Ali And Wang Sicong, Who Actually Misread The "Net Red Business First Share", Such As Culvert

Claiming to be "net red business first share", such as Han holdings is a network of red incubator and marketing platform backed by Ali. Since IPO, it has been questioned continuously. It has been repeatedly criticized by Wang Sicong. It broke down on the day of listing, and the market value evaporated 70% in two months.

In June, 13 days before the US stock market, such as Han holdings released the latest financial results, the first quarter net loss of 29 million yuan, narrowed 53.3% compared to the same period. The share price rose 23% after the earnings announcement.

GMV grew by 81.3% over the same period, and the losses narrowed sharply.

In the first quarter of 2019, the amount of GMV was 648 million 300 thousand yuan, an increase of 81.3% compared with the same period last year. Net income was 237 million yuan, an increase of 20.7% over the same period last year. This part of the growth came mainly from the increase in service revenue under the platform mode.

In terms of cost, the first quarter sales and marketing expenses of the company were 47 million yuan, up 38.5% from the same period last year, mainly due to the increase of net red incubation, the increase in the cost of content production and training, and the increase in advertising activities supporting the red sales of the company network.

Gross profit in the first quarter was 56 million yuan, an increase of 30.5% compared with the same period last year, with a gross margin of 23.5%, representing a slight increase over the same period last year of 21.7%. It is mainly due to the increase in the proportion of service income with higher gross interest rates, but some of the discounted sales of clothing and cosmetics have offset some of the increase. The company's net loss was 29 million yuan, narrowing 53.3% compared with the same period last year.

The road ahead is getting harder, and the three nets hold up half the sky.

At present, such performance is mainly derived from Zhang Dayi's head net red. As shown below, in the 2019 fiscal year, the GMV of head net red was 1 billion 530 million yuan, accounting for 53% of the total GMV.

Such as the net red under the banner is divided into three grades, head net red, mature net red and new net red, this division is based on their carrying capacity. In fiscal year 2019, the number of companies signing the contract red increased from 83 in the previous fiscal year to 128, but the number of red pages in the head remained unchanged.

Source: company earnings, Huasheng securities

This situation of excessive dependence on the red web of the head is quite dangerous. The net red and the shops that carry the main traffic will suffer great losses if they send negative news.

Transformation from proprietary mode to platform mode

The company's main revenue growth in the fourth quarter came from service revenue, mainly because the company is spanforming some of its outlets from proprietary mode to platform mode. In fiscal year 2019, the number of self operated online stores decreased from 86 in the same period last year to 56, and the number of net red in self operated mode decreased from 33 in the same period last year to 14.

Source: company earnings, Huasheng securities

The spanformation of this model must also be based on the fact that the public has been tired of net red and the liquidity of new net red is not strong. Therefore, the company intends to retain only the self operated shops with strong capacity of head net red and mature net red, while other unstable traffic shops change platform mode step by step, and obtain stable income by collecting service fees.

This method is a good choice in the present. In the short term, there will still be some net red eager to sign the contract platform, but when the net bonus is completely gone, and the store income is not enough to pay the service charge collected by the platform, the company will have to find another way out.

epilogue

Overall, such as Han holdings made a good achievement, the market is also quite recognized, the share price rose more than 20%. At present, the net bonus period is not yet over, investors can pay more attention in the short term. But as the market is gradually saturated and the public's aesthetic is improving, it is uncertain how long the net economy can last.