The customer base of SaaS stores continued to improve, maintaining the "buy" rating company disclosed that in the mid-2021 report, 1H21 operating income was 803 million yuan, down 2.5% from the same period last year, with a net loss of 199 million yuan; 2Q21's single-quarter operating income was 386 million yuan, down 14.4% from the same period last year, with a net loss of 108 million yuan and a loss of 139.2% year-on-year. Considering that the likes business is related to GMV, Kuaishou Technology's customer churn and small and micro enterprises are affected, GMV growth falls short of expectations, and each business income and net profit are reduced. Segment valuation method: 1) subscription solution: estimated 21-year revenue of 1.612 billion yuan (previous value 1.793 billion), 21E 18x PS, corresponding to HK $1.04; 2) merchant solution 21E net profit of 225 million yuan (previous value 279 million), corresponding to 35.9xPE, corresponding to 0.29 Hong Kong dollars (previous value: 0.36 Hong Kong dollars, 36 times) 3) the net profit of other business 21E is 47 million yuan (previous value 116 million yuan), which corresponds to HK $0.12 (previous value: HK $0.29, 36 times) to 35.9xPE. Add up to the target price of HK $1.44, "buy".
Launch of Zanxin retail brand, store SaaS continues to promote
In the first half of 2021, revenue from like subscription solutions reached 508 million yuan, an increase of 6.8% year-on-year and 4% year-on-year growth to 48.1 billion yuan. Among them, the GMV growth rate of Kuaishou Technology / non-Kuaishou Technology is-45% and 34% respectively, and the growth of GMV of non-Kuaishou Technology channels makes up for the decline of Kuaishou Technology's GMV. In addition, stores account for 25% of SaaS GMV, making it an important part of GMV. From the perspective of customer structure, 1H21 added 19054 customers, store SaaS customers accounted for 32%, year-on-year increase of 22%, stock customers 87457, store customers accounted for 18%, year-on-year increase of 10%, store SaaS customer base continues to expand. With the launch of Youzan's new retail brand and the further improvement of its service to offline customers, we believe that store SaaS may become an important driver of Youzan subscription solution business.
The service capacity of major customers is further enhanced, and the unit price of customers is expected to gradually increase. The GMV of 1H19/1H20/1H21 single customers is RMB 320000 / 460000 / 550000 respectively, and the GMV created by single customers continues to rise. In addition, 1H21's overall ACV (average contract amount) reached 12811 yuan, up 8% from the same period last year. The company continues to strengthen its ability to serve major customers, launch ONE strategy, jointly with system service providers to provide online and offline data fusion services, and provide consulting, marketing and other services for major customers. In addition, the company launched the K100 program to provide long-term service to some of its head customers. We believe that with the continuous enhancement of the company's key customer service capacity, the customer unit price is expected to be further improved.
Actively promote new retail business and maintain "buy" rating
1H21's loss expanded year-on-year, mainly due to the company's increased investment, sales expense rate, management expense rate, other operating expenses rate (mainly R & D expenses) increased by 13.3%, 5.8% and 12.3% respectively. We believe that as Youzan actively promotes the new retail business, it is expected to further increase the unit price of customers in the future.
Risk hint: the market competition intensifies and the digitization process of merchants is lower than expected.