Brief comment on performance
On April 27, the company released its quarterly report for 2021. 2021Q1 achieved revenue of 813 million yuan, + 20.99% year-on-year, net profit of 134 million yuan, + 4.28% year-on-year, and non-net profit of 128 million yuan, + 23.73%.
Business analysis
In 2021, the revenue and profits of Q1 company's headquarter and time interconnection business increased: in the first quarter, the company realized 153 million yuan in revenue, + 0.62% year-on-year, 105 million yuan in net profit, + 5.43% in the same period last year, and 660 million yuan in income in time interconnection, + 26.95% in the same period last year. 29 million yuan in net profit, + 5.43% in the same period last year. Time interconnection focuses on increasing the layout of short video marketing business, quickly deepening cooperation with head short video marketing media, and achieving high-speed growth.
Pinduoduo channel accelerated the overall GMV growth: 2021Q1, the company's GMV was 9.124 billion yuan, + 59.25% compared with the same period last year, the highest quarterly growth rate since 2019Q3. We believe that the main reasons for the high increase in GMV include the low Q1 base of ① last year and the continuation of the high growth trend of ② Pinduoduo GMV.
From a channel point of view, BABA's GMV is 4.592 billion yuan / + 28.64%YoY, JD.com 's GMV is 1.484 billion yuan / + 58.97%YoY, Pinduoduo's GMV is 2.575 billion yuan / + 206.27% YoY, Vipshop Holdings Limited's GMV is 473 million yuan, + 67.46% compared with the same period last year.
Multi-brands go hand in hand, and the future will continue to enrich the brand matrix: in the first quarter of 2021, the company's Antarctic / Cartier crocodile / boutique Teddy GMV is 82.88 / 7.10 pm respectively, a year-on-year increase of 58.68%, 57.19%, 110.33%, and each brand keeps growing. The company plans to continue to enrich the connotation of brand matrix, maintain the existing brands while appropriately increasing the number of brands operated by the company, horizontally and vertically enrich the connotation of product categories, and further improve product coverage and performance-to-price ratio.
Look forward to Pinduoduo monetization rate increase and social e-commerce new channels to open up: 2021Q1, company brand integrated services monetization rate of 1.68%, year-on-year-0.72pct. We believe that the main reasons for the decline in monetization include the decline in the proportion of BABA channels with a high traditional monetization rate of ① and the change of flow rules; the monetization rate of ② Pinduoduo channels is not high. In the future, with the continuous expansion of the company's influence in Pinduoduo and the deepening of the brand degree of Pinduoduo platform, we are optimistic about the prospect of Pinduoduo channel monetization. Recently, the company announced that it will sign a cooperation agreement with worth Buy help Technology to lay out Douyin e-commerce, which is expected to become a new performance growth point.
Profit forecast and investment rating: BABA channel growth slowdown to a certain extent affect the company's short-and medium-term monetization and profit growth. The company actively layout Pinduoduo, social e-commerce and other new channels, the overall GMV is still expected to maintain strong growth. We predict that the net profit of the company in 2021-23 will be 12.5 / 14.6 / 1.68 billion yuan. The closing price on April 29 corresponds to a 21-23 PE of 16 / 14 / 12x, maintaining a "buy" rating.
Risk tips: platform policy change, category expansion is not as expected, supplier quality control issues, etc.