Competition among e-commerce platforms has intensified, and the value of proxy operations coexists with pressure. With the upgrading of consumer scenarios, live e-commerce is developing rapidly through the “goods to find people” method of intuitively displaying products and enhancing interaction. Traditional e-commerce is relatively under pressure, and product and brand operation capabilities have become the focus of brand launch strategies; for smaller brands, agency operators have professional advantages such as consumer insight, e-commerce platform trends, and upstream and downstream links to the industry, which can maximize the use of traffic to help the company build its own brand; at the same time, increasingly mature brand demand continues to be refined. At the same time, the trend towards private traffic development and agency operations has also ushered in new opportunities and challenges; the company is leading in integrated e-commerce Service providers adjust layout strategies in a timely manner, extending from special operations to co-creation with brand value.

The business structure has been adjusted, and profitability has declined. In the first three quarters of 2023, the company's revenue fell 11.95% from the same period, mainly due to the announcement of the subsidiary “Zhejiang Shangbai” at the beginning of the year; currently, the company's newly accepted business is still in a growth period. The company's gross margin for the first three quarters fell 4.86pcts to 30.54% year on year. In terms of cost, the company's marketing competition investment was large, and the sales/management/R&D expenses rate was 11.65%/6.99%/1.40%, respectively, +1.50pcts/+0.36pcts/-1.42pcts; in addition, headquarters building amortization increased, and some projects Seek innovative cooperation to increase expenses. The company's net profit margin was 12.73%, -3.07pcts year-on-year.

Fine operation+cooperation expands two-wheel drive to create a global e-commerce service benchmark. The company actively responds to market changes and continues to add new cooperative brands such as JB, Illy Coffee, and Beijieli; built independent Tmall, JD, Douyin and private domain divisions to use IT technology to dehumanize traffic procurement and promote more efficient traffic transformation; high-quality cases form a digital inflow library, and the system can be translated into a stream of information that can be accessed in product categories to strengthen competitive advantage; in August, the company accurately understood policy scales and platform trends, and continued to create segmented products with integrated service capabilities; in August, the company continued to create segmented products. Tmall Taobao” “Six-star service provider”. In the future, the company will also continue to actively expand its business through the two-wheel drive of a “global e-commerce service provider” and a “new consumer goods accelerator”, and revenue is expected to grow.

Investment advice: Lower the profit forecast. The company's 2023-2025 EPS is expected to be 0.59/0.72/0.83 yuan, corresponding to the latest PE, 41.8/34.4/29.7 times, respectively, giving it an “increase in holdings” rating.

Risk warning: industry competition intensifies; brand cooperation falls short of expectations; digital upgrade falls short of expectations.