Matters:

The company announced that in the first half of the year 24, it achieved operating income of 6.77 billion yuan, a year-on-year increase of 31.1%, achieved net profit of 1.45 billion yuan, a year-on-year decrease of 27.5%; achieved an investment income of 0.11 billion yuan, a net profit of 1.34 billion yuan after excluding investment income, an increase of 38.9% over the previous year. In the second quarter of a single quarter, we achieved operating income of 4.09 billion yuan, a year-on-year increase of 34.4%, and achieved net profit of 0.73 billion yuan, a year-on-year decrease of 5.3%; realized investment income of 0.066 billion yuan, and net profit to mother of 0.67 billion yuan after excluding investment income, an increase of 28.8% over the previous year.

Commentary:

The Yiwu market is booming, industrial clusters are rich, and the construction of a global digital trade center is progressing steadily. In the first half of 2024, Yiwu's total import and export value was 324.77 billion yuan, up 20.7% year on year; of these, exports were 288.03 billion yuan, up 21.3% year on year. During the reporting period, the average daily passenger traffic in the Yiwu market was 0.2188 million, and the average daily number of foreign investors exceeded 3,600, an increase of more than 80% over the previous year. The main passenger traffic indicators of the market all exceeded the same period in 2019. As of the first half of the year, 62% of the first phase of the Global Digital Trade Center project had been completed, and the main structure of the commercial office sector had completed about 68%. The construction of the new market was in an orderly manner. It is expected to bring significant revenue and profit contributions to the company in the future.

Chinagoods launches new AI service products, which are deeply tied to membership services. The Chinagoods platform teamed up with Tsinghua, iFLYTEK, Baidu and other teams to build a 100-person AI R&D team to launch 5 self-developed AI products for the characteristics of the Yiwu market, covering functions such as intelligent translation, video generation, and product launch. Currently, 0.017 million users on the Chinagoods platform have experienced the Xiaoshang AI series products in depth, and the business has been digitally upgraded. During the reporting period, big data companies achieved net profit of 72.794 million yuan, a year-on-year increase of 56.9%, and Chinagoods GMV achieved 45 billion yuan, an increase of 40.6% year-on-year.

Yiwu PAY provides reliable guarantees for merchants to go overseas, and the parent company realizes profits. In the first half of 2024, the company's cross-border RMB payment business transaction volume exceeded 12 billion yuan, and the transactions covered more than 150 countries and regions. None of the transactions involved a single risk dispute or card freeze incident, providing a reliable guarantee for merchants to go overseas. As of the first half of 2024, Express achieved net profit of 27.381 million yuan, compared to -5.72 million yuan in the same period last year, making a successful profit.

Investment advice: We are firmly optimistic about the stability of the company's main business. With the steady implementation of global digital trade centers and the profit correction of new businesses, future business performance is expected to improve further. Considering the impact of investment income on the profit statement, net profit due to mother for 24-26 was slightly adjusted to be 2.89/3.47/4.98 billion yuan (previous value 2.83/3.47/4.98 billion yuan in 24-26 years), maintaining the original valuation assumption. The target market value was 46.3 billion yuan, corresponding to a target price of 8.4 yuan/share, maintaining the “strong push” rating.

Risk warning: macroeconomic fluctuations, new business exhibitions fall short of expectations, industry competition intensifies