Investment Rating - The investment rating for the company is "Hold" [6] Core Views - The company achieved steady growth in H1 2025, with revenue of 7.713 billion and a year-on-year increase of 13.99%, while net profit attributable to the parent company reached 1.691 billion, up 16.78% [1] - The trade service segment has become a core driver of profit growth, with revenue of 531 million, a 43.2% increase, and a profit total of 302 million, surging 127% year-on-year [2] - The global digital trade center's successful招商 (招商 refers to the process of attracting businesses) indicates a new growth cycle, with high demand for commercial spaces and significant bidding prices [3] - The company's digital transformation strategy, empowered by AI, has created a closed-loop ecosystem that enhances user engagement and operational efficiency [3] Summary by Sections Financial Performance - In H1 2025, the company reported revenue of 7.713 billion, a 13.99% increase year-on-year, and a net profit of 1.691 billion, reflecting a 16.78% growth [1] - Q2 2025 saw a revenue of 4.552 billion, with a year-on-year growth of 11.41%, and a net profit of 888 million, up 20.77% [1] Business Segments - The trade service segment's revenue reached 531 million, marking a 43.2% increase, and its profit total surged 127% to 302 million [2] - The Chinagoods platform achieved a net profit of 155 million, a 109.69% increase, while Yiwu Pay's profit exceeded 40 million, growing over 50% [2] Market Outlook - The招商 for the global digital trade center has attracted over 47,000 entities for the first batch and over 24,000 for the second batch, indicating strong market demand [3] - The bidding prices for commercial spaces reached 11-12.4 million per square meter for the first batch and up to 13.8 million for the second batch, highlighting the high value of the Yiwu market [3] Strategic Initiatives - The company has successfully implemented a digital and intelligent transformation strategy, creating a closed-loop ecosystem that integrates information flow, business flow, and capital flow [3] - The Chinagoods platform has registered over 5.1 million buyers, and the "Small Business AI" applications have surpassed 1 billion uses, significantly enhancing user retention [3] Investment Projections - The company is expected to achieve net profits of 4.1 billion, 5.5 billion, and 6.3 billion for the years 2025, 2026, and 2027 respectively, with corresponding PE ratios of 27x, 20x, and 18x [4]

Core Viewpoint - The article discusses the limited adoption of stablecoins in Yiwu's cross-border trade, despite claims of significant on-chain circulation. It highlights the reliance on traditional payment methods and the skepticism surrounding the reported figures. Group 1: Stablecoin Adoption in Yiwu - Reports suggest that stablecoin transactions in Yiwu have exceeded $10 billion since 2023, but the data's reliability is questioned due to the lack of verifiable sources from Chainalysis [1][3] - Many Yiwu traders and exporters express unfamiliarity with stablecoins, preferring traditional payment methods like telegraphic transfers and letters of credit [1][2][4] - The actual cross-border payment volume through the Yiwu Pay platform is approximately 5.65 billion yuan (around $780 million), indicating that stablecoin usage is still marginal [4] Group 2: Challenges and Limitations of Stablecoins - Stablecoins are perceived as potentially lowering transaction costs and increasing payment speed, but their practical benefits may be overstated [6][7] - The total costs associated with stablecoin transactions can approach 0.8% to 1%, factoring in various fees and compliance costs, which diminishes their appeal [7] - Key barriers to stablecoin adoption include the lack of export tax benefits, the need for formal banking documentation for loans, and concerns over account freezes due to fund movements [7][8] Group 3: Traditional Payment Methods - The primary payment methods in Yiwu's foreign trade remain telegraphic transfers and letters of credit, which are favored for their reliability and established processes [9][10] - Many exporters maintain offshore bank accounts to manage currency exchange flexibly, further indicating a preference for traditional methods over stablecoins [10][11] - Despite the push for stablecoin adoption in Western markets, most transactions still occur in USD, with limited use of stablecoins among clients [11]

Investment Overview - The company plans to establish two wholly-owned subsidiaries in Hong Kong: Xunchi Hong Kong Limited with a registered capital of HKD 50 million and Xunchi Hong Kong Oriental Limited with a registered capital of HKD 10 million [1][2] - The investment aims to leverage Hong Kong's financial ecosystem to enhance cross-border financial services for small and micro enterprises, thereby improving the competitiveness of the company's payment services [1][2] Approval and Compliance - The investment does not require approval from the board of directors or shareholders as per relevant regulations [2] - The establishment of the subsidiaries does not constitute a related party transaction or a major asset restructuring as defined by the Shanghai Stock Exchange [2] Impact on the Company - This investment is a significant step in the company's strategy to deepen digital trade reform and build a global trade comprehensive service provider [3] - The Yiwu Pay platform will enhance its cross-border financial service capabilities, providing compliant fund custody and guarantee payment services, addressing trust issues in transactions [3] - The investment aligns with the company's global development strategy, aiming to provide integrated financial solutions for small and micro enterprises globally, thus creating greater value for clients and driving company growth [3] Risk Considerations - The establishment of the subsidiaries and the application for the TCSP license are subject to government approval, which carries uncertainty [4] - The future operations may face uncertainties due to macroeconomic changes, industry policy shifts, market demand fluctuations, and intensified competition [4]

