Brief comment on performance
Event: the company released 1Q21 results on April 27, with an income of 813 million yuan (+ 20.99%), a net profit of 134 million yuan (+ 4.28%) and a non-return net profit of 128 million yuan (+ 23.73%). The performance was in line with expectations. Split by business: the revenue of this business is 153 million yuan (+ 0.62%), of which the revenue of brand authorization and integrated services business is 137 million yuan (+ 0.15%), and the net profit is 105 million yuan (+ 5.43%). The revenue is 660 million yuan (+ 26.95%) and the net profit is 29 million yuan (+ 0.35%).
Pinduoduo led the growth rate of GMV to increase, while the monetization rate declined. 1) the 1Q21 GMV is 9.124 billion CNY (+ 59.25%), which is 33pct higher than that of 4Q20. From a sub-channel point of view, pinduoduo continued to lead the growth rate, with Ali, JD.com, pinduoduo and VIPSHOP GMV increasing by 28.64%, 58.97%, 206.27% and 67.46% respectively; from a sub-brand point of view, the Antarctic / Cartier crocodile / classic Teddy GMV increased by 58.68% 57.19% and 110.33% respectively, and all brands maintained rapid growth. 2) according to the business caliber of brand authorization and integrated services, the monetization rate of 1Q21 is 1.5%, with a drop of 0.89 pct, mainly due to the slowdown in the growth rate of Ali channel with a higher monetization rate and the increase in the proportion of new platforms and new categories.
Both gross and net interest rates declined, while accounts receivable rose. 1Q21 gross profit margin is 23.4% (- 4.6pct) and net profit margin is 16.39% (- 2.7pct), which is mainly due to the decline in the share of high gross margin business (- 3.95pct).
1Q21 accounts receivable totaled 1.265 billion yuan, an increase of 12.25% over the beginning of the year, mainly due to new loans in the current period of factoring, but as the company actively strengthened the collection of accounts receivable, the credit impairment loss decreased by 110.35% to 2.675 million yuan compared with the same period last year.
Sign an agreement with worthy Buy to promote the layout of live e-commerce. On March 17, the company signed a cooperation agreement with worth Buy help Technology, authorizing it to use the Antarctic trademark in Douyin e-commerce (Douyin Shop, Select Alliance, etc.) and other channels. Help Technology will pay the company a first-phase license fee of no more than 80 million yuan. We believe that this cooperation has accelerated the layout of the company's live e-commerce business and added new performance increments for the company.
Investment advice and risk tips
Investment suggestion: after the rapid increase of new channels and new categories, the operational efficiency is expected to be enhanced, and the gross and net interest rates are expected to increase, which will drive the company's performance growth. Considering that the monetization rate of 1Q21 is not as good as expected, the profit forecast for 2021-23 will be reduced by 8% to 0.58, 0.71 and 0.88 respectively, corresponding to PE15/12/9 times, and the "Buy" rating will be maintained.
Risk Tip: Ali platform traffic rules change the company's share decreased, the monetization rate increased less than expected.