Original link: https://www.latepost.com/news/dj_detail?id=1288
Bubble Mart Wang Ning: Trendy Play Anti-Cycle
Bubble Mart’s global flagship store recently opened its soft opening in Shanghai. The store is located on Nanjing East Road Pedestrian Street in downtown Shanghai, opposite the Apple Nanjing East Road store. The “main store” has a business area of more than 500 square meters, and the shape of the door is Bubble Mart’s best-selling SKULLPANDA Night City series this year. This IP made 400 million yuan for Bubble Mart in the first half of the year.
However, due to the epidemic, 43 Shanghai stores, including this store, were closed for nearly two-thirds of the time in the second quarter, and their overall performance was inevitably affected. According to the latest data released by Bubble Mart on August 25, many major financial indicators fell to varying degrees in the first half of this year.
- Revenue growth slowed down, up 33% year-on-year to 2.36 billion yuan;
- Bubble Mart previously disclosed that the revenue in the first quarter increased by 65% to 70% year-on-year. Haitong International estimates that the year-on-year growth rate of revenue in the second quarter of this year may slow down to single digits for the first time;
- Note: The growth rates of Bubble Mart’s revenue in the past four years were 226%, 228%, 49%, and 79%, respectively.
- A good trend for companies is the success of a diversified IP strategy.
- SKULLPANDA, released in 2020, is the IP that contributed the most revenue this year.
- In the same period last year, DIMOO’s revenue share has been the same as MOLLY’s.
- CEO Wang Ning believes that in the current fashion play is still a fast-growing industry, because it is an anti-cyclical industry, “people will buy toys when they are happy and unhappy.”
Although the focus of Bubble Mart’s revenue has gradually shifted to online, offline revenue still accounts for 39%. And 42% of retail stores and 32% of robot stores are located in first-tier cities – Shenzhen, Shanghai and Beijing experienced more severe outbreaks in the first half of this year. Bubble Mart mentioned in the financial report that 324 robot stores and 133 retail stores across the country will be closed for a week to three months.
- 91 of Bubble Mart’s 215 retail stores in mainland China (80 less than at the end of 2021) are in first-tier cities.
- There are a total of 1,477 robot stores (403 less than at the end of 2021), with 473 in first-tier cities.
Due to the closure of the store, there is no income, but the store rent and employee wages still have to be paid, resulting in the net profit of Bubble Mart in the first half of the year fell to 376 million yuan, and the net profit rate fell to 15.9% (under non-IFRS calculation). In the past three years, this figure has exceeded 20%.
- In the first half of the year, Bubble Mart’s marketing expenses increased by more than 60%, of which advertising expenses doubled. But advertising expenses in the second half of the year will not shrink.
- Rising raw material and processing costs also weighed on margins.
Next, Bubble Mart will sell more and more dolls overseas. For the first time, they disclosed the regional revenue of overseas markets in detail in the financial report. In the first half of the year, Hong Kong, Macao, Taiwan and overseas markets contributed 157 million yuan in revenue, accounting for about 6.6% of total revenue. They expect that the number of overseas retail stores will exceed 40 by the end of the year, and the overseas revenue will contribute more than 10% by the fourth quarter of this year.
- Overseas stores have transformed from a To B-based model to a DTC (Direct To Customer)-based model.
- At present, Bubble Mart has 24 stores in Hong Kong, Macau, Taiwan and overseas markets, and 98 robot stores.
- During the reporting period, Bubble Mart opened its first offline stores in the United Kingdom, New Zealand and the United States.
- According to management on the earnings conference call, the company will accelerate its expansion into Europe and the United States, and it is expected that from 2023 to 2024, revenue in Europe, America, and Asia-Pacific in overseas markets will be flat.
In August this year, the State Administration for Market Regulation issued the “Guidelines for the Standardization of Blind Box Business Activities (Trial) (Draft for Comment)” . The management said at the performance meeting that the company participated in the research process of the opinion draft, and the relevant regulations were within their expectations. (intern Xue Yujie)
Nvidia processors are slow to sell
In May of this year, Nvidia, which had just hit a record high quarterly revenue, expected revenue in the new fiscal quarter to reach $8.1 billion (±2% error), corresponding to a year-on-year growth rate of about 25%. Looking back, Nvidia was too optimistic.
