Only goods will share price performance let the electricity business circle chilling

March 23, Brand discount electronic products will be VIPS. NYSE) landed at the NYSE, closing at $5.5, down 15.38% from its IPO price. By the close of March 28, the share price was 4.5 dollars, and fell nearly 20%.

Only the stock price performance, so that the expectation of "in-stock" warmer people hope to be frustrated, perhaps the electric business circle particularly chilling. Previously, the U.S.-listed electric business unit Dangdang and Macaulay 2011 performance at the same time face: Dangdang 2011 years of operating income of 3.619 billion yuan, an increase of 59% per cent, Net profit from 2010 31 million yuan profit into 229 million yuan losses; Macaulay 2011 years operating income of 218 million U.S. dollars, compared with the 2010 228 million U.S. dollars a slight decline in the net profit from the profit of 4.444 million U.S. dollars into a loss of 33.263 million dollars.

Company operating difficulties, capital markets in the cold winter, PE, VC, such as "blood supply" to the electricity dealers cautious, when this scenario, a large number of electrical companies pay more attention to the operational efficiency of operating capital, and strive to spend less money more affairs. And only the financial indicators, a "negative" indicators are also interesting.

In the only product of the road performance materials, management is to emphasize the company's operating capital requirements low, the advantage of Quick capital turnover: "Due to the low margin of stock advance, sell goods can be returned to suppliers, inventory turnover fast, so that only goods will be operating capital requirements are relatively low, capital turnover fast, capital turnover period (= Inventory turnover days + Accounts receivable turnaround days-accounts payable turnaround days) in shortened, 2009, 2010, 2011 respectively 67 days, 8 days,-14 days. ”

"-14 days" is not easy, this means that, before payment is made to the supplier, the goods will have sold and Hu Qing the goods, and may even enjoy the early payment discount from the supplier, which is very similar to the legendary "class finance", where the retailer can take the money of the supplier to do business. Only the 2011 operating level loss of 33 million U.S. dollars, but the operating activities generated 1.3 million U.S. dollars net cash flow, which is an important reason. If you have been able to do so, with the only product will be the expansion of sales scale, its suppliers to occupy the funds will be like a snowball roll the bigger, can effectively ease the operating losses on the capital chain pressure.

Only goods will fund operation efficiency promotion, a lot of factors, such as the beginning of their start-up and supplier cooperation, the need to pay their suppliers 10%-15% of the goods mortgage costs, to be stable cooperation relationship, you can not pay the mortgage charges, but the use of consignment model, that is, the right to return the supplier A product sales 3-5 days after the next shelf, the rest of the inventory can be returned. Among them, the increase in the number of days due to accounts payable is crucial, from 58 days in 2010 to 2011 96 days. Comparable data is that the only goods in 2011 to achieve revenue of 227 million U.S. dollars, an increase of 597.1%, accounts payable from 8.304 million U.S. dollars to 88.02 million U.S. dollars, increased by more than 10 times times!

Retailers can obtain a more favorable accounting period, the most direct explanation is two categories: one is to negotiate with suppliers to enhance the right to speak; one is cash shortages and can only extend payment periods as much as possible. Only the goods will increase the gross margin very quickly, from the 2010 9.8% to 19.1%, mainly because the only product will and more and more brands directly set up a cooperative relationship (2009-2011, respectively: 76, 411, 1075), resulting in reduced procurement costs. From this point of view, only the bargaining position of the goods will be more favorable, not to mention, 227 million of the sales to more than 1900 brands, in terms of individual brands, the average business size, not sell the inventory to take home, how many suppliers would like to wait for a few months to get the money back?

Some good people found that only the cash and cash equivalents of the goods would offset the bank loans, the cash flow is only 32.24 million U.S. dollars, With a 2011-year operating cost of $150 million trillion, its existing net cash limit can only maintain its 2.5-month operation, which makes people speculate that only the goods will be so good in 2011 performance, is the supplier to help the expedient? Are the so-called operating capital requirements low and sustainable? If money turnover slows down and profitability is not rapidly improved, then the net cash flow from operational activity will turn negative and fall back into "blood loss", where is the change?

In fact, as long as the business model, market position, operational efficiency and other conditions match, the enterprise can go "negative capital turnaround period model", for example, group buying mode has obvious cash operating advantages, but once the business level can not be profitable, long-term eventually inevitably fall into the "blood loss" dilemma.

For example, in 2011, the operational efficiency of Macquarie funds improved slightly, 2010 inventory of 35.81 million U.S. dollars, 2011 to 31.386 million U.S. dollars, accounts receivable (including related party accounts receivable), accounts payable from 11.149 million, 5.839 million dollars down to 8.916 million and 4.724 million dollars, if the unified sales revenue as turnover, the use of "capital turnover period = Inventory turnover days + accounts receivable turnaround days-accounts payable turnover days" formula, The turnaround period fell from 66.6 days in 2010 to 59.5 days, but the improvement was a drop in the bucket compared to huge losses, while Mecoxlane spent more than half the cash and cash equivalents of $86 million trillion in 2011, now only 40 million dollars.

To make things worse, some electric dealers have slowed down their capital turnover in the cold winter. Dangdang as an example, its inventory from 2010 to increase the 897 million yuan to 2011 1.583 billion, accounts receivable, accounts payable from 18 million yuan, 866 million yuan to increase to 67 million yuan and 1.486 billion yuan, the capital turnaround period from 2010 to 6.8 days to 2011 16.6 days, fortunately, Dangdang still holding cash for 1.372 billion yuan.

If the electricity dealers can not achieve the "from the negative" profit, even if the only product will be such "-14 days" capital turnaround period, still will die in this winter, is falling into the fall of the group buying site is the best proof.