Core Viewpoint - The company aims to transition from a payment tool to a comprehensive financial service platform by establishing subsidiaries in Hong Kong and obtaining a TCSP license, enhancing its service offerings and value-added services [2][3]. Group 1: Strategic Intent - The company’s "Yiwu Pay" has a strong foundation in cross-border payments, with expected cross-border receipts exceeding $4 billion in 2024, a 233% year-on-year increase [2]. - The TCSP license will allow the company to expand into high-end services such as trust, company secretarial services, and fund custody, transforming "Yiwu Pay" into a "payment + financial solutions" platform [2]. - Hong Kong's status as an international financial center provides a critical platform for the company to offer integrated cross-border trade financial services to SMEs globally [2]. Group 2: Industry Background - Since 2018, Hong Kong requires companies providing trust and corporate services to hold a TCSP license, enhancing legal compliance and market competitiveness [3]. - The company could become one of the few Chinese enterprises with both physical trade and financial licenses, creating a differentiated advantage [3]. - With 90% of global enterprises being SMEs, the company aims to provide low-cost settlement and supply chain finance services to a vast market, leveraging its resources in Yiwu [3]. Group 3: Potential Impact - The TCSP license application involves a rigorous review process, which may take several months and carries a risk of failure [4]. - The company faces competition from established financial institutions in Hong Kong, necessitating differentiation in service offerings and technological capabilities [4]. - If successful in expanding into trust and wealth management, the company's gross margin could increase from single digits to over 15% [4]. - The Hong Kong subsidiaries could serve as a springboard for expanding services into emerging markets, enhancing the global service network of "Yiwu Pay" [4]. Group 4: Conclusion - The company's move represents a typical case of a physical trade giant penetrating the fintech sector, aiming to convert offline advantages into online financial service capabilities [7]. - While there are short-term uncertainties regarding the license application and business integration, long-term success could position the company as a global benchmark for cross-border SME services [7].

Group 1: Shareholding Increase Plan - The controlling shareholder, Yiwu China Commodity City Holdings Co., Ltd., plans to increase its stake in Zhejiang China Commodity City Group Co., Ltd. with a total investment of no less than RMB 5 billion and no more than RMB 10 billion within 12 months starting from April 9, 2025 [1][2] - As of April 11, 2025, the controlling shareholder has already acquired 6.9 million A-shares, representing a 0.13% increase, with a transaction amount of RMB 98.69 million [2] - On June 18, 2025, an additional 10.23 million A-shares were purchased, representing a 0.19% increase, with a transaction amount of RMB 199.84 million [2] Group 2: Investment in Hong Kong Subsidiary - The company plans to establish a wholly-owned subsidiary in Hong Kong, named Xunchi Hong Kong Limited, to enhance its cross-border financial service capabilities [7][8] - The registered capital for Xunchi Hong Kong Limited is set at HKD 50 million, while its subsidiary, Xunchi Hong Kong Oriental Limited, will have a registered capital of HKD 10 million [9][13] - This investment aligns with the company's strategy to deepen digital trade reform and enhance the competitiveness of its payment platform, Yiwu Pay, by providing comprehensive financial services [10][11]

Core Viewpoint - Despite escalating global geopolitical tensions and trade frictions, the Chinese economy demonstrates strong resilience, with Xiaogoods City (600415) gaining increasing investor attention as it leads the charge in expanding China's small commodity market overseas [1] Group 1: Company Performance - On June 3, Xiaogoods City’s stock price reached a high of 18.48 CNY per share, closing at 18.36 CNY, resulting in a market capitalization of 100.68 billion CNY, marking its return to the billion-dollar club after 10 years [1] - The last time Xiaogoods City had a market cap exceeding 100 billion CNY was in June 2015, during a bull market [1] Group 2: Market Dynamics - Yiwu, where Xiaogoods City is located, is the world's largest small commodity center, supporting over 20 industrial clusters and 2.1 million small and micro enterprises, attracting over 20,000 foreign merchants and nearly 9,000 foreign-funded entities [2] - In 2024, Yiwu International Trade City is expected to see an average daily foot traffic of 224,300 people, a 12.15% increase year-on-year, with foreign visitor numbers rising by 17.22% [2] Group 3: Trade Statistics - Yiwu achieved a total import and export value of 668.93 billion CNY in 2024, a year-on-year increase of 18.2%, with exports at 588.96 billion CNY (up 17.7%) and imports at 79.97 billion CNY (up 22.2%) [3] Group 4: Strategic Initiatives - Xiaogoods City has implemented various transformation and upgrade measures, positioning itself as a globally recognized international trade service provider, enhancing its ecosystem in digital trade, logistics, and cross-border payment [4] - The Chinagoods platform has launched several AI digital applications since October 2023, achieving over 1 billion cumulative usage and access, with active user order growth exceeding 20% [4] - Yiwu Pay has seen a 233% year-on-year increase in cross-border payment volume, reaching over 4 billion USD in 2024, with a global service network covering over 160 countries [4] Group 5: International Expansion - Xiaogoods City actively supports the Belt and Road Initiative, with 46 overseas projects in 20 countries, serving nearly 5,000 merchants [5] - The company has established a 1 billion CNY outbound industry fund in collaboration with national entities, aimed at facilitating foreign trade [5]