​Meituan reduced subsidies and bought 19.6 billion more wealth management; Chinese and American regulators signed an audit and supervision cooperation agreement

Original link: https://www.latepost.com/news/dj_detail?id=1289

Meituan reduced subsidies and bought an extra 19.6 billion yuan in wealth management

On August 26, the market value of Meituan’s Hong Kong stock market closed back above one trillion Hong Kong dollars. Not long after, Meituan released its second quarterly report that turned losses after adjustment.

However, this time, the market cannot calculate which business has achieved the greatest marginal improvement, because Meituan has once again reduced the caliber of financial report disclosure, and no longer separately discloses the revenue and cost of takeaway and in-store and wine travel. They merged with Meituan flash sale, ticketing and other businesses into “core local businesses”.

• Note: From the first quarter of this year, Meituan stopped publishing the transaction amount of food delivery and in-house hotel business. In the fourth quarter of last year, Meituan adjusted the way it disclosed its food delivery revenue.

“Core local business” revenue rose 9.2% to 36.8 billion yuan in the second quarter. The increase in the number and unit price of flash sales and takeaway orders due to home isolation offset the decline in revenue from the wine travel and in-store business.

Meituan Flash Shopping, which originally belonged to the “new business”, was taken out, and other business segments remained basically unchanged, including Meituan grocery shopping, Meituan Select, Kuaidong, online car-hailing, shared bicycles, charging treasures, etc.

Wang Xing said in the earnings conference call that Meituan Flash Sale and Takeaway have the same users and will benefit from the current delivery network. The company will leverage the synergies between the two businesses, believes in the potential of the market, and believes that Meituan Flash Sale will Over 10 million users.

• This month, it was rumored that Tuanhaohuo, a subsidiary of the Daojia business group, was merged into Meituan Select.
• If so, Meituan may once again usher in a major organizational restructuring.

Last year, Meituan raised tens of billions of dollars through fixed growth and bond issuance. A year later, like a considerable number of its peers, its willingness to expand has weakened significantly. Financing and operating cash flows do not form capital expenditures, but go to banks or other financial institutions.

• As of the end of 2021, the end of the first quarter and the second quarter of 2022, Meituan held 84.2 billion, 74.4 billion and 94 billion yuan (equivalent to 78% cash) wealth management products, respectively.
• Note: Wealth management products include regular savings, large-denomination certificates of deposit and wealth management products.

In the second quarter, Meituan’s operating costs and “three expenses” (marketing, administration, and R&D) accounted for the proportion of total revenue, which fell to a new low of 102.19% in seven quarters (the previous value was 112%).

• The most severe cuts are in market fees. The current expense of RMB 8.986 billion was 17% lower than that of the same period last year.
• Tencent’s market fees have been reduced by 20%;
• Xiaomi’s market fee was reduced by 6.14%;
• JD.com’s market fees decreased by 10.7%;
• Kuaishou market fees have been reduced by 23%;
• Ali market fees were reduced by 5.3%;
• Operating costs increased by 16.41% “with restraint”. If the extreme environment such as the first and second quarters of 2020 is not included, the growth rate has reached a record low.
• Note: Operating costs include Meituan’s self-operated business distribution expenses, procurement costs of goods or services, etc.
• Administrative and R&D expenses maintained similar input intensity as in previous quarters, accounting for about 5% and 10% of revenue, respectively.

When asked how he thought about the recovery of the core business sector, Wang Xing said that as the epidemic gradually fades, the business will perform better, and R&D investment will be strengthened in the second half of the year, but the trend of profit margin changes is currently uncertain.

• In the second quarter, Meituan’s operating loss narrowed to 1.116 billion yuan (previous value -3.356 billion yuan).
• Excluding the impact of equity incentives, impairment provisions and investment gains and losses, the operating profit was RMB 2.057 billion, a year-on-year turnaround. (Gong Fangyi)

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Chinese and U.S. regulators sign audit and supervision cooperation agreement

According to the official news of the China Securities Regulatory Commission, the China Securities Regulatory Commission, the Ministry of Finance and the American Public Company Accounting Oversight Board (PCAOB) signed an audit supervision cooperation agreement on August 26, and the relevant cooperation will be launched in the near future.

