Orchid Pavilion Performance has not been favored by the market, overseas only product will be successful is still a mystery

After the announcement of the fourth quarter and the full year of the 2013, the response of the capital markets was still a sell-off, with the shares tumbling 12.55% per cent on the day after the earnings report and 8.99 dollars. Although the quarter and full-year revenues of the pavilion have exceeded the average expectations of Wall Street analysts, it is not so good to turn from earnings to persistent losses.

A brief review of the performance of Lan Ting over the past year, the three quarterly net revenue growth was 82%, 96%, 99% respectively, the first report after the listing, that is, in the second quarter of 2013, only 53% of the increase in revenue growth is less than the market expected 75.8 million dollars, leading to the day of the stock price Above。

The ensuing third-quarter results, which were forecast for the two quarter, were expected, but only 33.4% per cent of the growth in the year was not pleasing to investors, and for the first time, a net loss of 2.4 million dollars, with a net loss of only 1 million U.S. dollars in the same period, plunged 23.05% Conservative 7.68 dollars, the lowest share price history (up to 23.88 U.S. dollars).

Objectively speaking, for LAN Pavilion's fourth quarter earnings, many investors have been psychologically prepared: although the revenue of 78.8 million dollars to achieve the expected, but the growth rate of only 21.6%, net loss of 5.6 million U.S. dollars, the same period last year net profit of 1.1 million U.S. dollars, and the next quarter of the year-on-year growth rate is only 6%-9%

Such a report also caused a plunge in share prices, but it was better than the previous two, with shares falling only 12.55% per cent on the day.

As for why Orchid Pavilion after the listing of lower performance, the main reason is the wedding dress competition at home gross profit margins, increasing marketing costs and logistics costs, especially in the wedding dress category in the IPO at one time reached 40%, but once fell to the first quarter of 26.6%, But this quarter's clothing category revenue is not down to a year-on-year increase of 12.9% to 21.1 million U.S. dollars.

Especially hidden in the earnings of a group of data: in the fourth quarter of 2013, revenue growth was mainly apparel and mobile performance, the total order volume of 2 million, an increase of 61.5%, the number of users to buy goods 1.6 million, year-on-year growth of 42.5%, repeat the purchase of user orders accounted for the total revenue of 37%, A year earlier, the ratio was only 28%.

In fact, the Blue Pavilion clothing category in the wedding business is not a good trend, but why the clothing category will have such a big reversal? The executives did not make a clear statement, either in the Orchid pavilion earnings or in the conference call after the earnings.

If carefully observe the Orchid Pavilion page lightinthebox.com, the last quarter of its quietly launched "Flash Sale" channel, which with the past Orchid Pavilion to do its own brand of different styles, but the imitation of the goods will be done "flash", the difference is the domestic tail goods sold abroad.

This means that the pavilion has sold a step forward in the development of the platform, especially as it is understood that the big increase in apparel category in the fourth quarter was mainly from the flash-purchase platform. In addition, in the mobile end, Orchid Pavilion also launched the platform with the app "Sale Clock", and in the company all departments to mobilize the main staff to promote the development of flash business, see Orchid Pavilion in this respect.

"Overseas only Products" is clearly a very good concept, to see only the goods will be listed since the soaring share price, although also experienced institutional shorting, but the price of the company's strength reached more than 110 U.S. dollars, the valuation reached about 6.5 billion U.S. dollars. At present, the value of the Orchid Pavilion is only about 440 million dollars.

For the Orchid Pavilion, the former clothing category model is customized, on demand, but now is the clothing sales, but because similar to the only product will model, can not sell off to suppliers, inventory risk will be relatively small. At present in the Blue Pavilion Flash sale category including clothing, jewelry and bags and so on, the average discount of more than 75%, still walk is made in China low prices.

However, the above brand than the only product will be too many small, there are few big brands, for LAN Pavilion, Cross-border Logistics, warehousing, return exchange is still a big problem.

And from the profit contribution, the Flash sale is still very small, also can not solve the blue pavilion facing the marketing costs, logistics costs are too high, but gave Lan ting an imaginary space.

On the earnings call, some analysts raised questions about the expected growth rate of 6% to 9% in the next quarter, which is already the lower limit of the company's previous revenue growth range, and is expected to be explained by management.

Mark, the senior executive who introduced the pavilion through mergers and acquisitions, said a meaningful phrase: "The wedding barber business is still weak, although the first quarter will be better, but it is estimated that the first quarter of the company will face serious challenges, but estimated revenue growth in the second quarter of the year will accelerate."

"Overseas only goods will" this concept and business can reverse Orchid Pavilion, now it is difficult to give an accurate answer, the best way is to wait for the next quarter orchid pavilion earnings figures, if there are outstanding performance, then the Orchid Pavilion may be out of the depressed stock price.

Company Profile:

Orchid Pavilion Set Potential was founded in 2007, is an E-commerce company, its lightinthebox.com is China's domestic well-known international trade website. The company has more than 800 employees in Beijing, Shanghai, Suzhou and Shenzhen.