As an important part of digital industrialization, the digitization process of the industrial Internet is advancing at an accelerated pace. In the “14th Five-Year Plan for Digital Economic Development” issued by the State Council earlier, it is clearly proposed to promote the integration and application of the industrial Internet and promote the integrated development of industries through digital technology.

Driven by favorable policies, the prospects for the development of the industrial Internet can be described as clear. According to the “White Paper on China's Industrial Internet”, China's industrial Internet market will reach 4 trillion yuan (RMB, same below) in 2025, and by 2030, this scale will reach 12.22 trillion yuan. At the same time, China's industrial Internet market penetration rate will also enter a period of significant growth, reaching 12% by 2025 and 38% by 2030.

As an industry-leading industrial Internet company, Huitongda Network (09878) has successfully built an industrial service platform integrating online and offline by successfully building an industrial service platform integrating online and offline by deeply cultivating the retail industry in the sinking market and empowering its excellent digital technology and supply chain capabilities.

Recently, the company also confirmed its gold content to the market with an annual report that increased revenue and profit. In 2023, Huitongda Network achieved revenue of 82.43 billion yuan, a steady increase over the previous year; overall profit on the profit side, net profit to mother reached 448 million yuan, an increase of 42% over the previous year. At the same time, the company's business network is expanding rapidly. By the end of 2023, the number of the company's SaaS+ subscribers was 132,000, up 15.6% year on year, including 48,000 paid users, up 61.4% year on year.

The day after the results were announced, the company's stock price surged by nearly 5%, and the trading volume hit a new high level since this year. From this, it can be seen that investors affirm the company's excellent business model. According to the Zhitong Finance App, this is inseparable from the company's comprehensive and in-depth innovation and upgrading of the industrial model during the reporting period to achieve high-quality and stable expansion of the industrial chain.

Since 2023, Huitongda Network has actively optimized its industrial model, continued to promote leading brand cooperation, accelerated its own brand building and integrated production and marketing, and carried out an online and offline omni-channel layout. During the period, while helping upstream supply chain partners and brand manufacturers open up channels of decline, the company also actively promoted online and digital upgrading from the supply side to R&D, production, and manufacturing.

Specifically, Huitongda Network's industrial supply chain is mainly reflected in the following major aspects:

1. Continue to deepen cooperation with leading brands

During the reporting period, the company's supply chain covered various industry sectors such as consumer electronics, agricultural production materials, household appliances, transportation, alcohol and beverages, and household cleaning, and successfully achieved in-depth cooperation with leading brands in the Apple, Midea, Gree, BYD, and Wuliangye industries.

As cooperation continues to deepen, the company's ability to control the supply chain has also improved, accounting for 51% of the headquarters supply chain.

Among them, in cooperation with Apple, Huitongda Network completed O2O projects for more than 1,000 authorized stores throughout the year, driving revenue growth in the consumer electronics sector.

In addition, the cleaning and chemical daily use industry is also a key enterprise for the company to accelerate its layout in 2023. During this period, the company has reached cooperation with many leading enterprises, including Unilever, to help brands efficiently reach the sinking market while being close to and meeting the actual consumption needs of rural consumers. In the process, Huitongda Network has also improved its own profitability and successfully achieved a win-win situation for all parties.

II. Promoting the upgrading of the home appliance industry with B2f reverse supply chain

Recently, the State Council issued the “Action Plan to Promote Large-scale Equipment Renewal and Consumer Goods Trade-In”. Some analysts point out that the new round of “large-scale equipment renewal and consumer goods trade-in” is currently an important measure to unleash the potential of domestic demand, promote industrial transformation and upgrading, and promote high-quality economic development. With the implementation of the country's new round of “trade-in” policies, it is expected to promote the upgrading of products such as home appliances, which will bring trillion-yuan growth space to the market.

With the further release of demand for home appliances under the trade-in policy, this also places higher demands on the home appliance industry chain. And how to improve the efficiency of matching supply and demand, and thus drive the transformation and upgrading of the home appliance industry, requires the use of the power of industrial platforms.

During the period, the company collaborated strategically with Jiangxi Gongqingcheng Youth Innovation Group and Rongdian Group, actively participated in product development and manufacturing, successfully entered the upstream home appliance ecosystem, and launched the “Zhonghuida” brand air conditioner under the “B2f model” by accurately adapting to the sinking market's demand for products and prices, with a planned annual production capacity of 1 million units.

Under the in-depth implementation of the “B2f reverse supply chain” model, Huitongda Network deeply participated in the entire industrial chain and fed back demand to production, thereby improving competitiveness and profit margins. While promoting cost reduction and efficiency throughout the entire chain, it also brought a new model sample reference to the home appliance industry.

3. Keep up with policy steps, reduce costs and increase efficiency of the “circular economy” model

In addition, Huitongda Network will also closely follow the country's low carbon and sustainable development strategy during the period to unblock the circular economy with digital technology.

Through further exploration of demand for original categories, Huitongda Network is actively developing a “circular economy” model in new energy, agricultural materials and other industries, and is promoting the two dual cycles of “agricultural downgrading+bulk agricultural products upward” and “new energy going to the countryside+battery recycling”:

At the upward level of agricultural products, Huitongda cooperates with local food bureaus, supply and marketing agencies to carry out storage work for growers and member stores. The categories mainly focus on cash crops such as corn, wheat, sorghum, etc., and cooperate deeply with agricultural product processing enterprises such as Muyuan Co., Ltd. and Zhengda Group to achieve fertilizer integration from agricultural sales to grain storage to deep processing of agricultural products, greatly improving the efficiency of the industrial chain.

At the battery recycling level, Huitongda and supply chain partners have established waste battery recycling networks in Anhui, Jiangsu, Shandong and other provinces, under the management of more than 5,000 recycling outlets, and have established cooperation with upstream battery manufacturers and smelters such as Conch, Huayou, Jubao, and Cen Xiang to help farmers' families build beautiful villages while helping farmers turn waste into treasure and increase income and profit.

These two dual cycles not only allow rural consumers to “buy well, spend less money”, “sell well, and make more money,” but also simultaneously implement a low-carbon development model and promote green sustainable development, while reducing costs and increasing efficiency, while helping to build new quality productivity in the renewable resources industry.

In summary, in a period of opportunity for the booming development of the industrial Internet, Huitongda Network is continuously expanding the depth and breadth of its business through its unique business model, serving consumers through deep management, while reducing costs and improving the efficiency of the entire industrial chain. This has also made the company's growth certainty continuously converge and increase.

Looking forward to the future, Huitongda said that with regard to industrial upgrading, the company will continue to deepen the construction of an innovative supply chain system, continue to develop and deepen cooperation with leading brands in various industries, and link more high-quality upstream resources. At the same time, the company will further strengthen its own brand building and increase the proportion of integrated production and marketing businesses. In addition, Huitongda Network will continue to promote the development of a standardized B2F reverse supply chain model for the industrial Internet based on demand, and operate on a marketing-driven model.

With the continuous advancement of all-round innovation and upgrading of the industrial supply chain, the 2024 Huitongda network is clearly worth the market's optimistic expectations.