According to the China Securities Regulatory Commission:

• The cooperation agreement mainly makes specific arrangements for the two parties to carry out daily inspections and law enforcement investigations on the cooperation of relevant accounting firms, and stipulates important matters such as the purpose of cooperation, the scope of cooperation, the form of cooperation, the use of information, and the protection of specific data.
• Both China and the United States may, in accordance with their statutory duties, conduct inspections and investigations on relevant firms within the jurisdiction of the other party, and the requested party shall try its best to provide adequate assistance to the extent permitted by law.
• The scope of the assistance provided by the Chinese side also involves some Hong Kong firms that provide auditing services for China concept stocks and whose audit manuscripts are stored in the mainland.
• The two sides will communicate and coordinate the inspection and investigation plan in advance. The U.S. side must obtain the audit papers and other documents through the Chinese regulatory authority, and conduct interviews and inquiries with the relevant personnel of the accounting firm with the participation and assistance of the Chinese side. (Gong Fangyi)

Perfect Diary’s parent company’s revenue in the second quarter fell 37.6% year-on-year

On August 25, Yixian E-commerce released its second-quarter performance report, with revenue of 951.8 million yuan, a year-on-year decrease of 37.6%, and a net loss of 264.3 million yuan; gross profit fell 40.3% to 598.3 million yuan.

The company attributed the decline in revenue to a decline in makeup revenue. In the second quarter, the net income of makeup brands including Perfect Diary, Little Odin and Pink Bear decreased by 50.5%.

• Under the influence of the epidemic, the domestic demand for color cosmetics has generally declined. According to the National Bureau of Statistics, the total retail sales of consumer goods in the second quarter fell by 4.6% year-on-year, and the retail sales of cosmetics fell by 22.3% and 11% in April and May, respectively.
• However, there are still structural opportunities in the industry. Proya, which released its financial report on the same day as Yixian E-commerce, reported a revenue of 2.63 billion yuan in the first half of the year, a year-on-year increase of 36.9%; a net profit of 300 million yuan, a year-on-year increase of 31.3%, and an overall gross profit margin of 68.1%.

The skin care business grew rapidly, with revenue of 318 million yuan, a year-on-year increase of 49.2%. Among them, the net income of DR.WU Darfur, EVE LOM and Galénic increased by 112% year-on-year.

• Huang Jinfeng, CEO of Yixian E-commerce, said at the performance meeting that the gross profit margin of skin care products is higher than that of makeup, and the proportion will be increased in the future. In the second quarter, the proportion of revenue from the skin care segment increased from 13.9% in the previous year to 33.4%.

For beauty companies, gross profit is subsidized sales minus commodity production and transportation costs. Includes personnel salaries, but not marketing costs. And Yixian e-commerce has always been the most questioned about light research and development, and the marketing cost is too high.

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• In the second quarter, sales and marketing expenses were 625.7 million yuan, accounting for 65.7% of revenue.
• Research and development expenses were 32 million yuan, a decrease of 3.2 million yuan compared with the same period last year, accounting for about 1/20 of marketing expenses.

In addition, Yixian E-commerce gave similar performance guidance as in the second quarter. It is expected that the revenue in the third quarter will be between 740 million yuan and 870 million yuan, a year-on-year decrease of about 35%-45%. (Intern Zeng Xing)

NIO’s mid-size sedan sales target for BMW 3 Series

At the Chengdu Auto Show, NIO President Qin Lihong said that the sales volume of the mid-size sedan ET5 surpassed that of the BMW 3-series fuel car “there is no problem”. At present, the monthly sales of BMW 3 series are 10,000 units, and NIO delivered 12,961 units in June. Qin also made several other observations:

