Event
On August 9, 2022, China Youzan released its interim results report of 2022. In the second quarter, the company achieved operating income of 366 million yuan, down 5.1% from the same period last year. Of this total, revenue from subscription solutions was 219 million yuan, down 12.6% from the same period last year. Revenue from merchant solutions was 145 million yuan, down 9.0% from the same period last year. The net loss in the second quarter was 78 million yuan, compared with a loss of 108 million yuan in the same period last year.
Brief comment
New retail solutions continue to move forward
In the second quarter of 2022, the company achieved revenue of 367 million yuan, down 5.1% from the same period last year.
Revenue from subscription solutions reached 219 million yuan, down 12.6% from the same period last year, and the number of paid merchants in stock decreased by 4% compared with the same period last year. ARPU dropped by 16%. Revenue from merchant solutions reached 145 million yuan in the second quarter, an increase of 9% over the same period last year. Among them, take rate rose by 0.04pct to 0.58% compared with the same period last year. In the second quarter of 2022, the company achieved GMV249 billion, an increase of 1.63% over the same period last year, and the average GMV of merchants fell 2.33% from the same period last year. In the first half of the year, GMV from non-Kuaishou Technology channels increased by 25% compared with the same period last year, which was the same as the growth rate in the first quarter. The impact of Kuaishou Technology channels on business was further weakened. Among them, GMV from store SaaS solutions grew rapidly compared with the same period last year, with GMV reaching 19.4 billion yuan in the first half of the year, accounting for 41% of the total transaction volume, up from 39% in the first quarter.
The user turnover rate continued to decline, with the proportion of SaaS users in stores rising to 40%. In the second quarter of 2022, the company added 10368 paying merchants, down 6.5% from a year earlier and an increase of 7.8% from a month earlier. At the end of the second quarter of 2022, the number of paid merchants in stock was 91005, an increase of 4% year-on-year and 2% month-on-month, of which 60% subscribed to e-commerce SaaS and 40% subscribed to SaaS (including likes retail, like chain, like education and Wangxiao stores), an increase of more than 100% year-on-year. At the end of the second quarter, the company's user turnover rate was 9.61%, a month-on-month decrease of 0.35pct and a year-on-year decrease of 10.81pct, and the company's user retention continued to improve. ARPU fell 15.98% to 2410 yuan in the second quarter of 2022 compared with the same period last year.
The gross profit margin decreased slightly due to the adjustment of income structure, and the expense rate improved month-on-month in 2022. In the second quarter, the company realized a gross profit margin of 60.32%, compared with 62.75% in the same period last year, of which the gross profit margin of subscription solutions was 69.16%, compared with 76.17% in the same period last year. The gross profit margin of merchant solutions was 47.55%, compared with 38.71% in the same period last year. The decline in gross profit of subscription solutions was partially offset by an increase in gross margins of merchant solutions. The gross profit margin of the first half of 2022 was 60.5%, compared with 60.7% in the same period last year; the gross profit of subscription solution was 300 million yuan in the first half, down 20.3% from the same period last year. The gross profit of the merchant solution in the first half of the year was 140 million yuan, an increase of 28.5% over the same period last year, mainly due to the increase in gross profit caused by the optimization of cost structure and the increase in revenue from private domain intermodal transportation. The expense rate improved significantly during the second quarter, with sales expense rate, management expense rate and R & D expense rate being 60%, 20% and 11% respectively, compared with 62%, 34% and 47% in the first quarter. Other operating expenses (mainly R & D expenditure) are 41 million yuan, down 74% from the same period last year and 76% from the previous year. The decrease is mainly due to the maturity of SaaS business, the reduction of marginal costs, and the optimization of the structure of R & D team.
Profit Forecast: we estimate that China Youzan's annual operating income in 22-23-24 will be 1.51 billion yuan, 2.82 billion yuan, respectively, maintaining a steady growth; the adjusted net profit will be-4.8 million, 2.7 billion, and 3.0 billion yuan, respectively.
Risk hint
ARPU growth fell short of expectations, store SaaS business development fell short of expectations, praise for the progress of science and technology transition was not expected, Tencent BABA outside the chain open impact on Wechat ecological private domain e-commerce development.
