The Zhitong Finance App learned that BOC Securities released a research report stating that it maintains the “buy” rating of Le Enjoy Group (06988). The Group released its 2022 annual performance forecast. Revenue in 2022 is expected to be no less than HK$3.7 billion, with a year-on-year increase of no less than 165.1%. 2023-24 is a critical period for overseas e-commerce businesses to gain market. It is expected that gross margin will increase with diversification of categories, and marketing and distribution channel subsidies will gradually decrease, but overall investment is still large.
According to the report, the company expects overseas e-commerce revenue to be no less than HK$3.09 billion in 2022, accounting for 84% of total revenue; Q1/Q2/Q3/Q3/Q4E sales were HK$512/5.10/908/08/1,161 million respectively, and Q4 revenue was +685.3% year on year and +27.9% month on month. The company's TikTok e-commerce business in Southeast Asia continues to seize market share. In order to gain more first-mover advantages, starting with 22H2, the company cultivated the user's habit of placing orders online through traffic and physical subsidies to dealers, and attracted more distribution channels to join, leading to a faster increase in sales expenses.
The bank mentioned that the company officially started the TikTok e-commerce business starting at 21q4. The main market is in Southeast Asia. The region's per capita income is growing rapidly, and e-commerce development is still in the early stages. In particular, there is broad space for short video e-commerce. The company built its own traffic model, payment system, etc., and accurately obtains traffic from TikTok through interest algorithms, and users are redirected to the dealer's independent website page to place orders. The products sold are mainly domestic mobile phones. Currently, local dealers are responsible for overseas warehousing and logistics distribution. The company plans to introduce more high-margin categories such as headphones in 2023, and will also enhance profitability by creating its own 3C brand products in the future.