Brief comment on performance
The company released its semi-annual report on August 27. 2021H1 achieved revenue of 1.661 billion yuan, + 2.15% year-on-year, net profit of 246 million yuan, year-on-year-42.85%, and non-net profit of 223 million yuan,-44.33%. Of these, 2021Q2 achieved 849 million yuan in revenue in a single quarter,-11.1% year-on-year, 112 million yuan in net profit,-63.0% in year-on-year, and 95 million yuan in non-net profit,-68.0% in the same period last year.
Business analysis
The revenue / profit of 2021H1 company has declined, while the time interconnection has increased slightly: 2021H1, Antarctic e-commerce headquarters / time interconnection realized revenue of 3.19 / 1.344 billion yuan, year-on-year-35.2% / + 18.4%; net profit 1.90 / 52 million yuan,-49.5% / + 1.7% year-on-year. Antarctic e-commerce headquarters mainly includes brand authorization and related business, subsidiary time interconnection is mainly Internet advertising + celebrity business.
The decline in revenue in this part is mainly due to the slowdown in the growth rate of BABA channel, and the company takes the initiative to adjust its revenue target in BABA channel in order to reduce the trademark inventory pressure of customers.
The GMV of 2021Q2 company is 9.98 billion yuan, + 15.38% compared with the same period last year. Pinduoduo, Douyin, Kuaishou Technology and other channels have achieved high growth: 2021Q2, BABA GMV is 4.56 billion yuan, year-on-year-13.2%; JD.com GMV is 1.37 billion yuan, year-on-year + 23.0%; Pinduoduo GMV is 3.12 billion yuan, year-on-year + 73.7%; Vipshop Holdings Limited GMV is 518 million yuan, year-on-year + 23.3% Douyin & Kuaishou Technology channel contribution GMV reached 415 million yuan.
Social e-commerce channels such as Douyin and Kuaishou Technology are expected to improve the company's monetization rate: 2021Q2, the monetization rate of the company's brand comprehensive services is 1.47%, year-on-year-2.20pct, due to ① 's initiative to adjust its revenue target to reduce the trademark inventory pressure of BABA platform customers; Pinduoduo platform with lower ② monetization rate is growing faster. In the future, the completion of the elimination of signage inventory and the growth of social e-commerce channels such as Douyin and Kuaishou Technology, which have a high monetization rate, are expected to improve the overall monetization rate of the company. The company disclosed that the live broadcast business contributed more than 20 million yuan in revenue in the first half of the year, and the corresponding monetization rate reached more than 4.8%.
Disclose the draft equity incentive plan and bind the interests of new executives and core middle-level backbones: on August 27, the company issued a draft equity incentive plan to grant 40 million stock options, accounting for 1.63% of the company's total share capital on August 27, with an exercise price of 7.09 yuan per share. The incentives include six new executives hired from June to July 2021, and 100 middle managers and technical backbones. The performance evaluation goal of this equity incentive is: based on 2020 income, the income growth rate in 2021 is not less than 15%. The income growth rate in 2022 is not less than 30%.
Profit forecast and investment rating: Pinduoduo, social e-commerce and other channels are expected to continue to promote the company's GMV growth. Considering that the slow growth of traditional channels and the demurrage of signage affect the company's short-term monetization and profitability to a certain extent, we have lowered the company's 2021-23 net profit forecast from 12.5 won 14.6 / 1.68 billion to 8.9 / 10.3 / 1.15 billion, corresponding to the closing price of-25% / + 15% / + 12% on August 29, corresponding to 25 / 22 / 19x for 21-23, and downgraded to "overweight" rating.
Risk tips: platform policy change, new business and new channels are not as expected, product quality problems, etc.