As the leader of the digital track of automobile circulation, Changchang shares have not escaped the strict scrutiny of the outside world since they rushed to the road to listing.
On March 28, Changjiu Co., Ltd. (06959.HK) released its 2023 financial report, with key data such as annual revenue, gross profit, gross profit margin, and adjusted net profit all hitting a record high, and the "debut" victory after listing.
According to the announcement, the company's revenue in 2023 will be 641 million yuan, an increase of 17.1% over 2022, gross profit will be 283 million yuan, an increase of 25.6% over 2022, gross profit margin will be 44%, an increase of 3 percentage points over the previous year, and adjusted net profit (adding one-time and non-cash expenses such as listing expenses to measure profitability more fairly and accurately) will be about 154 million yuan, an increase of 57% compared with the adjusted net profit of 98 million yuan in 2022.
What excites the market the most is that Changjiu shares have achieved the largest volume in the industry, and still achieved a high profit increase of 57%.
However, under the excellent results, the market is still worried: will the segmentation of the digital segmentation of automobile circulation lead to the narrowing of the market after the professional operation increases? Where will it go in the future? Will the profit be sustainable? Is the current beauty just a flash in the pan?
Dissecting the underlying logic of long-term shares, these problems will be easily solved.
01 17 years of deep cultivation, "small business" has become a forest
According to the results announcement, the 2023 full-year revenue, gross profit and adjusted net profit have all reached double-digit year-on-year growth, and the profit growth rate is higher than the revenue, which to a certain extent shows that Changchang shares have a healthy profit model and stable operation and management.
In terms of the composition of dismantling revenue, the automobile pledge supervision business is still the majority of the revenue, accounting for nearly 9 percent, with annual revenue reaching 575 million yuan, a year-on-year increase of 13.8%, followed by the innovative business launched in 2022 - automobile dealer operation management services, reaching 66.78 million, a year-on-year increase of 56%.
The automobile pledge supervision business is the trump card of long-term shares, with a market share of 47%, and its customers have gathered 6 major state-owned enterprises + 12 major joint-stock banks + 25 auto finance companies, covering more than 17,000 auto dealers (that is, 4S stores, a total of about 20,000 in the country), and it is a well-deserved industry leader.
The pledge supervision business is not only the cash cow of Changchang shares, which has increased steadily, but more importantly, its role as a "seed", which has brought endless imagination to Changchang shares, and a single tree can become a forest.
Founded in 2006, Changjiu Co., Ltd. has been deeply involved in the digital track of automobile circulation for 17 years, and has become the industry leader in the pledge supervision business, built the "cloud" digital information infrastructure that understands automobile circulation best, and precipitated exclusive and massive vehicle data, which can be combined with 17 years of accumulated industry depth and customer insight to build a data management, data analysis and business operation system for automobile marketing.
Similarly, AWS, an Amazon cloud computing company founded in 2006, started as an inconspicuous small business, but was called the "seed" of Amazon by its founder Bezos.
In 2006, AWS, Amazon's cloud computing company, was officially launched, and successively launched two iconic products that are considered to have opened the era of cloud computing, establishing the leading position of AWS in the industry.
Bezos said, "A lot of large companies often don't have the patience to cultivate small businesses, and Amazon needs to capture and nurture small businesses that start from seeds, which is a key point for future growth." ”
The same is true for long-term shares, and the pledge supervision was only a small business within the long-term group at the beginning, and now this "seed" has not only grown into a big tree that stands alone, but also naturally extends a series of growth points.
Since 2022, the scale effect of the traditional pledge supervision business has gradually emerged, and Changjiu has successively laid out the "overseas + supply chain" around new energy vehicles and the "operation management + data elements" business to "solve the dealer dilemma", and played a set of "combination punches" for the digitalization of automobile circulation.
02 Take the east wind of new energy vehicles "going to sea + sinking".
At present, China's auto industry, which is characterized by new energy vehicles, has two major trends: one is to go to sea, and the other is to sink, but they are facing their own pain points:
1) In terms of going overseas, with the acceleration of domestic auto brands, China has become the world's largest auto exporter, and the demand for auto finance in overseas markets is also increasing. However, the overseas financing model of "credit loans, no car pledge" is not in line with the risk control habits of domestic car companies, financial institutions and institutions, which is also one of the biggest pain points of Chinese automobiles going overseas.
