Nomura released a report analyzing Commodity City. This report is easily biased by the title.
The target price was lowered from 23.3 yuan to 16.45 yuan, but the rating was still Buy. The revenue and profit forecast for 2026 were revised downwards, but Nomura still gave about 36.9% upside space.
This seems contradictory, but in fact it reflects that the two accounts of the same company are being repriced.
The first is the revenue recognition account.
The amortization of digital trade port entrance fees is slower than expected, and the release of short-term profits is not as fast as previously thought.
The direct reason why Nomura lowered its target price this time is that the confirmation of admission fees related to GDTC, the global digital trade center, is slower than expected.
The report mentioned that the Small Commodity City Digital Trade Port has begun operations on May 15, 2026, covering end-to-end digital trade services such as product innovation, international trade compliance, and cross-border payments.
The fourth floor of the market part of the Digital Trade Center has opened in April 2026. The T3-T5 office buildings will be delivered in stages and revenue will be recognized in 2025. T1/T2 tenant subscription will begin in April 2026, and management expects delivery in 2027.
As of the first quarter of 2026, the company’s contract liabilities reached 7.9 billion yuan.
Nomura believes that this part will gradually be converted into revenue and profits as projects are delivered.
However, the admission fee is not recognized in full at once, but is released during the contract amortization cycle.
The market originally recognized the pace of profits faster, but Nomura has now moved the pace back, thus lowering its revenue forecast for 2026/2027 by 16.7%/16.0% and its net profit forecast by 12.3%/8.0%.
This has a direct impact on the stock price. If investors buy based on the short-term profit explosion, the slower pace of confirmation will be pressure; if viewed based on the trading infrastructure platform, the 7.9 billion yuan contract liability will be a reservoir for revenue realization in the next few years.
The second one is the trading platform account.
Commodity City cannot be understood only in terms of real estate rental or market stalls.
Nomura quoted data from Yiwu Customs. In the first quarter of 2026, Yiwu’s total import and export value increased by 25% year-on-year to 209.4 billion yuan, about 10 percentage points faster than the overall trade growth rate nationwide; exports increased by 21.3% year-on-year to 178.6 billion yuan.
What is even more noteworthy is that Yiwu’s trade with ASEAN increased by 68.3% year-on-year, becoming the fastest growing market.
This set of data shows that the Yiwu trade network behind the Commodity City still has spillover capabilities.
The slowdown in rent growth in traditional markets is a realistic constraint; but if the company can connect Yiwu merchants, cross-border contract fulfillment, payment, digital product selection, and overseas market expansion, its revenue structure will migrate from “market operations” to “trade service platform.”
Nomura mentioned that management expects the increase in cross-border payment transactions to exceed US$10 billion in 2026.
This number should not be viewed only as financial business, it is more like a flow indicator of Yiwu trade digitalization.
Where payment occurs, contract fulfillment, risk control, data, and supply chain services may be deposited.
Nomura lowered the target PE of Commodity City from 29 times to 16 times, and the target price from 23.3 yuan to 16.45 yuan.
The profit forecast has been revised downward because of the slow revenue recognition of the digital trade port; the valuation multiple has been lowered because of the uncertainty of the global consumption and trade environment, the slowdown in rental growth in traditional markets, and the company’s profit growth rate has fallen back from the industry’s upward trend.
Nomura uses 16 times the 2026 PE, corresponding to 2026 EPS of 1.03 yuan, and still maintains Buy.
This shows that Nomura is not denying the company, but reclassifying Commodity City from “high growth revaluation” to “stable platform realization”.
The report also mentioned that Commodity City has submitted an H-share listing application to the Hong Kong Stock Exchange on May 29, 2026.
If completed, the company will form an A+H dual listing structure and the coverage of international investors will be expanded.
This matter cannot simply be written as a financing benefit.
The assets of Commodity City are connected to China’s most typical small commodity export network, but in the past, the capital market valued it more as an A-share local commercial asset.
If the H-share listing proceeds, foreign investors will more directly compare its valuation logic with global trade services, cross-border e-commerce infrastructure, and logistics fulfillment platforms.
Generally speaking, Small Commodity City is now not a company that simply looks at target price increases or decreases, but a company that looks at “realization speed.”
Nomura’s lowering of the target price shows that the market has been too optimistic about the digital trade port’s revenue recognition and valuation multiples in the past; but maintaining Buy also shows that the core assets are not broken.
Follow-up observations can be made on the pace of converting contract liabilities into income, the proportion of cross-border payment and trade service revenue, and the valuation attitude of international investors after the listing of H shares.
If these three items are advanced at the same time, the valuation of Commodity City will have a chance to reopen; otherwise, the company will be revalued from growth back to stable dividend-paying assets, and the valuation elasticity will be significantly narrowed.
