69% of the country's total export value. This year's Olympic boom has driven Yiwu's exports of flags, pendants, and other sporting goods and equipment. From January to May, Yiwu exported 4.10 billion yuan of sporting goods and equipment, an increase of 44.4% over the previous year.

The business has blossomed more, and the main business profit is expected to increase. 1) Yiwu Pay: From January to April, the new cross-border RMB business transaction volume exceeded 8.5 billion yuan, almost achieving the full transaction volume of last year. The net profit of the payment company in 2023 was 16.2928 million yuan, and the transaction volume increased rapidly in 2024, which is expected to contribute more to performance. 2) Zhijie Yuangang: Affected by strong export demand and Red Sea detours, container freight rates have recently risen sharply. Starting in March 2023, Zhijie Yuangang and Maersk have cooperated. Over a period of more than a year, the shipment volume has increased from the initial 30 TEU to 600 TEU per month. The scope of cooperation covers many routes in South America, North America, the Mediterranean and other regions. It is expected that the number of routes, customers and cargo volume will continue to grow rapidly this year. 3) Market operation: Since 2023, the company has promoted rent increases, combined with new market expansion. Currently, the company's market business is in a phase of sharp rise in volume and price, while the revitalization of the old business position continues; 4) Data asset application: This year, the company's mutual fund company and the Yiwu Branch of the Industrial and Commercial Bank of China provided zero-collateral and unguaranteed digital asset credit loans to market merchants based on foreign trade data assets, achieving the first data asset loan. At the same time, other data products such as the Yiwu Index are currently being iterated.

Investment suggestions: Improve the quality of the company's profits, revitalize and explore old markets, expand new markets, and implement new trade contracts to jointly drive subsequent growth, and the transformation logic continues to be implemented. We expect 2024-2026 net profit of 27.5/28.2/3.94 billion yuan, corresponding to PE 16.2/15.8/11.3X, to maintain the “gain” rating.

Risk warning: Chinagoods platform development falls short of expectations; payment business progress falls short of expectations; new business-related talent reserves fall short of expectations; Yiwu market policy advantages reduce risk.