Event: China praised the release of the Q2 quarterly results report for 2021 on August 11, 2021.
The company's 21Q2 realized operating income of 386 million yuan (YoY-14% YoY QoQ-7%), gross profit of 242 million yuan (QoQ-12%) and gross profit margin of 62.7%.
Our view:
1. The impact of the decline of Kuaishou Technology channel is still there, and the short-term growth rate is under pressure: 2021H1 GMV from Kuaishou Technology channel continues to decline, accounting for 20% of 2021H1 from 40% of 2020H1, but GMV of other channels increased by 34% year-on-year. Kuaishou Technology channel GMV decline on the revenue impact of praise, short-term growth pressure, but does not affect the long-term growth trend of GMV.
2. Under the impact of the epidemic, small and medium-sized customers are greatly affected: the renewal rate of merchants decreases under the impact of the epidemic, and the impact on small and medium-sized businesses is relatively obvious, mainly due to the relatively low survival rate of small and medium-sized businesses. The renewal rate of CUHK guests is stable. Structural changes have taken place in the overall customer base, and we may focus on medium-sized customers in the future.
3. The overall performance is basically the same and the operating condition is sound: 2021H1 achieved a revenue of 803 million yuan (YoY-2.5%) and a gross profit of 487 million yuan (YoY + 1.2%). The gross profit margin rose from 58.4% in the same period last year to 60.7% in the same period this year. In the first half of the year, the GMV generated by merchants through likes solutions reached 48.1 billion yuan (YoY + 4%), with 19054 new paying merchants.
The company's operating data are rising steadily, and its performance is basically stable.
4. The new products are gradually launched, and the company's focus is shifted to medium-sized customers: you Zan has launched two vertical industry solutions: praise Industry and you Zan Education, which will help the digital transformation of American chain stores and educational institutions, and is expected to further open up the growth space. In the future, the company will gradually shift its focus to medium and large customers with stable renewal and considerable GMV, providing in-depth services such as consulting / marketing / customization to help the company maintain steady growth.
Income by business: the revenue from 21Q2's subscription solution business is 251 million yuan (YoY-4%,QoQ-2%); the revenue from merchant solution business is 133 million yuan (YoY + 29% QoQ-4%); and the income from other businesses is 3 million yuan (YoY- 38% QoQ-22%).
Income by type: the income of 21Q2's third-party payment service is 68 million yuan (YoY + 8% QoQ + 8%); the income of merchant service business is 316 million yuan (YoY-18% QoQ-10%); and the income of other businesses is 2 million yuan (QoQ-4%).
Gross profit of sub-business: gross profit of subscription solution realized by 21Q2 is 191 million yuan (YoY-5% YoY QoQ + 0.7%), gross profit of merchant solution is 51 million yuan (YoY-23%, QoQ-6%), gross profit of other businesses is-70000 yuan (YoY-105%, QoQ-113%).
Expenses: 59% of 21Q2's sales and marketing expenses (YoY + 20pct, QoQ+9pct), 20% of general and administrative expenses (YoY + 5pct, QoQ+ 3pct), and 5% of other expenses (YoY + 19pct QoQ + 9pct).
Operating profit and profit margin: 21Q2 company's operating profit is-255 million yuan (YoY + 74% GAAP QoQ-31%), GAAP net profit is-108 million yuan (YoY-139%, QoQ-18%).
2. Business data analysis:
(1) the GMV generated by GMV:21Q2 merchants through liked solutions reached 24.5 billion, an increase of 900 million over the previous quarter.
(2) the number of stock payment merchants: the number of 21Q2 stock payment merchants reached 87457, a decrease of 8235 compared with the previous quarter.
Risk hints: macroeconomic growth is declining, market competition is intensified, industry growth is not as expected, policy risks, realization rate and gross profit margin are lower than expected, new business expansion is lower than expected, business over-diversification, lack of coordination, insufficient operating funds, profits fall short of expectations, and so on.