On August 24, local time, Nvidia released its quarterly report as of the end of July, with total revenue only up 3% year-on-year to $6.7 billion. Gross margins were dragged down by costs due to an extra $1.22 billion worth of finished goods and raw materials that were not sold or simply not produced. Nvidia CEO Jen-Hsun Huang said the macro environment is challenging and they are leading supply chain transformation.
- The quarterly revenue completion rate was only 82.7%.
- Nvidia’s gross margin has fallen from 65% in the previous quarter to 43% now.
- Operating profit fell to $499 million, a drop of nearly 80 percent.
The weak gaming business, which once accounted for more than 40% of revenue, dragged down Nvidia’s performance. In the past three months, Nvidia’s gaming business revenue fell by a third year-on-year to $2.04 billion, and the average selling price of gaming graphics cards fell and sales decreased. Nvidia blamed the Russian-Ukrainian conflict, reduced demand in China and fading enthusiasm for cryptocurrency mining, saying “global macroeconomic headwinds have led to a sudden slowdown in consumer demand.”
Huang Renxun said that the next step will be to reduce the number of shipments to suppliers (Sell-in) and adjust prices to reduce the inventory in the sales channel to meet the new generation of products that will be released in September.
Nvidia’s other main source of revenue is the data center business. In the past quarter, sales doubled due to strong demand from North American customers, driving revenue up 61% year-on-year to $3.81 billion. Nvidia said it fell short of expectations — large customers in China, internet companies slowed down infrastructure construction, offsetting some of the growth. But Jen-Hsun Huang added at the earnings call that the slowdown (of major Chinese customers) will not last forever.
- Note: Jen-Hsun Huang warned of the pressure in May when he gave guidance for the new quarter.
- Note: About 25.1% of Nvidia’s revenue in the last fiscal quarter came from mainland China.
Nvidia’s performance expectations for the next three months are not optimistic, and the decline of the game business will continue, with total revenue of $5.9 billion, down 17% year-on-year. After the earnings report was released, Nvidia’s stock price fell by more than 3% after the market.
- Note: Nvidia’s stock price has fallen more than 40% this year, more than Intel’s. (He Qianming)
Rising oil prices raise the cost of plastic packaging materials, and Nongfu Spring’s gross profit margin drops to 59%
In the first half of the year, Nongfu Spring’s revenue was 16.599 billion yuan, a year-on-year increase of 9.4%; net profit was about 4.608 billion yuan, a year-on-year increase of 14.8%. Although Nongfu Spring’s revenue and net profit both increased in the first half of the year, the growth rate slowed down significantly compared with the same period last year.
56.3% of the revenue came from packaged drinking water. In the first half of the year, the revenue increased by 4.8% year-on-year to 9.349 billion yuan, and the growth rate and proportion declined.
- The revenue of the tea beverage segment increased significantly by 51.6% to 3.307 billion yuan, accounting for nearly 20% of the total revenue, becoming the main force for performance improvement.
Affected by the rise in international oil prices in the first half of the year, PET, the most important raw material for Nongfu Spring’s product packaging, is a downstream product of petroleum. The continued rise in prices has led to an increase in production costs. Nongfu Spring’s gross profit margin decreased by 1.6% year-on-year to 59.3%.
- Nongfu Spring’s cost of sales in the first half of the year increased by 13.9% YoY to RMB 6.761 billion.
- As a “porter of nature”, water is basically free of cost. The core cost of Nongfu Spring’s drinking water business is in PET, corrugated paper and other packaging materials. Since last year, the continuous increase in PPI has caused its gross profit margin to drop by nearly 2-3 percentage points. . (Intern Zeng Xing)
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China CDFG’s secondary listing of Hong Kong stocks breaks intraday
On the day of listing, CDFG was delayed to open in the afternoon due to a typhoon. It fell by more than 24% at the opening and closed at HK$158. Established in 1984, CDFG is the world’s largest travel retail operator and the company with the largest number of tax-free licenses in China. The company’s current A-share market value is 377 billion yuan.
- In 2021, CDF China will account for 24.6% of the global travel retail industry market share and about 80% of the Chinese market share. In the past three years, CDFG’s operating income was 48.013 billion yuan, 52.598 billion yuan and 67.676 billion yuan respectively.
CDFG’s recent performance is not satisfactory. Affected by the epidemic, the company’s revenue and net profit in the first half of the year both fell by more than 20% year-on-year. CDFG said that the number of outlying islands in the Hainan market dropped by nearly 40% in the first half of the year, resulting in a sharp year-on-year decline in the passenger flow of the company’s duty-free stores, especially in Hainan. At present, the outbreak in Hainan, an important market of CDFG, in August is expected to affect its third-quarter results.
