Events:

The company issues the 2022 annual report and the first quarterly report of 2023.

Comments:

Revenue has increased rapidly in the past 22 years, and Q1 profit end continues to be under pressure.

In 2022, the company's service brand GMV was 26.485 billion yuan, down 2.27% from the same period last year, and its operating income was 1.539 billion yuan, an increase of 35.55% over the same period last year. The rapid growth in revenue is mainly due to the growth of new customers and new business types such as content e-commerce. On the profit side, the company achieved a net profit of 180 million yuan in 2022, down 44.9% from the same period last year; the net profit from non-return was 148 million yuan, down 42.73% from the same period last year; and the gross profit margin was 33.59%, down 13.79% from 14.02 pct; and 17.9 pct from the same period last year. From the cost point of view, the company's sales / management / R & D expense rates in 2022 are 10.49%, 5.29%, 2.1%, respectively, and + 2.95/-1.91/-0.05pct, respectively. The decline in profitability compared with the same period last year is mainly due to (1) a decline in the proportion of revenue from high-margin brand management services; (2) affected by the overall environment, the company needs to pay higher costs to achieve the same performance target; (3) the procurement cost of cross-border business is affected by the exchange rate; and (4) there is a large amount of new brand investment in the general agent business, and more projects are still in the pre-investment stage. The GMV of 23Q1 increased by nearly 6% over the same period last year, achieving operating income of 279 million yuan, up 4.6% from the same period last year; net profit from home was 43 million yuan, down 23.21% from the same period last year; and net profit from non-return was 43 million yuan, down 17.86% from the same period last year. 23Q1's gross profit margin was 34.3 percent, down 9.82 pct; net profit by 15.31 percent, and 5.54 pct from the same period last year.

Beauty products category ushered in a recovery, new channels, new categories continue to expand sub-brands, 2022-2023Q1 company to ensure the basic stability of the core stock of customers on the basis of new brands, including Manxiu Leidon, Vitasoy / milk, old street coffee, cold sour spirit, Zhongjie and other 54 brands. From a sub-channel point of view, brands such as OLAY, Opelai and Maogeping of 2023Q1's deep cooperation promote the steady growth of Taobi channels, the company is actively expanding the global cooperation of existing customers, and Taowai channels such as Pinduoduo and Kuaishou Technology are growing rapidly. According to the category, the growth rate of cosmetics GMV is more than 10%; the personal care GMV is growing steadily; the GMV of fashion games has declined due to the influence of policy; and the GMV of new food, pets and jewelry categories is growing rapidly.

Investment advice and profit Forecast

The company is the leading domestic e-commerce service provider, channel brand category continues to expand. From 2023 to 2025, we estimate that the operating income of the company will be 14.79, 1.726, 1.91 billion yuan, respectively, and the net profit will be 3.44, 4.09 and 465 million yuan, respectively, and the EPS will be 1.71, 1.95 yuan, respectively, and the corresponding PE will be 27max, 23 and 20x, respectively, maintaining the "overweight" rating.

Risk hint

Industry competition aggravates the risk; head customer loss risk; category, brand, new project expansion is not as expected risk.