Orchid Pavilion Set potential stock price instantly fell from heaven into hell

Absrtact: Orchid Pavilion Set potential (LITB. NYSE) landed in the U.S. market once, but after the company submitted its first report card after the IPO, the market value of a small foreign trade power company shares instantly fell from heaven into hell. The 2013 year of the Monday announced the second

Orchid Pavilion Set potential (LITB. NYSE) landed in the U.S. market once, but after the company submitted its first report card after the IPO, the market value of a small foreign trade electric Company shares instantly fell from "paradise" into "hell."

Orchid Pavilion in Monday released the second quarter of 2013 earnings report, the company's second-quarter net revenue of 72.2 million U.S. dollars, an increase of 52.6%, the chain down 2%, orchid Pavilion set potential for the second quarter net profit of 600,000 U.S. dollars, the same period last year net loss of 1.4 million U.S. dollars, although the year-on-year decline 75%.

As the two quarterly revenue and the three-quarter outlook are less than expected, the company's shares immediately attracted overseas investors to sell, local time in Monday as the closing price plunged nearly 40%, Tuesday, a sharp low, as the time of yesterday 22:30 reported 11.59 Yuan/shares, plunged 39.86%, within two days, the share price is now halved

Ice Fire Double Day

As an important index of the foreign investors ' evaluation, the first announcement of the performance of LAN Pavilion after the IPO has suddenly "changed face", which immediately broke the confidence of the market and led to a sharp decline in valuations.

In spite of a sharp increase of 53% to $72.2 million trillion in revenue this quarter, it is far less than the market's expected $7580 trillion, and even more lethal is the company's expected revenue growth in the next quarter, with only 68 million ~7000 million dollars. The rising cost of the company in the second quarter is also a matter of concern.

"By this reckoning, it is not clear that the next quarterly loss may be predictable." A US fund manager told the first financial daily that "of course it was a bit surprising that the decline was so big." Even if the short-term appears oversold rebound market, but in the long run, this stock value needs to be revised. ”

Another market analyst said, because the Orchid Pavilion is just an IPO, the current liquidity is relatively small, stock price ups and downs will be relatively easy.

In June this year, the Orchid Pavilion set a strong landing on the New York Stock Exchange, became the first in 2013 only in the U.S. stock market listed in the shares. The company, which has been on the market in the capital markets since its listing, has surged to the satisfaction of investors, with the company's shares rushing to $23.38 trillion, worth more than $1 billion trillion, on August 14.

Continued growth is being questioned

The share price performance of the pavilion will be given a big exclamation point, but from the company's own business performance, it is worth the investors to throw a big question mark.

"Overseas investors are more concerned about the size of the company's growth, not just the profitability of the company," he said. "said a foreign trade research person to the correspondent.

From the 2012 three quarter to 2013 two quarterly earnings, net revenue year-on-year growth of 82%, 96%, 99%, 53%, the chain growth rate of 8%, 27%, 13%,-2%.

"The company's earnings performance in the last four quarter and the first quarter of this year may have been financially operational, leading to this ' growth ' seemingly thriving." "But for a newly listed company, it is a bad sign that the first reported revenue and net profit are falling by the chain," said the electric-business researcher to reporters. and wedding as Orchid Pavilion set potential main business line, in theory, summer belongs to the clothing sales business soared, compared with the first quarter, its decline highlighted.

The concept of "global sourcing, selling to the world" sounds really attractive, but it may not be "reliable" in practice. The world is not a completely free market, the middle of the policy is not open. And with the rising of domestic human cost, the appreciation of RMB leads to the enormous pressure on China's export, which is not ideal for the whole foreign trade market.

There are too many issues to deal with in terms of payments, logistics, and so on, the business researcher said, leading to an offsetting advantage of the Internet's relative offline sales mechanism, for example, when one or two items were sent to Europe, saving time but adding to costs.

Another from the business model, Orchid Pavilion is the main sales business are from outside China's customer procurement, its market prospects are mainly dependent on foreign macroeconomic situation and consumer habits. "Europe as the largest collection of orchid pavilion overseas market, even if the European economy began to rebound, consumption increased, no brand premium space, the lack of mainstream consumer groups, will become the Orchid Pavilion set potential business development bottlenecks." "The foreign trade's business-talk researcher told reporters.

In addition, foreign trade consumer competition is increasingly fierce, such as ebay, Amazon, such as the international power business has also occupied a certain market share. In essence, the Orchid Pavilion set potential more or rely on marketing to bring traffic, user stickiness is not high, leading to high marketing costs.

"The company needs to take into account external conditions, a strong response from competitors to the company's IPO, and a crackdown on the orchid pavilion by slashing prices and jostling for traffic," the chief financial officer of the Pavilion said last night on a earnings call, but the company believes that these competitive actions are unsustainable.