In November last year, CDFG held a listing hearing on the Hong Kong Stock Exchange, but on December 4, CDFG decided to suspend the issuance and listing of H shares due to factors such as the epidemic and the downturn in the capital market. The market environment of the Hong Kong Stock Exchange has not changed significantly this year, and the size of the IPOs of the Hong Kong Stock Exchange in the first half of the year was less than one-tenth of last year’s . UBS analysts believe that the listing of CDFG may inject a booster into the sluggish Hong Kong stock market, and also have a positive impact on the issuance of later projects. (intern Xue Yujie)
OTHER NEWS
The Hang Seng Technology Index surged 6% on August 25.
It was the biggest one-day gain for the Hang Seng Technology Index since May 3. Major constituents Alibaba (+8.75%), Meituan (+8.04%), Tencent (+4.84%), JD.com (+11%) and Bilibili (+10.26%) all rose to varying degrees. Some market participants speculate that the optimism may come from the positive development of the audit issue of China concept stocks.
ZTO Express plans to raise 6 billion yuan.
ZTO Express plans to issue RMB 6 billion of convertible senior notes due in 2027. The proceeds will be used to enhance the scale and capability of the logistics business, invest in the logistics ecosystem, corporate working capital and other general corporate purposes. If the convertible notes are converted into shares, it will dilute the interests of existing shareholders. After the announcement, the share price of ZTO Express fell by nearly 10%.
- On the same day, Zhongtong released its second quarterly report, revenue increased by 18% to 1.29 billion yuan, and operating profit increased by 36.44% to 18 million yuan.
Apple will hold its first offline conference since the outbreak of the new crown pneumonia.
Apple sent an invitation to the media for the September 7th (September 8th, 1:00 am Beijing time) conference, a week earlier than the traditional fall conference. If Apple ships a new device about a week and a half after it launches, as it has done before, it could add two weeks to its July-September iPhone sales, boosting its single-quarter revenue. Analysts expect Apple to unveil new iPhones at the conference, possibly a new Apple Watch and AirPods.
Seven Chinese entities are placed on the U.S. export control list.
According to a notice issued by the U.S. Department of Commerce on the 23rd, the United States added seven Chinese-related entities, mainly related to aerospace, to its export control list, citing “national security” and foreign policy concerns. These include 771 Institutes of the Ninth Research Institute of China Aerospace Science and Technology Corporation, and 772 Institutes of the Ninth Research Institute of China Aerospace Science and Technology Corporation.
- Note: The “Entity List” and “Military End User List” are export control tools created by the U.S. government, and companies listed on the list will be restricted from cooperating with U.S. companies.
Mengniu Dairy’s revenue growth slowed in the first half of the year, up 4% to 47.7 billion yuan.
In the first half of the year, Mengniu Dairy achieved a net profit of RMB 3.8 billion, an increase of nearly 30%. During the reporting period, Mengniu Dairy’s ice cream business grew rapidly, increasing by 30% to RMB 3.9 billion. Affected by the epidemic, Mengniu’s online channel revenue growth was better than offline channels. During the reporting period, Mengniu Daojia’s business revenue increased by more than 30%.
It is reported that Tesla’s Berlin Gigafactory will operate 24 hours a day.
This means that the Berlin Gigafactory will start a 24-hour all-day production plan. Currently, the factory’s production time is from 6:30 in the morning to 10:30 in the evening, with two shift production teams responsible for producing 1,200 to 1,500 Model Ys per week. After the introduction of the three-shift system, the plant’s production is expected to increase to 5,000 vehicles per week by early 2023.
A total of 141 infected people have been reported in this round of epidemic in Chongqing, which is still in the developing stage.
- On August 24, 345 new cases were confirmed in the mainland, 217 in Hainan, and 37 in Tibet; 1,289 new asymptomatic infections were reported in the mainland, including 521 in Tibet, 309 in Hainan, and 154 in Xinjiang.
- Hainan added “217+309”, and Sanya added “170+250”.
- Chongqing added “27+16”. A total of 141 infected people have been reported in this round of epidemic, which is still in the development stage.
- A total of 10.3219 million people were tested for nucleic acid sampling on the 24th, and a total of 2 mixed tests were found to be positive, both in Tongjiaxi Town, Beibei District.