2) In terms of sinking low-tier cities, different from the standardized paradigm gradually formed in first- and second-tier cities, the sinking market is a typical long-tail market, personalized and diversified, which is not suitable for car companies to build their own channels and operate in a top-down centralized manner, so channels and marketing have become the key winners and losers of new energy vehicles. There are 8-100,000 small and medium-sized car dealers in the county and township market, which are more likely to become the main force of new energy sinking than the 20,000 4S stores in the country, and are the future delivery and service nodes. The problem is that they need a car circulation platform that acts as an intermediary.
Correspondingly, the two innovative businesses of Changjiu came into being.
First, it launched the "Jiuche GO" automotive supply chain platform to empower the domestic sinking market and automobile circulation in the Belt and Road countries, providing auto dealers with one-stop services such as new and used car transaction matching, parts supply, logistics, finance, and delivery on the online side, and cooperating with a number of OEMs to jointly build a long-term new energy vehicle supermarket project on the offline side.
Subsequently, it strategically signed a contract with Metrobank Group, a Philippine financial giant, to expand its auto pledge supervision business to Southeast Asia, filling the gap in the overseas auto pledge market.
From the two dimensions of depth and extension, the industry leading effect, channel collaboration network and digital advantages of Changjiu shares are brought into full play. At the same time, the business territory has expanded to overseas and sinking markets, and the market scale has opened up several times, and the future can be expected.
03 Hold the dealer survival password: operation management + data elements
In recent years, dealers have not had a good time.
Online channels are replacing offline channels, and digital channels have penetrated into consumer decision-making.
Dealers urgently need to abandon the extensive marketing and sales model and turn to user-centered refined operations. To achieve this transformation, it is necessary to directly connect users online through rich operation tools on the B-side and C-side, improve the granularity of operations, reduce costs and increase efficiency.
While building a traffic operation system, car companies should optimize digital touchpoints, expand the influence of digital channels, and assume the role of "guide" for dealers' digital transformation.
Operation management + data elements are the two axes of Changjiu Co., Ltd. to empower the digital transformation of automobile circulation.
Since 2022, it has launched an innovative business for the digital transformation of 4S stores - auto dealer operation management services, including a complete and professional business operation management and control system, digital and intelligent management and control tools for the integration of industry and finance, and six sharing platforms including centralized procurement, finance, finance, human resources, legal affairs, and online development, covering all key links in the operation process of 4S stores in an all-round way.
In 2023, this part of the innovative business will begin to take shape, with revenue reaching 66.78 million, accounting for 10.4% of revenue, a year-on-year increase of 56%. As of December 31, 2023, there were 96 auto dealer customers, an increase of 28% compared to 2022.
Moreover, the charging model is based on a fixed rate from the total income of the dealer, so in addition to the increase in the number of customers, the revenue growth is also faster because the dealer's business situation has really been improved and enhanced after using the product for a long time.
In fact, in the issue of digital transformation of automobile circulation, the operation and management business is only a negligible potential of long-term shares, and the real gold mine lies in the data element.
In the first 10 years of its establishment, Changjiu Co., Ltd. benefited from the demand for pledge supervision business in the automobile circulation industry. In the next 6 years, driven by technology, we will lay out "intelligent platform + Internet of Things + big data" to cope with the industrial upgrading of the automotive industry. Since 2022, the industry has been changing, and under the catalysis of vehicle electrification and intelligence, dealers will have to undergo major changes, and data-driven has become a must.
The top layer of data elements is gradually clarified, and it is promoted from top to bottom and flourishes. Concepts such as "digital economy, data elements, and new quality productivity" have emerged one after another; data elements have been written into the 14th Five-Year Plan for the Development of the Digital Economy and 20 data articles have been released; the National Data Bureau has been established, and dozens of data exchanges have blossomed all over the country; data assets have been included in the table, and the "data element ×" action has been launched.
However, for the public, data elements are still in the clouds, which can neither be seen nor explained. Moreover, how can data elements be related to the long-term shares of the automotive industry chain?
