Core views

In the first half of 2024, the company achieved revenue of 319 billion yuan, a year-on-year decrease of 16.8%, and realized a net profit of 1.2 billion yuan to mother, a year-on-year decrease of 37.7%. The decline in the company's performance was mainly due to: 1) in the first half of the year, due to macroeconomic effects, supply chain operating revenue of 263.6 billion yuan, a year-on-year decrease of 24.8%; 2) loss of calculated assets and credit impairment of 2.41 billion yuan, compared to 0.78 billion yuan in the same period last year; 3) loss of 0.95 billion yuan due to changes in the fair value of investment real estate, compared to 0.2 billion yuan in the same period last year. In the first half of the year, the company achieved sales volume of 76.4 billion yuan, a year-on-year decrease of 38.6%, a land acquisition amount of 44.3 billion yuan, and a land acquisition intensity of 58.0%. In the first half of the year, the volume of the company's supply chain operation business continued to grow. The volume of major commodities operated was nearly 105 million tons, with a year-on-year growth rate of nearly 9%. At the same time, the company continued to optimize the category structure. In the first half of the year, the export volume of the consumer goods industry was 0.54 billion US dollars, with a year-on-year growth rate of over 22%.

occurrences

The company released its 2024 mid-year report, achieving revenue of 319 billion yuan, a year-on-year decrease of 16.8%, and a net profit of 1.2 billion yuan to mother, a year-on-year decrease of 37.7%.

Brief review

The company's performance in the first half of the year was under pressure. In the first half of 2024, the company achieved revenue of 319 billion yuan, a year-on-year decrease of 16.8%, and realized a net profit of 1.2 billion yuan to mother, a year-on-year decrease of 37.7%.

The decline in the company's performance is mainly due to: 1) in the first half of 2024, due to macroeconomic effects, the supply chain operation business achieved revenue of 263.6 billion yuan, a year-on-year decrease of 24.8%; 2) loss of 2.41 billion yuan in asset and credit impairment losses, compared to 0.78 billion yuan in the same period last year; 3) loss of 0.95 billion yuan due to changes in the fair value of investment real estate, compared to 0.2 billion yuan in the same period last year.

The real estate business is deeply involved in high-energy cities, and the intensity of land acquisition remains high. In the first half of 2024, the company achieved sales volume of 76.4 billion yuan, a year-on-year decrease of 38.6%. The sales share in Tier 1 and 2 cities was close to 80%, and the company ranked in the top ten in 45 cities. In the first half of the year, the company acquired 17 plots of land, with a land acquisition amount of 44.3 billion yuan. Among them, Tier 1 and 2 cities accounted for 98%, and the intensity of land acquisition was 58.0%, the same as the same period last year. As of the end of June 2024, the company's land storage area was 20.86 million square meters, corresponding to a goods value of 333.1 billion yuan. The soil storage was abundant.

Supply chain operation business shipments are growing steadily, and the category structure is continuously optimized. In the first half of 2024, the company achieved a continuous increase in operating volume during the commodity price decline cycle. The operating volume of major commodities such as black, non-ferrous, and mineral products was nearly 105 million tons, with a year-on-year growth rate of nearly 9%. At the same time, the company continued to optimize the category structure and strengthen the consumer goods supply chain operation business layout. In the first half of the year, the consumer goods industry exported 0.54 billion US dollars, with a year-on-year growth rate of over 22%.

The profit forecast and target price were lowered, and the buying rating was maintained. We forecast the company's 2024-2026 EPS to be 1.38/1.69/2.15 yuan (the original forecast was 2.66/2.99/3.54 yuan). The company's real estate business is located in high-energy cities. Land acquisition remains strong, supply chain operation business shipments continue to grow, and the product structure is optimized to maintain purchase ratings. Refer to comparable company valuations, and the target price was lowered to 9.21 yuan.

Risk warning: 1) The business model of the company's supply chain operation business model is to charge a fixed fee based on product turnover and according to a certain percentage. Since 2022, commodity prices have declined, and the company's revenue scale and profitability may be impacted. The company is actively expanding the supply chain business categories and regions, but new categories and regions need to be cultivated, and the process is at risk. Furthermore, overseas business is an important component of the company's supply chain business. Currently, major overseas economies are facing recession, and the Russian-Ukrainian war has also brought geopolitical risks, all of which may have an impact on the company's business. 2) The company's real estate business segment is operated by two entities, C&D Real Estate and MediaTek Group. The MediaTek Group has a large inventory in third- and fourth-tier cities, which may drag down the company's sales. Furthermore, the current inflection point of real estate sales is present. Although C&D Real Estate is located in the core area of the core city and has achieved excellent sales results in the past, this does not represent the future.