Introduction to this report:

Net profit from Q3 surged 177%, better than previously anticipated; offline volumes and prices have risen sharply, and online growth continues to be high, and we are optimistic about future growth.

Key points of investment:

Maintain an increase in holdings. Maintain the forecast that the company's EPS will be 0.51/0.58/0.73 yuan in 2024-26, with a growth rate of 5/14/ 25%; referring to the company's PE valuation, the company was given 29 times PE, and the target price was raised to 14.79 yuan (originally 11.46 yuan) to maintain the increase in wealth.

Summary of the three quarterly reports: 1) Revenue for the first three quarters: 10.61 billion yuan/ +34.3%, net profit of 2.33 billion yuan/ +0.5%, after deducting investment income; 2) Q3 single-quarter revenue of 3.85 billion yuan/ +40.2%, net profit of 0.881 billion yuan/ +177%, after deducting investment income; 3) Trade Services core data: CG platform GMV surpasses 60.8 billion yuan (annual target of 80 billion yuan), an increase of more than 16%; Yifay's new cross-border payment business transaction volume exceeded 20 billion yuan, an increase of more than 770%. We estimate that Q3 will accelerate by about 8 billion yuan month-on-month and expect to exceed the previous target for the whole year; 4) gross profit margin 32% /+4.9pct, net interest rate 19.6% /+4pct after deducting investment income; 5) Net operating cash flow 0.453 billion yuan/ +21.5%.

Benefiting from Yiwu's strong export boom, cross-border payments and data elements have added support for development. 1) In January-August, Yiwu's total import and export value is 444.06 billion yuan/ +17.2%, of which exports are 393.58 billion yuan/ +17.2%, and imports are 50.48 billion yuan/ +17.3%; market procurement exports are 316.33 billion yuan/ +21.8%, accounting for 80.4% of Yiwu's total export value, driving Yiwu's export growth by 16.8 pcts; 2) The cross-border payment system between China and ASEAN is expected to continue to advance, and the BRICS countries have already been able to promote a new payment system; the company's voluntary payment system has been obtained Cross-border payment+cross-border foreign exchange qualifications, and the high proportion of the Belt and Road business can benefit first; 3) Recently, the Central Office of the Central People's Republic of China and the State Administration issued “Opinions on Accelerating the Development and Utilization of Public Data Resources”, hoping to accelerate the development of data element resources; the company's CG platform brings together data elements in the export chain and has high commercial monetization value.

New markets, new platforms, and new models, looking forward to a long future. 1) New market: The main body of the global digital trade center market block peaked in June and the office block peaked in September; we believe it will improve the Yiwu market industry chain and strengthen the agglomeration effect of the offline market. Starting in 2025, it will further increase income such as rent, and more increases can also be expected; 2) New platform: the CG platform has opened up a full chain of trade scenarios since the revision, and the capacity and level of value-added services are rapidly improving, and I am optimistic that revenue and profit growth will be implemented at an accelerated pace; 3) New model: Gathering and cultivating new industries as an important focus point for the iterative transition of the Yiwu market, through industrial belt linkage+business association Connect+ support exhibitions and other methods to explore new quality productivity and build a world-class comprehensive international trade service provider.

Risk warning: new business, new markets falling short of expectations, international trade risks, increased competition, etc.