Guoxin Securities: Maintaining the Shell-W (02423) “superior to the market” rating, and anticipates that profits will rise significantly in the fourth quarter

The Zhitong Finance App learned that Guoxin Securities released a research report stating that it maintains the Seashell-W (02423) “superior to the market” rating and maintains the previous profit forecast. The company's adjusted net profit for 2024-2025 is expected to be 90/9.2 billion yuan, respectively, and earnings per share are 2.50/2.54 yuan, respectively. Affected by the pace of the policy, the company's revenue and profit declined sequentially in the third quarter, but it is expected to pick up significantly in the fourth quarter.

Guoxin Securities's main views are as follows:

Q3 revenue growth declined month-on-month, while profit declined month-on-month.

On the revenue side, 2024Q3, the company achieved total GTV transactions of 736.8 billion yuan, +12% year over month, and operating revenue of 22.6 billion yuan, +27% year over month, and -3% month on month. On the profit side, 2024Q3, the company achieved adjusted net profit of 1.8 billion yuan, -17% year-on-year, and -34% month-on-month; adjusted net profit margin of 7.9% and gross profit margin of 23%, all falling year-on-month.

The stock housing business performance is in line with the pace of real estate policy. Q3 fell month-on-month in Q2, but it is anticipated that Q4 will pick up significantly.

2024Q3, GTV of the company's stock housing business was 477.8 billion yuan, +9% year over month, -16% month over month; revenue was 6.2 billion yuan, -1% year over month, -15% month on month. 2024Q2, the monetization rate of the company's stock housing business was 1.30%. On the one hand, the year-on-year decline was due to structural factors, and on the other hand, Chainjia lowered the stock housing commission rate in Beijing in September 2023, and the base effect will subside; the stock housing business contributed 41.0% to the profit margin, which decreased month-on-month, mainly due to an increase in the number of Chainjia agents and improved employee benefits.

The market share and monetization rate of the new housing business continue to rise.

2024Q3, the company's new housing business achieved total GTV transactions of 227.6 billion yuan, +18, -3% month-on-month, GTV market share 12.0%, an increase of 1.7 percentage points over Q2; revenue from the new housing business was 7.7 billion yuan, +31% year-on-month, and -3% month-on-month. 2024Q3, the company's monetization rate for new homes was 3.39%, another record high; contributing to profit margin of 24.8%, a slight decrease from month to month.

The new racetrack business has maintained a good growth momentum.

2024Q3, the share of GTV in the new track business increased to 4%, and the share of revenue increased to 38%. Among them, the home improvement and home furnishing business revenue was 4.2 billion yuan, +33% year-on-year, +4% month-on-month, monetization rate 103%, contributing 31% profit margin; housing rental service revenue was 3.9 billion yuan, +118% year-on-year, and +24% month-on-month, contributing 4.4% profit margin.

Risk warning: If the housing industry fluctuates due to factors such as a slowdown in economic growth, a decline in residents' income expectations, policy relaxation falling short of expectations, and the impact of credit risk incidents on housing enterprises, the company's operations will be adversely affected.