Huitongda is a business-to-business (B2B) retail platform, offering direct sales of products and software as a service (SaaS) to retail stores in China’s lower-tier market.
Over the years, it has gradually built its business model and supply chain in the lower tier market – we believe to specifically cater to the local stores’ demand.
Frost & Sullivan forecasts 6.5% 2020-25F CAGR for China’s lower tier market to Rmb20.4tr. We see huge growth potential for Huitongda in this fragmented market.
We expect Huitongda to post 11% sales and 33% net profit CAGR over 2022-25F, as its number of member stores continues to rise.
Initiate coverage with an Add rating and DCF-based TP of HK$37.6.
Huitongda (09878)：Empowering China's lower-tier retail market
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