- From 0-14 on the 25th, Tibet added “18+196”.
- Tibet will include families and individuals in distress due to COVID-19 into the scope of temporary assistance.
- There were 6 new cases of local asymptomatic infections in Shanghai. From the 25th to the 27th, Pudong carried out a “3-day 2-check” for all employees.
- On the 25th, one new case of local diagnosis was reported in the Yangpu District of Shanghai, and the trajectory involved hotels and restaurants in multiple districts.
- A mother in Shanghai asked a friend to do the nucleic acid test for her son, and three people were fined for disrupting the nucleic acid testing order.
- Xinjiang added “13+154”, the new positive cases in a single day began to decline slowly, and the epidemic was initially under control.
Costs impacted profits, and Wuling Motors lost over RMB 80 million in the first half of the year.
In the first half of the year, affected by the shortage of chip supply and the epidemic, the three main businesses of auto power system, auto parts and commercial vehicles all declined to varying degrees. Revenue decreased by 12.4% year-on-year to 6.275 billion yuan, with a net loss of 80.545 million yuan. In addition, gross profit margin decreased by 24.5% year-on-year due to higher production costs such as batteries and other components. In the first half of the year, Wuling Motors sold about 434,000 units, of which Hongguang MINIEV sold 196,000 units, becoming the sales champion in the domestic auto market.
Aier Ophthalmology’s net profit in the first half of the year increased by 15.73%.
Aier Ophthalmology’s revenue in the first half of the year was 8.107 billion yuan, a year-on-year increase of 10.34%; net profit was 1.291 billion yuan, a year-on-year increase of 15.73%. In terms of sub-business, the refractive project segment has the most revenue, exceeding 40% of the total revenue, and its gross profit margin also ranks first among all projects, reaching 57.69%. In addition, as of June 30, Aier Eye has 187 domestic hospitals, 132 outpatient departments, and 115 overseas eye centers and clinics.
The security business suffered a setback, and SenseTime’s revenue fell by 14% in the first half of the year.
In the first half of this year, SenseTime’s security-related business (smart city, smart business) revenue dropped by 30% year-on-year to 1 billion yuan. SenseTime said the epidemic affected revenue. Revenues from selling solutions to industries such as mobile phones, healthcare, and education and the automotive business grew by 98% and 70%, respectively, recovering some of the decline. In the first half of the year, SenseTime’s revenue fell 14% year-on-year to 1.4 billion yuan. However, due to the increase in marketing and R&D expenses, the loss of SenseTime increased by 59% year-on-year to 3.42 billion yuan. SenseTime said that the security-related business has been recovering since June, and the promotion will be accelerated in the future.
The performance of travel companies in the first half of the year was generally under pressure, with a net loss of 58.5706 million yuan in Mount Emei.
In the first half of the year, Emeishan’s revenue was 232 million yuan, a year-on-year decrease of 33%, with a net loss of 58.5706 million yuan. In the first half of the year, the total number of visitors to Mount Emei was 885,700, a year-on-year decrease of 39.28%, of which the number of visitors in the second quarter dropped by over 70% year-on-year. Affected by the epidemic in the first half of the year, the number of tourists in the scenic spots decreased greatly. Before that, many tourism companies such as Huangshan Tourism, Lijiang Shares, and Zhangjiajie had pre-lost in the interim report.
Some international students and foreign business people can enter China without a visa.
Recently, a number of Chinese embassies in foreign countries have issued notices that from 0:00 on August 24, Beijing time, holders of valid APEC business travel cards and international students with valid residence permits for study can enter the country with the above-mentioned documents without re-applying for a visa. The APEC Business Travel Card is a visa facilitation measure among the economies of the Asia-Pacific Economic Cooperation. Cardholders can freely travel between economies with a valid passport, and can stay for 60-90 days each time.
Thai instant noodles have risen in price for the first time in 14 years.
According to media reports, on August 24, the Ministry of Commerce of Thailand announced that it would increase the price of instant noodles by no more than 1 baht (about RMB 0.19) per pack, the first price increase in the country in 14 years. In Thailand, instant noodles have long been a staple of low-income households, so prices are subject to government control, and Commerce Ministry officials stressed that producers need to lower prices accordingly after costs have fallen.
Text | Intern Xue Yujie Intern Zeng Xing He Ganming
Editor | Gong Fangyi
The title picture comes from the movie “Bird Watching Year”
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