2022Q3 losses have narrowed sharply. Youzan 22Q3 achieved total revenue of about 370 million yuan, down 0.9% year on year. Among them, subscription solutions and merchant solutions were 22/150 million yuan respectively, down 3% /6% year on year. GMV increased 10.5% year over year this quarter, accelerating from quarter to quarter.
2022Q3's gross margin increased from 61.3% in the same period last year to 67.5%. Among them, subscription solutions increased from 68.7% to 77%, and merchant solution gross margin increased from 49.6% to 53.4%, mainly due to optimization of transaction service cost structures. The sales expenses rate fell from 66.7% to 47.4%, the administrative expenses rate fell from 23.6% to 14.8%, and the R&D expenses rate fell from 46.8% to 15.7%.
The net loss for the return mother was 02 million yuan, and the loss for the same period last year was 160 million yuan. The loss ratio was greatly optimized from -42% to -0.5%.
Focus on core customer groups and optimize the merchant structure. As of 2022/Q3, the stock of paying merchants reached 89,200, a year-on-year decrease of 1%. In Q3, 11,600 new paying merchants were added, an increase of 12% over the previous month, and 13,400 merchants were lost. Among them, as of Q3, the number of SaaS merchants in stores was 34,900, a decrease of 3% over the previous month, mainly due to the fact that the number of Wangxiaodian merchants fell to 10,200 and lost 1,417 over the previous month. If the influence of Wangxiaodian is excluded, the number of store SaaS merchants will continue to grow.
In the future, Youzan will focus on the three core customer groups of content monetization, brand DTC, and store digitization to provide matching solutions and build a more efficient sales system. We expect that “Wangxiaodian,” a low customer unit price product launched for a sinking market, may not continue to expand and invest in the future. Looking forward to the future, it is hoped that the merchant structure will be optimized to promote the increase in merchant APRU, activity, and renewal rates.
GMV's recovery is accelerating quarter by quarter, and store SaaS continues to grow at a high rate. Q3 GMV was 26.2 billion yuan, up 10.5% year over year, and accelerated quarterly. In the first three quarters, the growth rate of non-Kuaishou GMV was about 23.9%. From a structural point of view, the store SaaS GMV for the first three quarters was 31.2 billion yuan, an increase of more than 60% over the previous year, accounting for an overall increase of 42%. Since the share of GMV in the Kuaishou channel in 202Q4 has dropped to 2%, and the impact of Kuaishou in the future has basically been eliminated. We expect 2022Q4 GMV to continue to achieve healthy growth, and the annual GMV is expected to exceed 100 billion dollars.
It is expected that operating results will continue to improve by promoting cost reduction and efficiency. The company's primary business goals for 2022 are to increase per capita output, improve operating cash flow and operating results. In terms of fee reduction, sales and R&D investment are reasonably controlled, and through personnel optimization, the Q3 cost side has been greatly improved. In terms of efficiency, per capita income in Q3 increased 112.9% year on year and 30.9% month on month. The Q3 sales efficiency index (number of new signers/number of sales people) increased by 43% month-on-month, the number of paying merchants and number of employees increased by about 110% year-on-year, and by about 26% month-on-month. We anticipate that the company's cash flow and operating profit will continue to improve in the future.
Maintain a “buy” rating. We expect China to have revenue of 1,52/177/2.14 billion yuan for 2022-2024, adjusted net profit of -5/-1/03 billion yuan, and maintain a “buy” rating.
Risk warning: The scale of delivery of goods from private domain platforms fell short of expectations, competition from official channels such as WeChat applets exceeded expectations, the increase in the number of paying merchants and merchant turnover fell short of expectations, and the improvement in merchant renewal rates fell short of expectations.
