FY24H1 revenue of 2.8 billion yuan increased 34%, e-commerce GMV 5.7 billion increased 19%, FY24H1 (2023/6/1-11/30) Dongfang selection revenue of 2.80 billion yuan increased 34%, net profit to mother of 250 million decreased 57%, and adjusted net profit of 51 million yuan decreased 15%.
By business, e-commerce revenue of 2.41 billion yuan increased 37%, accounting for 86% of the total; university business revenue of 370 million increased 24%.
FY24H1 e-commerce (including Douyin, Taobao, self-operated apps, etc.) GMV was 5.7 billion +19%. The self-operated and live e-commerce business team reached 1,587 people, including 643 supply chain and product teams.
Affected by the expansion of the e-commerce live streaming business, the profit margin was pressured by the short-term FY24H1 gross profit margin of 39.1%, with a decrease of 8 pct, of which the e-commerce gross profit margin was 32.9%, the same decrease of 10 pct, mainly due to the rapid development of proprietary products and live streaming e-commerce business, and the share of revenue from proprietary products increased by 2 pcts; the sales rate of 20% increased by 9 pcts, mainly due to the expansion of proprietary products and live streaming business teams. FY24H1
Proprietary brand advantages have been established, new product development and supply capacity continues to enhance FY24H1's self-operated product sales of about 1.9 billion dollars (FY23H1 exceeds 1 billion), and the company's proprietary product revenue is growing rapidly, and is an important source of core customer stickiness; as of the end of November 23, the company had about 264 self-operated products; some popular products have begun to have an advantage in scale, with strong bargaining power and cooperative voice. With the continuous development of new products and the strengthening of the supply chain, the room for self-operated products to grow can be expected.
The new account performed brilliantly
The “Walk with Hui” team and account have started operation. The positioning of each account is initially clear. At present, look at:
On the one hand, the establishment of a partner with Hui has effectively maintained Dong Yuhui's unique delivery characteristics and freedom; on the other hand, there are certain differences in account selection specifications and style from Oriental Selection. It does not involve sales of proprietary products, and is an incremental contribution rather than a diversion to GMV;
Since the launch of Lihui and Company, the total GMV is about 80 million, with an average of 46.92 million per day; the Oriental Selection Series MTD account averaged about 30 million GMV per day in January, which is close to the same level compared to the same period last year due to lack of contributions from the two accounts that will start drinking and watching the world, and activities during the same period last year were also quite intense.
Adjust profit forecasts to maintain “buy” ratings
We insist on being optimistic about the core capabilities of the Oriental Selection Team and optimizing anchor incentives and account operations. After the storm, the performance of various accounts has stabilized recently, and multi-platform collaborative development has developed; with SKU expansion and supply strengthening, the branding advantage is getting stronger.
Considering the company's new account or effective increase in GMV and revenue performance, and considering that the profit side is affected by the increase in initial investment in business development and anchor incentive adjustments, we adjusted the profit forecast. The company's FY24-26 revenue is estimated to be 61, 74, and 91 billion yuan (prior FY24-25 values were 5.8 billion and 6.7 billion yuan, respectively), and adjusted net profit to mother was 900, 10.4 billion, and 1.23 billion yuan (1.2 billion yuan and 1.45 billion, respectively), EPS was 0.9, 1.0, and 1.2 yuan per share (FY24- 24-) FY24-25 25 The previous values were 1.2 and 1.4 yuan/share, respectively), and the corresponding PE was 23, 20, and 17x, respectively.
Risk warning: E-commerce popularity falls short of expectations; business development falls short of expectations; market competition is intense; channel expansion falls short of expectations; risks such as the suspension of the Douyin live broadcast room due to irregularities, etc.