Events:

The company issues its 2023 half-yearly report.

Comments:

Revenue and profit fell year-on-year under the influence of Zhejiang Shangbai table.

2023H1 achieved GMV75.14 billion yuan, down 31.42% from the same period last year, and realized operating income of 610 million yuan, down 3.62% from the same period last year. On the profit side, 23H1 achieved a net profit of 86.97 million yuan belonging to the parent company, a decrease of 17.15% over the same period last year, and a non-parent net profit of 82.14 million yuan, a decrease of 14.59% over the same period last year. In terms of profitability, 23H1 gross profit margin was 32.32%, down 7.15pct from the same period last year, and the sales / management / R & D expense rates were 12.08%, 6.73%, 1.41%, 0.96%, 0.78% and 0.78%, respectively. The net interest rate was 14.28%, down 3.48pct from the same period last year. In terms of Q2 alone, the company achieved operating income of 331 million yuan, down 9.60% from the same period last year; net profit from home was 44.35 million yuan, down 16.46% from the same period last year; and net profit from non-return was 43.92 million yuan, down 2.58% from the same period last year. 2023Q2's gross profit margin was 30.66%, down 5.43pct from the same period last year; net profit margin was 13.42%, down 2.08pct from the same period last year.

The number of service brands has increased steadily and the general generation business has been continuously expanded.

In terms of business, 23H1's brand online marketing service business achieved operating income of 218 million yuan, up 3.10% from the same period last year, with a gross profit margin of 34.47%, down 2.74 pct from the same period last year; online distribution business achieved operating income of 179 million yuan, up 44.08% from the same period last year, with a gross profit margin of 16.53%, reducing 2.89pct over the same period last year.

The brand online management service business achieved operating income of 146 million yuan, a decrease of 39.67% over the same period last year, and a gross profit margin of 48.99%, a decrease of 3.94pct over the same period last year. The content e-commerce service business achieved an operating income of 62 million yuan, an increase of 23.98% over the same period last year, and a gross profit margin of 32.41%, a decrease in 1.64pct over the same period last year. The company has steadily increased the number of service brands and continued to expand its general generation business. While ensuring the basic stability of its core stock customers, 23H1 has added 16 brands, including swiss, Lin Qingxuan, Linefriends and Grace, etc., as well as the general generation business with the famous British daily chemical brands, Italian famous beverage brands illy and the American head and oral care brand Jiebi, and established deep cooperation with the American well-known groups Church Dwight.

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 company's operating income will be 17.30 pounds 1.927 pounds 2.086 billion yuan, the net profit from the parent is 2.70 pounds 3.20 yuan / 369 million yuan, the EPS will be 1.13 pounds 1.34 pounds 1.55 yuan, and the corresponding PE will be 2219 pounds 16x 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.