HUITONGDA NET (09878): Lead in the 20 trillion yuan market, driving high-quality development in multiple dimensions.

- This year, "new quality productivity" has been the most frequently mentioned keyword in national policy documents. Accelerating the development of new quality productivity and opening up new economic growth paths has become a key performance indicator for governments across the country. In the face of a downward trend in consumption, the development of new quality productivity will accelerate the reshaping of the industry chain transformation in "urban-rural distribution". - According to statistics from the National Bureau of Statistics, in 2023, China had a total of 285,040 administrative villages, including residents' committees and villagers' committees, as well as 44,344 townships, which together accounted for over 70% of China's population. Relevant institutions forecast that by 2025, the scale of the sinking retail market will exceed 20 trillion yuan, four times that of first and second-tier cities, becoming an important driving force for constructing the "domestic cycle". - HUITONGDA NET (09878), the largest "urban-rural distribution" industry internet platform in China, has established a unique "two-end-one-way" business model, connecting over 246,000 township mom-and-pop shops, empowering industry upgrades in the sinking market. - Township mom-and-pop shops connect rural and urban areas and are the core entities in the "urban-rural distribution" of goods. HUITONGDA NET has the widest coverage and largest number of township mom-and-pop shops in China, with a vision of "improving farmers' lives", continuously growing and strengthening the industry by focusing on both the supply chain on one end and retail stores on the other, digitizing the entire process to empower industry upgrades. - Over the past six years, the company's business scale has continuously expanded, with revenue growing from less than 30 billion yuan in 2018 to 82.433 billion yuan in 2023, achieving a compound annual growth rate of 22.6%. Despite a downward trend in the consumption environment in 2024, the company has improved performance resilience through quality improvement and innovation, achieving a 0.5 percentage point increase in gross profit margin in the first half of the year, with operating cash flow continuously positive, exceeding 248 million yuan. - HUITONGDA NET earns money by building a unique "two-end-one-way" business model, forming a closed loop of services at both ends through transactions and services, earning profits from the supply chain of goods and digital empowerment service fees. - At the industry supply end, HUITONGDA NET focuses on empowering seven major industries, including household appliances, digital 3C, transportation, daily chemicals, agricultural materials, alcoholic beverages, and home furnishings, deepening cooperation with industry-leading brands such as Apple, Gree, BYD, and SAIC, as well as exploring new brand cooperation opportunities. At the retail end, the company continues to develop member stores, expanding the coverage and depth of township mom-and-pop shops in rural markets. By June 2024, the company had established a retail ecosystem covering 21 provinces and municipalities in China, with over 25,000 townships, more than 246,000 registered member retail stores, a 13.2% year-on-year increase, and over 92,000 active member retail stores, a 19.3% year-on-year increase. - HUITONGDA NET empowers industry supply and retail ends with comprehensive upgrades through channel and digital capabilities, creating a platform+member store model on the channel to build a multi-industry and end-to-end urban-rural distribution network and digital platforms including Qi Cheng retail cloud, Qi Cheng service cloud, Qi Cheng distribution cloud, and Qi Cheng retail cloud. This not only enhances user stickiness at both ends, but also attracts and continuously grows the scale of industry chain cooperation. - The full coverage of the industry supply chain and multiple retail touchpoints in township markets at the retail end, through the "transaction + service" model, continues to drive high-quality growth of HUITONGDA NET's performance. - In the transaction sector, the company has maintained double-digit growth in the scale of industry chain cooperation in recent years, with revenue from the transaction sector reaching 32.39 billion yuan in the first half of 2024, accounting for 98.6% of total operating income. In the service sector, by continuously upgrading service capabilities through SaaS+AI+four products, the revenue from the service sector achieved double-digit growth in the first half of the year, and the cumulative number of SaaS+ subscription users and paying users also maintained stable growth. - The strong performance of HUITONGDA NET in the past demonstrates the success of the "two-end-one-way" business model and also indicates the huge potential of the sinking market. The company is actively transforming its business model, exploring innovative scenarios, and developing high-value and high-profit business models in production, supply, and sales. - For example, the company has promoted independent brand projects and integrated production and sales projects, implemented a B2F model of demand-driven procurement, supply, and production, greatly improving the efficiency of the entire urban-rural supply chain. For example, in the independent brand projects, the "Altisha" air conditioner achieved mass production in the first half of this year, with orders exceeding 16,000 units in the first two weeks of launch, while the production and sales volume of the "Zhonghuida" intelligent manufacturing factory continues to increase. In addition, the company is also exploring overseas markets, opening up channels for international sales and has already received initial orders for Altisha from Central Asia and Southeast Asia. - HUITONGDA NET continues to innovate its business model around the "two-end-one-way" concept, building partnerships+own brands, multi-scenario+diverse models, domestic+overseas development models. This not only helps resist risks under the pressure of a downward consumption environment but also maintains performance resilience, exploring high-profit models to improve quality and efficiency, finding the best path to profitability, and ensuring its core position in the "urban-rural distribution". - In summary, new quality productivity is reshaping the industry chain transformation in urban-rural distribution. The township market has huge economic potential, releasing not only the push for economic growth but also the pressure of consumption reduction.The comprehensive revitalization of rural areas can also promote the overall development of new productive forces. HUITONGDA NET deeply cultivates industries and accumulates strength, relying on its leading position in the industry. Facing a blue ocean market worth 20 trillion yuan, even taking 1% market share in the future will generate 2000 billion yuan in revenue, with still doubling growth space compared to 2023.Traduce al ingls: