Exclusive Dialogue guoqing: Electrical business Spring and Autumn Unified is a dream

Absrtact: Has been underestimated by the capital market when, this time gave the market a big surprise. Just a few hours ago, the NYSE-listed company Dangdang announced Q2 's quarterly earnings for June 30, 2014. Earnings figures show two-quarter dangdang to achieve total revenue

has been underestimated by the capital market when, this time gave the market a big surprise. Just a few hours ago, the NYSE-listed company Dangdang announced Q2 's quarterly earnings for June 30, 2014. Earnings data show that the two-quarter Dangdang total Revenue (GMV) for 3.3 billion yuan, including clothing, such as platform business to 1.43 billion, continue to maintain a strong growth of 82%, the same period to achieve a net profit of 28.8 million yuan, a record high value. Net profit rose 26.8 million per cent in the first quarter of this year (2 million earnings) and achieved 14 times times growth. Shows a healthy growth track that has entered a continuous profit. The same period last year was a loss of 64 million.

Second quarter profit led the first half of 2014 Dangdang net profit breakthrough 30.8 million yuan, after the listing of the first year (2010) full-year profit. And 2011, 2012, 2013 Dangdang is three consecutive years of net losses, respectively,-228 million yuan,-444 million yuan, and-143 million yuan.

It is noteworthy that Dangdang is also three consecutive quarters to achieve a "business" profit-the elimination of interest income after the main business is still profitable, this shows that Dangdang has really returned to profitability track. And in the first quarter of the earnings analysis forecast when the two-quarter net revenue amounted to 1.942 billion yuan.

In the second quarter, Dangdang's operating performance continued to show a high growth trend, exceeding Wall Street expectations.

Platform business continues to grow high apparel turnover exceeds 50%

Earnings show, Dangdang two-quarter clothing day hundred other Third-party platform transactions to achieve 1.43 billion yuan, an increase of 82%, growth and scale continue to lead a large book business, but also higher than the industry average growth rate.

The second quarter Dangdang continued to exert a large force of clothing category, in the PC and mobile end of the synchronous launch of "New Flash purchase" channel, strengthen the clothing sales business, including Cardanton, Cardin, the United States, Granville, south of the cloth, such as the first line of outstanding brands also in the current quarter.

The figures show that apparel category trading is growing faster than the platform, with a two-quarter scale exceeding 50% of overall platform turnover.

The second quarter of the book business to achieve revenue of 1.356 billion yuan, compared with the same period last year 43.5%, net profit margin than the United States excellent products, creating a mature category of high growth myth. Easy view data show, Dangdang online book retail share continues to climb, the leading position basically can not shake. From this point of view, guoqing the year before the establishment of the "troika" strategy has achieved good results.

Gross profit margin and innovation high wireless service upgrade fast

Earnings show, Dangdang two quarter fine operation level continued to improve, margin continued to maintain a small steady growth in high, up to 18.3%, this is the highest value in three years, but also since 2013 Q1 Dangdang gross profit margin for six consecutive quarterly stability in more than 17%.

Dangdang wireless business in the two quarter to obtain rapid upgrade, the number of mobile phone users nearly 1 million, June wireless orders accounted for 22%, peak more than 35%, in the integrated electric business in the lead.

Dangdang continued to profit, high growth behind the solid operation and good growth, but also let the capital market watching mood reversed. Dangdang's share price continued to rise since May, up 77% per cent as of August 13. Citigroup also recently set Dangdang's rating as "buy".

The Motley fool, a well-known U.S. investment website, wrote that, compared with the only products, Beijing-east and other electric dealers on the market value of tens of billions of dollars, Dangdang is currently in a serious underestimate the value of the state. "Dangdang is currently in a profitable healthy growth phase, there is no debt problem, it is recommended that investors consider investing in this stock." ”

Fat Cat Exclusive Dialogue Dangdang CEO Guoqing:

Fat Cat: Two quarterly earnings are blind, what do you think?

Guoqing: Q2 earnings overall exceeded the expectations given at the end of the quarter. This is the phased success of this year's overall strategy.

2014 we developed a proactive strategy, one is the channel sinking and delivery speed to achieve the fastest industry, 1800 counties and cities to achieve door-to-door delivery and door-to-door refund, 234-line urban logistics speed has exceeded the Beijing-east, clothing and other platform business 80% also replaced by the industry's fastest downwind;

The second is the wireless big speed up, April we set up a new wireless division, my own leader, both internal and external recruitment elite to create 400 wireless flagship, in the two quarter to get a good harvest, July wireless orders accounted for a large increase in the June, wireless services in the old electric business has been in the temporary leading position.

Three is the initiative to fight price war, "price butcher" nature, not only books, clothing, baby, department stores, 3C small appliances, we all adhere to the lowest price of the net, directly challenge the boss. Although the merchant complained, but as long as the consumer steals the music on the line;

Four is to improve the packaging, improve satisfaction. Input 20 million, the industry's only for all boutique book stickers, put 10 million special transit box, and 3-4 more than all the use of cardboard boxes (opponents are plastic bags or paper bags), merchandise transportation and express in the wear significantly reduced, customer satisfaction corresponding significantly improved.

These are down-to-earth work, invisible efforts, not marketing gimmicks, not short-term shows. But it is so that Dangdang can win long-term sustainable healthy development.

Fat cat: At the end of 2012, you put forward the concept of the troika, and now get a generous return, in the future when the business structure is how to set up? Books, clothing, mother and child of their respective positioning is what? Which one can you watch?

Guoqing: Dangdang will continue to adhere to the category strategy does not waver: books and clothing is the target category, one has been very solid, one in three years to strive for the industry first or second; outside of these two target categories, we are also actively nurturing pregnant babies, home textiles and other competitive categories, when the time is ripe will also promote the transformation to the target category.

Fat Cat: Wireless Services This time gives a good performance, the future on the wireless line, when there are new ideas?

Guoqing: Next step will continue to speed up the wireless end of product development, user experience, marketing, will explore with the PC end of different subversive play.

Fat cat: When will the future enter the Internet financial sector?

Guoqing: We are actively studying and we will not consider it for the time being. The current electronic business of the internet finance is not a real financial innovation, in addition to Alipay, other financial products such as finance, public financing, and so on, only the traditional financial products repackaging, does not constitute the real competitiveness of the electrical business. Dangdang Focus on the network retail, how to let the price of goods lower, users buy more convenient, more rich category, this is the most concerned about the user, but also the most focus of the electricity business.

Fat cat: What are your expectations for the three quarter? What do you think of the current electricity market? What do you think is the ideal status of China's electricity market in the future?

Guoqing: Dangdang will continue to maintain rapid growth, may be some data no other electric business more dazzling, but we have been adhering to a few principles, not to make the financial results look good to do the fake: one is determined not to brush the volume of turnover, we developed an order cheating system, did not launch business to encourage the return of the Second, the pursuit of customer quality and real users, we adopt the industry's most stringent new customer calculation method to maximize the prevention of false new customers! From Dangdang new customer unit price can be seen, a book accounted for more than 40% of the electricity quotient of what customer unit price so high ah? Even non-book, the customer unit price is higher than the opponent 30%, is because the false new customer is very few. Third is the site traffic, do not buy fake traffic and low quality flow, so Dangdang flow ranking is not in the forefront, but the conversion rate in all sites first.

The Chinese retail market space is too big, the commodity category is too complex, the user level and the demand is too dispersed, the Warring States warlords are the normal, the spring and autumn Unified is the dream.

I believe that China's electricity industry will be more and more "law-abiding", more and more attention to customer experience, more and more benign competition, in their respective areas of advantage and category to do a good job of service, mutual interaction, like Dangdang and the day cat, and store 1th has established a good mutually beneficial cooperation.

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According to when the first quarter results showed that the company's total revenue (including Third-party platform GMV) 2.85 billion yuan, an increase of 53%; net profit of 2 million yuan, net loss of 72.7 million yuan in the same period last year, losses. Net revenue of 1.736 billion yuan, an increase of 30.1%.

Main financial data:

Net revenue: Net revenues amounted to 1.7358 billion yuan (about 279.2 million U.S. dollars), up 30.1% year-on-year. Media products revenue of 1.1517 billion yuan (about 185.3 million U.S. dollars), an increase of 33.3%.

Gross margin: Gross margin of 18.2%, the same period last year and the previous quarter were 17.2% and 17.6% respectively. Operating profit: Operating profit of 10.1 million yuan (about 1.6 million U.S. dollars), accounting for about 0.6% of total net revenue. Operating loss of 80.4 million yuan in the same period last year, accounting for about 6% of total net revenue.

Net profit: Net profit of 2 million yuan (about 300,000 U.S. dollars), accounting for about 0.1% of total net revenue. Net loss of 72.7 million yuan in the same period last year, accounting for about 5.5% of total net revenue.

Turnover: Market business transactions amounted to 1.186 billion yuan (about 190.8 million U.S. dollars), an increase of 103%.

Number of users: Dangdang 2014 in the first quarter of fiscal year, about 8.6 million active users, including about 2.8 million new users, year-on-year growth of 16% and 17% respectively. The total order for the quarter was about 16.4 million, an increase of 11%.

Wen/Fat cat Mengmei