Looking at the data card in the hands of Changjiu shares, the volume is not small, and it is the vehicle and user data that car companies and dealers need most and can greatly improve the transaction conversion.
After 17 years of pledge supervision business, more than 17,000 of the 20,000 4S stores in the country are customers of Changchang shares, and the most abundant resource is the data assets of pledged cars in 4S stores. With this as the "raw material", Changjiu has built a set of index systems based on the "data middle platform strategy", and is equipped with corresponding data modeling capabilities, such as the data middle platform integrated by the lakehouse.
The structured data assets form top-down, macro to micro reports, the frequency is refined to the day, including vehicle data and user data, and the data resources of Polaris, VFS, Zhikexing, Qianpinmao, Jiuche GO and other businesses run through the whole life cycle of automobile circulation.
For example, the inventory depth, circulation days, and sales of each auto brand in each province or even each city, the risk rating of 4S stores, whether they are privately transferred or sold, user portraits, labeling strategies, effect analysis, and public opinion of the whole network and other core data.
And it's all T+0 real-time data, covering new and used cars, and the amount of data is too large and complex to count.
Isn't processing this data and forming solutions including data modeling services to improve the conversion rate is the most needed survival code for digital channel marketing of car companies and dealers?
In fact, it is not that no one in the industry has tried the digital transformation of automobile distribution channels. For example, Digital China, an A-share listed company, has upgraded its "digital cloud integration" strategy, trying to help car companies complete the digital transition through digital cloud integration. In this process, the biggest problem is that after setting up the analysis system, it is found that "it is difficult for a good woman to cook without rice", and there is only a model, and there is a lack of supporting data.
The data gold mine of Changjiu Co., Ltd. can fill this gap, with both "rice" - data of the automobile circulation industry, as well as "cooking utensils" - data modeling and other technical capabilities.
Of course, this is only the empowerment of the data elements of Changchang shares in business.
Financially, the empowerment of data elements on long-term shares is immeasurable, which can be roughly reflected in both assets and valuation.
Ding Jie, senior global partner of Bain, a leading consulting company and president of the Greater China Digital Research Institute, believes that enterprises in the digital era should be user-centric, building users and operating their own digital assets.
As of December 31, 2023, the total assets of Changjiu Co., Ltd. were 336 million yuan. However, from January 1, 2024, the Interim Provisions on the Accounting Treatment of Enterprise Data Resources issued by the Accounting Department of the Ministry of Finance will be officially implemented, and the entry of data assets into the table will officially enter the practical operation stage. That is to say, after the data assets are included in the table in the future, the assets of Changchang shares will never exceed 336 million yuan.
In terms of valuation, data assets can repeatedly create cash flow in the future, and the current value of long-term shares does not include the value that data can create.
In terms of business model, on the one hand, data exchanges are now blooming all over the country, and data from all walks of life have been listed for monetization.
At the same time, in the overseas automotive industry, the United States has run through the business model of quantitative models and tools to empower automobile circulation decisions, and there is also a precedent that digital tools have successfully saved more than $90 million a year in promotional expenses for a certain model of an automaker, indicating that OEMs and dealers do have a great demand for solutions to increase transactions.
According to the official website of Changjiu Co., Ltd., the company is about to strategically cooperate with Digital China (SZ: 000034) member company - Hi-Tech Digital Gathering, and Dr. Cheng Jie, the founder of Hi-Tech Digital Gathering, is the team leader who saved $90 million in promotional expenses for American car companies mentioned above.
summary
Throughout the long-term development, we focus on the digital segmentation of automobile circulation, take the depth of the industry as the source, superimpose the technical genes, and create a high product force and high market share.
At the same time, with the traditional business automobile pledge supervision as the "anchor", it will naturally radiate many innovative businesses, build new increments in the future, and gradually run through a virtuous circle of "pledge supervision fist business-car enterprises, dealers-car data-car companies, dealers-data modeling business", and the traditional business and innovative business will develop in tandem to further increase the depth and market share of the industry.
The doubts at the beginning can be dissipated, and the long-term shares have been "accumulated" in the positive cycle of business, and they only need to wait for the "thin hair".