The company released its three-quarter report for 2024: in the first three quarters of 2024, the company achieved operating income of 5.728 billion yuan, +38.49% year over year; net profit to mother 0.278 billion yuan, -3.11% year over year; net profit after deducting 0.258 billion yuan, or -17.44% year over year. 2024Q3 achieved operating income of 2.007 billion yuan, +34.49% year over year; net profit to mother 0.106 billion yuan, +5.44% year over year; net profit after deduction of 98.79 million yuan, -1.46% year over year.

The company achieved rapid growth in operating income. 2024Q3 achieved revenue of 2.007 billion yuan, +34.49% year over year, mainly due to increased marketing efforts, the company developed new products smoothly and expanded sales scale.

Profitability is under pressure in the short term and is yet to be repaired. 2024Q1-3's net profit margin was 4.85%, year-on-year - 2.08pct; gross profit margin of 35.10%, year-on-year - 1.76pct. To a certain extent, the company's profitability will be affected by shipping prices. According to Wind's Baltic Dry Bulk Index (BDI): Season: Average, the average value of the 2024Q3 shipping index increased 57% year over year. Looking ahead, the company is expected to calm down the impact of shipping prices through long-term agreements and other methods. On the cost side, the 2024Q1-3 sales expense ratio, management fee rate, financial expense ratio, and R&D expense ratio were 24.67%, 3.63%, 0.52%, and 0.94%, respectively, compared with +1.77pct, -0.25pct, and -0.25pct, respectively. The increase in sales expenses was mainly due to the increase in the company's platform transaction fees and increased investment in marketing activities. The increase in the financial expense ratio was mainly due to the reduction in exchange income due to fluctuations in interest income and foreign exchange rates.

Profit forecast and rating: We expect the company's net profit to be 0.39, 0.494, and 0.591 billion yuan respectively, compared to -5.5%, +26.6%, and +19.7%, respectively. The current closing price corresponds to 20-16 times PE in 24-25. As a leading cross-border e-commerce enterprise for home and furniture, refer to comparable companies to give the company a PE valuation of 23 to 24 times in 2024, corresponding to a reasonable value range of 22.36 to 23.33 yuan, corresponding to 1.11 to 1.16 times 2024 PS estimates give it an “better than the market” rating.

Risk warning: International trade frictions have intensified, shipping prices have risen sharply, and market demand has fluctuated.