Summary of Conference Call Notes on Xiaogoods City Company Overview - Xiaogoods City is a market developer and manager located in Yiwu, with over 6 million square meters of space and more than 60,000 shops, attracting over 200,000 visitors daily. The company aims to build a shared trade service platform for global SMEs, positioning itself as a "world-class international trade comprehensive service provider" [10][21]. Key Points and Arguments Leadership and Management - The new chairman, Mr. Chen Dezhan, participated in a roadshow in Hong Kong on his first day, indicating a proactive approach to leadership [1]. - The management team is stable, and there are plans to enhance the fixed rental income annually due to a significant price difference between primary and secondary markets [1][2]. Market Development and Growth - The company is actively developing the 7th and 8th district markets, with a focus on securing approval for the core 1039 market procurement business in Yiwu, expected by mid-August [1]. - The company anticipates annual performance growth of no less than 30% over the next three years [1]. Financial Performance and Dividends - The board has set clear revenue and net profit targets, with a dividend payout ratio expected to increase from 60% to 65% this year, and further increases planned in the future [3]. - The logistics and payment business is expected to contribute double-digit profit margins within the next 3-5 years [3]. Rental and Leasing Strategy - The third batch of leasing for the 6th district market has commenced, targeting various sectors including fashion, children's products, health care, and AI equipment [2]. - The company has secured approximately 130,000 square meters of land for future development, ensuring rental income for the next 9-10 years [2]. Valuation and Investment Rating - The target price is set at RMB 21.64, with a current trading PE of 21x for 2026E and a projected EPS CAGR of 30% from 2025 to 2027 [4]. - The company is rated as a "Buy," with potential catalysts including the confirmation of commercial area launch dates for the 7th and 8th districts and obtaining import qualifications for cosmetics or health products [4]. Financial Projections - Revenue projections show significant growth from RMB 7.62 billion in 2022 to RMB 20.15 billion in 2025E, with net profit expected to rise from RMB 1.1 billion to RMB 3.93 billion in the same period [7]. - The company aims for a net debt to EBITDA ratio that remains manageable, with a projected net cash position by 2025E [7]. Additional Important Information - The company is focusing on enhancing its trade service business, with expectations to charge 3-5% of GMV in its import business [3]. - Risks include potential macroeconomic downturns affecting foot traffic and GMV growth, lower-than-expected rental increases, and increased competition in cross-border e-commerce and payment services [11]. This summary encapsulates the key insights from the conference call, highlighting the strategic direction, financial outlook, and potential risks associated with Xiaogoods City.