Dangdang returns to profit track: platform business grows rapidly

February 28 News, the United States NYSE listed companies Dangdang (Nyse:dang) yesterday announced the fourth quarter of December 31, 2013 earnings. After 9 quarters of losses, Dangdang finally return to profitability track.

Achieve "real" profitability

Since the first quarter of 2011, under the fierce competition of the electric business industry, Dangdang began to lose money and lost 9 consecutive quarters.

The latest earnings show that Dangdang "real" realized the profit. After the removal of interest income, the main business achieved 1.2 million of dollars in profits.

Dangdang can gradually return to profitability track, thanks to the company's refined operating level continues to improve. Through such operations, Dangdang gross profit margin to maintain stability.

In the quarter, Dangdang's gross profit margin reached 17.6%. This data means that Dangdang's gross margin has been rising for 10 consecutive quarters since the two quarter of 2011.

In the case of revenue growth and gross margin, it is not surprising that Dangdang can make a profit.

In fact, in the past 5 quarters, Dangdang's operating conditions are improving, the loss of the extent of narrowing, if Dangdang can continue to maintain such a business situation, the sustainability of profitability should not be a problem.

New business growth is strong

Why is it that Dangdang's profitability is likely to last? The strong growth of the company's platform business continues, in addition to a big increase in Dangdang's proprietary business.

In the fourth quarter of 2013, Dangdang Media products revenue of 1.1951 billion yuan (about 197.4 million U.S. dollars), the year-on-year increase of 27.9%, commodity revenue for 677.5 million yuan (about 111.9 million U.S. dollars), the year-on-year increase of 12.8%; Other revenue is 99.3 million yuan (about 16.4 million U.S. dollars), Rose 24.9%.

Dangdang's proprietary business has achieved robust growth, while the overall growth of the platform business is still strong, year-on-year revenue growth of 154%, of which the core of clothing, baby category growth over the overall growth of the platform, clothing category sales have accounted for more than 50% of the platform GMV.

According to current growth rate, it is expected that the 2014 Dangdang clothing single category sales will be expected to surpass books.

Dangdang estimates that the first quarter of the 2014 fiscal year growth of 30% per cent year-on-year, in part because the book distribution business exempt from 13% value-added tax, and the market business GMV is expected to grow 100% year-on-year.

Analysts believe that Dangdang's profitability will continue as business growth can be guaranteed and the gross margin is stable.