Multi-channel, multi-category and multi-brand contribute to long-term growth, maintaining a "buy" rating after pinduoduo has become the fastest-growing channel in the past two years, Douyin e-commerce has gradually become a new driver of the company's performance; new categories such as food are expected to make a breakthrough in 2021; and gain the online operation rights of international fast fashion Centra China, with a richer brand matrix and sufficient momentum for long-term growth. We keep the profit forecast unchanged, forecasting that the net profit from 2021 to 2023 is 15.4,20.9 and 2.7 billion yuan, corresponding to EPS is 0.63,0.85 and 1.10 yuan respectively, and the current stock price is 16.5,12.2,9.4 times corresponding to PE, maintaining the "buy" rating.

The essence of business logic: master the core advantages of suppliers and dealers, and create products that "good goods are not expensive". We think that no matter how the e-commerce platform changes, the demand for good goods is not expensive, and the competition between brands will eventually return to the dimension of competitive supply chain. Antarctic e-commerce has a high-quality supply chain in various industries and a large and stable customer base. In the long run, the company's development will not be limited by the rise and decline of different platforms. The company's business model can effectively solve the problem of resource mismatch under the traditional retail model, achieve high turnover, low inventory, high ROE and produce "good goods are not expensive" products. The value chain connects consumers, suppliers, dealers and platforms. A reasonable value chain can make all parties in the interaction process profitable and make the value chain stable for a long time. The company has its own brand, channels and other resources, and can effectively mobilize and share high-quality supply chain resources.

Grasp the dividends of new platforms such as pinduoduo and Douyin, and further improve the brand matrix (1) in 2020, the company realized GMV88.01 billion in pinduoduo channel, a year-on-year growth rate of 121.98%, increasing its 8.92pct to 21.89%. Pinduoduo is expected to become the company's largest channel in 2022. Pinduoduo's monetization rate is relatively low. With the rapid growth of pinduoduo channel and the gradual maturity of suppliers in the channel, the company will gradually cancel discounts for some categories and some stores, and it is expected that the monetization rate of each channel will tend to be consistent in the mature stage, driving the overall monetization rate to rise steadily. (2) the company is also growing rapidly in new channels such as Douyin. Relying on a large number of high-quality supply chain resources mastered by Antarctic e-commerce, the company has solved the pain point of the lack of high-quality supply chain on the platform, combined with the advantages of Douyin platform algorithm recommendation. Antarctic stores successfully broke through among many brands and reached the top of the sales list from April to June. (3) in July 2021, Antarctica E-commerce has become the only partner in the online business of the international fast fashion brand Centra. The supply chain and operation advantages of Antarctica e-commerce resonate with the strength of Centra's brand, which is expected to replicate the business model similar to SHEIN.

Risk hint: category expansion is not as expected, and new channel expansion is not as expected.