Dangdang only profitable for a quarter, for more than two years has been a loss

Since the IPO in the United States, Dangdang (DANG. NYSE) has only been profitable for a quarter and has been losing money for more than two years. Dangdang's co-founder and executive chairman, Yu, is "still grossly undervalued by investors".

In a recent "Chengdu-Global Wealth Forum", Yu accepted the "first financial daily" interview, said that by the end of this year, Dangdang's size is much larger than before the listing, but for the profit she did not expect.

Dangdang was listed at the end of 2010, and the stock price was also higher. 2011 years later, the electricity business industry competition is fierce, Dangdang also faces the intense competition in the product price, from the profit toward the loss. But in this case, I feel that the [capital] market is overreacting and that our value is grossly undervalued. "Yu said.

When the closing price ended yesterday was $7.52 trillion, even though it was about one times higher than the lowest 3.68 trillion dollars, it was still a big drop from the top price of 35 dollars 2 years ago, with a market value of around 600 million dollars.

Many investors "vote with their feet" is not unreasonable, after the first quarter of 2011 profit, Dangdang did not "earn money." The losses were most severe in the second quarter of 2012, with $129.8 million in the 122 million and 2011 years, although the net profit of 72.71 million yuan in the first quarter of 2013 seemed to have improved, but it would be difficult to make short-term profits.

And Yu's stance, I am afraid it is difficult to make Dangdang's existing investors satisfied, "in the realization of profitability, we will not do a particularly big effort." If you want to make a profit, I think we need to see the new product line. When there is a certain scale, the enterprise can be profitable. This depends on each product line. I'm not going to do a six-or two-year timetable. ”

Another factor in keeping Yu and Dangdang teams from changing their current profitability is that their cash situation may be good.

"We financed 200 million dollars in 2010, and by the end of this year we had about 1.3 billion yuan in net cash." We are very concerned about the assets, liabilities, enterprises need to have a safety valve. We are also concerned about inventory, receivables and payables. Moreover, the 1.3 billion funds will allow the operating team to develop product line calmly, if there is no such fund reserves, the team's heart is not the same. ”

In the face of recent frequent acquisitions by peers, Yu said: Dangdang is also looking at the target (acquisition) company, but did not determine the big investment. ”

Recently, Dangdang on-line a "tail goods sinks" channel, appears to be strong to join the "tail goods discount" in this market segment. The capital markets seem to have a lot of interest in "tail-goods discounts", such as VIPS. NYSE) is not a long time in the U.S. market, its market value has reached 1.8 billion U.S. dollars, is 3 times times the Dangdang.

But Yu stressed that "the tail goods market will not account for the large proportion of Dangdang department store category." Everyone's demand for clothing is too different: Some people are very hot, need new products, and some do not care, over season products can also buy. Dangdang is still a collection of clothing, baby, books and other integrated stores. ”