Matters:

Based on the Yiwu market, the company is mainly engaged in market management business. Its international trade city provides a series of supporting services such as rental and operation to a large number of foreign trade merchants, fully sharing the dividends of Yiwu's foreign trade boom. At the same time, in recent years, the company has built an online trade service platform Chinagoods, cross-border payment and settlement services, and logistics and warehousing services. Since last year, we have closely followed and interpreted the company's various business layouts. At present, the company's various businesses have gradually formed synergy, which is helping the company achieve transformation from a traditional rental store operation to an international integrated digital foreign trade service provider and unleash long-term growth potential. This article will also sort out and interpret this in further detail.

Guoxin retail's opinion: First, the Yiwu foreign trade market, which the company relies on, continues to be booming. Under the changing global trade environment since 2024, Yiwu's total import and export value in January-July was 379.1 billion yuan, up 18.1% year on year; of these, exports were 335.97 billion yuan, an increase of 18.5%; in this basic context, the company continued to explore new growth space through innovation and upgrading of traditional market operations and digital intelligence business empowerment. 1) Traditional market operations enhance transaction activity and service levels through digital transformation, thereby driving performance growth through reasonable rent increases. In addition, the construction of the Global Digital Trade Center project with a total construction area of 1.25 million square meters is progressing steadily. The main phase of the project market segment (0.41 million square meters) has reached its peak and is expected to be put into trial operation in October 2025, driving the overall main business into a new round of expansion cycle. 2) The online trading platform Chinagoods integrates foreign trade services and online shopping mall functions to provide performance increases through membership fees, service fees, etc. 3) Cross-border payment services conform to the trend of RMB internationalization, solve the core pain points and bottlenecks of foreign trade merchants in the field of cross-border remittance settlement, and win business volume growth through efficient capital flow efficiency. 4) Relying on the subsidiary Zhijie Yuangang to carry out trade fulfillment services, including cross-border logistics, overseas warehouses, etc., to further build a closed loop trade ecosystem.

Overall, the fundamental growth logic based on the company's unique business model has the characteristics of both offense and defense in the current market environment. We maintain the company's 2024-2026 net profit forecast of 2.706/3.187/4.063 billion yuan respectively, corresponding to PE of 16.4/13.9/10.9 times, respectively, maintaining a “superior to the market” rating.

Commentary:

Looking at the company's overall investment logic, the company relies on the Yiwu foreign trade market, which continues to be booming. It has received strong policy and industrial support, has a perfect foreign trade export industry chain, and enjoys a high level of international popularity, and is irreplaceable. On this basis, the first is the market operation business, which is the main source of the company's core performance, which currently has both stability and growth: reasonable rent increases and trial operation of the Global Digital Trade Center in October 2025 are being carried out under the company's improved service capacity, driving performance into a new period of expansion. Second, in recent years, the company has opened up new growth points through digital intelligence innovation: Chinagoods online trade service platform, cross-border payment Yiwu Pay and other business expansion, and has built a closed loop system for the global trade ecosystem. Under overall trade digitalization, the integration of data flow+capital flow data will also help the company to more accurately grasp the image of foreign trade merchants and provide more value-added service services and monetization of data element businesses in the future. We believe that the company's unique business model has the characteristics of both offense and defense in the current market environment.

Investment advice: The main business is expected to enter a period of performance expansion. Multiple businesses are expected to collaborate to build an international comprehensive digital foreign trade service provider company. With the support of the continuing boom in the Yiwu foreign trade market, the first core market business is expected to enter a new period of performance expansion with the support of reasonable rent increases in the future and the commissioning of global digital trade centers. Second, in recent years, the company has built a closed-loop trade ecosystem system through business expansion such as the Chinagoods online trading platform and Yiwu Pay. The integration of data flow+capital flow data also helps the company to more accurately grasp the image of foreign trade merchants and provide more value-added service services in the future. Overall, we believe that the company's unique business model has both offensive and defensive characteristics in the current market environment. We maintained the company's net profit forecast for 2024-2026 at 2.706/3.187/4.063 billion yuan, respectively, corresponding PE of 16.4/13.9/10.9 times, respectively, and maintained the “superior to the market” rating.

Risk warning

Yiwu's foreign trade export boom declined; global digital trade center construction fell short of expectations; store occupancy rates fell short of expectations; payment transaction flows fell short of expectations or financial compliance risks occurred.