The total net revenue for the second quarter was 154.4 million USD

Absrtact: Chairman and CEO of the Board of Directors, Chen Au August 20, Nyse:jmei released the unaudited results for the second quarter of fiscal year 2014 as at June 30. The report showed that the total net revenue for the second quarter was 154.4 million U.S. dollars, more than 108.8 million dollars in the same period last year.

Chairman and CEO of the board of Directors Chen Au

August 20 News, Poly-Mei (Nyse:jmei) released the fiscal year ended June 30 in the second quarter of 2014 without the audit earnings. The report showed the total net revenue for the second quarter of the company was 154.4 million U.S. dollars, up 41.9% from 108.8 million US dollars in the same period last year; the net profit for ordinary shareholders was 15.4 million dollars, up 10 million from the same period last year.

After the release of the earnings, the founder of Poly-Mei Products, Chairman and CEO of the Board of Directors, Chen Au, Gao Meng, Zheng, and other executives attended the subsequent conference call to interpret the financial results and answer the analyst questions.

The following analysis is the main part of the question and answer session:

Credit Suisse analyst: In the second quarter, poly-US excellent products exclusive authorized sales of goods and high-end brand product business revenue accounted for? What are the future trends? In addition, poly Beauty in the apparel business strategy what? What groups are the target users?

Gao Meng: At present, the United States exclusive authorized sales and high-end brand merchandise revenue for our cosmetics product sales contribution is 20%, the total sales of the company accounted for more than One-third, we expect the contribution of this business will continue to grow.

On the second question, the current poly-United States apparel Business by the third party in the United States shopping mall, in the future we may consider self-employed part of the clothing business, mainly high-end and brand-name goods, the purpose is to better ensure genuine and product quality.

The clothing business to gathers the United States the total sales contribution proportion still is very big, the clothing product's order amount is bigger, the user's duplicate purchase rate even is taller than the beauty product. So we think that clothing business and cosmetics have the opportunity of cross-selling, we will not set specific targets for the development of apparel business, we believe that the United States in the development of apparel business while increasing the market share of cosmetics, that is, the expected future apparel business contribution to total sales may exceed 50%, But the growth in the apparel business is incremental and cosmetic sales will not be affected, in short, these are our strategies.

Credit Suisse analyst Wei: Can you tell us about the difference between the apparel sales business and competitors?

Gao Meng: The diversity strategy of the beauty clothing business is mainly determined by the characteristics of our users. First, the United States mainly serves female users, while global data show that women consume more than 70%, compared to other platforms that focus on women, the average number of people in the United States is actually younger and more stylish, In other words, when the season's fashion brand in the United States sales is very good, rather than to rely on the sale of seasonal products. On the whole, the difference of our clothing business positioning is mainly determined by the special user group of the United States.

JPMorgan analyst: Among the 5 million active users in the second quarter of the United States, how many users from the first-line, two-tier, or smaller cities? What are the different strategies for developing users in different levels of urban development in the future?

Gao Meng: In the second quarter, we had a good growth in the number of users from the three or four-line cities, and the proportion of users to total users grew in the first quarter, with sales from three or four-line city users reaching 51%.

The user development strategy aspect, has been, gathers the United States in the television advertisement aspect to be better, the television advertisement is very effective in the three or four line city obtains the user.

Oppenheimer Analyst: Your average order amount in the second quarter increased by 18% over the same period last year, a big increase in year-on-year growth in the first quarter.

Gao Meng: The average order amount in the second quarter increased mainly for two reasons, one is due to changes in the postage policy, the second quarter before the user to buy two items or above can be free of postage, the second quarter we adjusted to 159 yuan for free postage, the adjustment is to reduce the small orders; user orders will generally spell to 159 yuan The second reason is that the clothing product per single amount is higher than the cosmetics average, along with the clothing product sales ratio enhancement, our average order amount also increases correspondingly.

