2021H1 performance is basically in line with expectations, BABA channel inventory smoothly, maintain the "buy" rating 2021H1 company income of 1.661 billion yuan (+ 2.15%), return to the mother net profit of 246 million yuan (- 42.85%), the slight year-on-year increase in revenue is mainly due to time interconnection income offset BABA channel growth slowdown caused by the decline in revenue.
Considering that the continuous investment in new projects may dilute some of the profits, we downgrade our profit forecast for 2021-2023 and forecast that the net return profit for 2021-2023 is 8.0 trillion yuan (1.51 billion yuan) (previously it was 2.70 billion yuan (15.4 billion yuan), and the corresponding EPS is 0.3 pound (0.50.8 yuan), and the current stock price is 13.9 times that of PE. It is expected that with the normalization of the company's channel structure and the rising trend of monetization, GMV and revenue will be repaired at the same time and continue to maintain the "buy" rating.
Revenue split: the business income of this part is affected by the elimination of label inventory, the growth of time interconnection business is stable, the business income of 2021H1 is 317 million yuan (- 35.49%), and the net profit is 193 million yuan (- 49.55%). From a separate channel point of view, Pinduoduo's channel income exceeds 70 million yuan, with a growth rate of more than 60%. Live broadcast business revenue of more than 20 million yuan, the decline in revenue is mainly due to the company's initiative to adjust BABA channel revenue target to reduce BABA channel customers' trademark inventory pressure, the current inventory removal is smooth, it is expected that 2021H2 revenue will be greatly improved. The revenue of 2021H1 time interconnection is 1.344 billion yuan (+ 20.43%). While expanding the cooperation channels of old customers, the advertising section has added Baidu, Inc. customers and major social customers such as Soul, Momo Inc and explorers. It is expected that the profitability will improve steadily in the future.
GMV split: the growth rate of traditional search channels slows down, Pinduoduo channels turn to medium speed, and the eye-catching 2021H1GMV of channels such as Douyin is 19.103 billion yuan (+ 32.87%), which is in line with expectations. In terms of channels, the GMV growth rate of BABA / Pinduoduo / JD.com / Vipshop Holdings Limited channels is 3.72%, 115.94%, 39.41%, 40.9%, 48%, 30%, 15%, 5%, respectively, and the GMV of Douyin and Kuaishou Technology channels is 415 million yuan, accounting for 2%. Monetization rate: the average charge for 2021H1 brand integrated services has increased by more than 8%, and the monetization rate of 1.49% is mainly due to destocking.
Short-term pressure on profitability, good operating ability, optimistic five-year plan to release multi-brand categories, synergy 2021H1 gross profit margin of 22.91% (- 10.17pct), period expense rate of 6.83% (+ 0.69pct) is mainly due to the company's new cross-border and food business corresponding to the increase in labor costs, the net profit rate is 14.81% (- 11.67pct), as of 2021H1 company inventory of 2.7158 million yuan, basically the same as the same period last year. Optimistic about the company's plan for the next five years, we believe that under the scale, supply chain and digital moat, the company's continuous business innovation and expansion of brand / category / channel breadth will consolidate its competitive advantage, while cross-border business is expected to become a new growth point.
Risk hint: the platform competition pattern changes; new business expansion, category expansion is not as expected.