The leading enterprises in China's bulk supply chain are in a period of rapid growth, and there is some room for reshaping

Recently, Guohai Securities released a research report stating that China's leading companies in the bulk supply chain are in a period of rapid growth and there is some room for reshaping. It is reported that this is the first time that Guohai Securities Research Report has covered the bulk supply chain industry and given a "recommended" rating. The domestic bulk supply chain market has a vast territory, and we are optimistic about the core logic of the sustained growth of the leading bulk supply chain. It is recommended to pay attention to Xiamen International Trade (600755. SH), Zhongda (600704. SH), Xiangyu (600057. SH), Zhejiang Zhongtuo (000906. SZ), etc.

The main viewpoints of Guohai Securities are as follows:

The main trading products of bulk supply chain companies can be divided into three categories: energy, finance, and agricultural products. As a discoverer of value, companies place greater emphasis on certain categories and participate more in their industry chain, which have characteristics such as large-scale, high value, and multiple products.

From the perspective of business models, the trade models of bulk supply chain companies can be roughly divided into two types: self operation and agency, with the key links being procurement and sales. Simply put, agency buying and selling and self operated trade respectively bring service fee income and price difference income to the enterprise. But in actual business, there is actually no strict division of business.

Business model: The bulk commodity supply chain belongs to a typical light asset, low profit, and high turnover industry.

Its profit model is arbitrage through space, time and form in the continuous purchase and sales. The profit level is low and the Profit margin is about 0-5%. However, through rapid turnover and financial leverage, a decent return on net assets can still be achieved, with ROE reaching 15% or more in non bullish markets.

The core assets of the industry are the purchasing and sales channels that rely on people, as well as the logistics support and risk control system that rely on the company. These three have a certain scale effect, but are relatively weak. Therefore, it is equally important for companies to forge ahead, and latecomers can achieve rapid overtaking through their own efforts under the opportunities of the times.

Financial model: Static view of categories and patterns, dynamic view of commodity cycles.

① From a static perspective, the company's main categories determine the upper limit of its revenue scale. Categories can be expanded horizontally, but not completely without boundaries. Based on experience, the upper limit of scale from large to small is: energy, minerals, and food; The operating model of a company determines the volatility of its return rate. Companies with heavy assets tend to have higher profit margins and higher peak returns, but the volatility is significant; Companies with light assets have relatively low profit margins, but higher turnover efficiency and more stable returns.

② Dynamic observation: The cyclical fluctuations of commodities will slightly affect the company's profitability, and during the rapid upward period of commodity prices, the company's performance often performs better.

We are optimistic that the performance of China's leading enterprises will maintain medium to high growth rates.

① Industry expansion: domestic bulk supply chain companies are asset light supply chain companies that take Chinese demand (domestic trade or "the Belt and Road" trade) as the absolute Political base; As a global manufacturing factory, China has provided sufficient development space for the development of bulk commodity supply chain companies. At present, the market space is about 40-50 trillion yuan, and is expected to continue to be driven by economic growth and the the Belt and Road Initiative

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The article is sourced from the Internet of Things

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