Standard Chartered Bank Analyst: Can you introduce the current competitive situation? What is the growth of the sales of Poly-Mei cosmetics in the second quarter? How does it compare with sales growth in the cosmetics business of Beijing and Tokyo?

Gao Meng: The market competition in this field has been very intense, and there is no change in the near future, with the sale of cosmetics sales business after the listing, we are more transparent financial situation you can own inquiries. It turns out that the cosmetics electricity market is not a price war alone can enter.

The growth in cosmetics sales in the second quarter of the United States was between 30% and 40%, about 35%, slightly higher than the industry average, that is to say, our market share is still increasing. Although some competitors are growing in number of users, we note that their average cosmetic sales per customer is declining. Cosmetics are also very special in an industry, the strategy of poly-beauty products, at least in this year and next year, is to introduce as many as possible more exclusive brands, enhance the competitive advantage.

Standard Chartered Bank analyst: The second question about poly-US marketing strategy, your money in this area has been very effective, so in the future you will be in marketing and competitors to take different strategies? Before the IPO, did you use the founders to speak for the company and continue to do so after the listing?

Gao Meng: Marketing, we have been doing very well in content marketing, think that spending the same money in an advertisement to convey different information to the user, the return on investment will be very different. After the listing, the future content marketing will still be the core strategy of poly-beauty, even more important, we are also making this kind of new content, founder Chen Au Image will continue to be included in the advertisement.

Chen Au: In the future, we will also be in the mobile end of user access to spend more market costs, in the past, Poly-Mei marketing is mainly aimed at the overall brand promotion, and many of our competitors will focus on the user access.

Standard Chartered Bank analyst: I have one last question, and this is the question that many investors have been asking for the last one months, and that is, how loyal is Chen Au to the company as the founder and largest shareholder of the United States? Do you intend to run the online cosmetics electric dealer for a long time? Do you hold company stocks for a long time?

Gao Meng: Chen Au is still working all day, and Chen Au mentioned in the roadshow before the IPO that it's harder to get a company from billions of market capitalisation than it was when it started, because it contained a lot of opportunity costs and Chen Au was very loyal to the cause.

Standard Chartered Bank analyst: I'm glad to hear you have a public confirmation on this matter.

Barclays Capital analyst: The first question, can you tell us about the cosmetics business in the income of the absence of off-season season? Would it be a normal situation for your active users and total orders to be flat on the ring last year and in the two quarter of this year?

Gao Meng: For cosmetics, the first quarter and fourth quarter are generally the season, because the two seasons are relatively dry, the second quarter and three quarters is generally off-season, because the relative humidity is relatively large. However, in fact, the seasonal distribution of cosmetics is very easy to change because of a market activity, so factors such as seasonal climate and marketing activities will affect sales.

Barclays Capital analyst: You have disclosed a forecast for this year's net profit, will this be the future of every Fortune report? Can you make forecasts for your annual revenue or sales?

Gao Meng: Unlike other electric dealers, our net profit is mostly from exclusive products and private brand business, so we can easily make a net profit forecast based on earnings. In the future, we will keep the forecast form in line with this time.

Bank of America-Merrill Lynch analyst: Did any recent media coverage of the sale of fakes by third party sellers of the United States have any impact on you? What kind of response did you take?

Gao Meng: This matter in the short term, there is a negative impact on the public relations, our website traffic has a slight decline, but is now recovering, we mentioned earlier, as a response to this matter, we suspend the United States third party Mall in the entry-level accessories and apparel luxury products sales. Although we have been very strict audit measures, but in the future we will still consider the independent operation of certain accessories and apparel luxury products category, to ensure that authentic and quality.

Days Hao Capital analyst: The first question is, how much is the percentage of total sales in the US mobile end? Which mode do you sell best in the mobile end, boutique sale, flash purchase or third party mall market?

Gao Meng: In the second quarter, our mobile-end sales accounted for 53% of the total sales, which grew in July and August, and the mobile-side boutique selling model contributed more sales. (Wooden language)