• The Hefei Xinqiao plant has a production capacity of 300,000 vehicles, and is currently only used for ET5 production. The second car will be put into production in the second half of next year.
• Going overseas to Europe has the advantage of dimensionality reduction, and this year it has entered Germany, Denmark, Norway, Sweden, and the Netherlands.
• A few years ago, when the electric products of BMW, Mercedes-Benz and Audi came out, it was no longer possible to discuss new forces. Now that they have all finished the first round of cards, the disciples do not have to be inferior to the masters. (Wang Hailu)

Sony PS5 price increases by 10%, and the second-hand price in Japan is 70% higher than the guide price

Sony announced that it will increase the price of its PlayStation 5 console in Europe, Japan, China and other major markets by 10% (this price increase does not include its core market, the United States), which has been introduced since 1993, due to inflation and the devaluation of the yen. After the original PS, Sony raised prices for the first time after releasing a product.

• After the price increase, the PS5 version of the National Bank will increase by 400 yuan, the official price of the optical drive version is 4299 yuan, and the digital version is 3499 yuan.
• When the PS5 launched in November 2020, the yen was trading at around 105 yen to the dollar, and since June this year, it has traded below 130 yen.

In June, Sony analyst Pelham Smithers calculated that in the Japanese market, Sony would lose 15,000 yen (about 752 yuan) for every PS5 sold at the original price, affected by rising material costs and energy prices and the depreciation of the yen. The average loss in the global market is about $50.

• In Japan’s second-hand market, the PS5 sells for about 70% more than the official original retail price.

In the second quarter of this year, Sony’s gaming division’s sales fell 2% year-on-year, and operating profit fell nearly 40%. Sony sold 2.4 million PS5s in the April-June fiscal first quarter, after it set a new fiscal year sales target of 18 million PS5s, which is now difficult to achieve.

• In the performance conference, Sony CFO mentioned that the PS5 may increase in price, and said that the current parts shortage and logistics problems are still restricting product sales.
• In the second quarter, sales of Microsoft’s Xbox game console fell 11%, and Nintendo sold 3.43 million Switch game consoles, a 20% decline. (Intern Xue Yujie)

OTHER NEWS

The US stock China Concept Stock Index (KWEB) rose first and then fell on August 26.

• Alibaba, Pinduoduo, Baidu, JD.com, Bilibili and other popular Chinese concept stocks turned down after the opening;
• KWEB rose 5% before the market opened, and all gains have been erased after the opening bell.

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High-end upgrades improve profitability. Tsingtao Brewery posted a net profit of RMB 2.85 billion in the first half of the year.

In the first half of the year, Tsingtao Brewery’s revenue was 19.27 billion yuan, a year-on-year increase of 5.37%; its net profit was 2.85 billion yuan, a year-on-year increase of 18.07%. According to the financial report, the optimization of the variety structure has made the current operating income increase year-on-year. In the first half of the year, Tsingtao Brewery sold 1.66 million kiloliters of mid-to-high-end and above products, a year-on-year increase of 6.6%. At the same time, sales in overseas markets with high prices increased by 21% year-on-year.

Wuliangye’s revenue and net profit in the first half of the year increased.

Although the epidemic in the first half of the year had a certain impact on the liquor banquet scene, Wuliangye’s revenue and net profit in the first half of the year both increased by more than 10% year-on-year, to 41.222 billion yuan and 15.099 billion yuan respectively. In the first half of the year, Wuliangye focused on mid-to-high-priced products. According to the financial report, the eighth-generation Wuliangye has stabilized in the price band of 1,000 yuan, while the classic Wuliangye has made efforts in the liquor market of more than 2,000 yuan.

In the first half of the year, CNOOC’s net profit and net oil and gas production hit a record high for the same period.

As a pure upstream oil and gas exploration developer, the sharp rise in oil prices in the first half of the year significantly boosted CNOOC’s performance. In the first half of the year, CNOOC’s net profit reached 71.89 billion yuan, a year-on-year increase of 115.7%, a record high. Meanwhile, the net oil and gas production was 304.8 million barrels of oil equivalent, of which about 71% came from China.

PetroChina made 82.4 billion yuan in the first half of the year, an increase of half year-on-year.

PetroChina achieved revenue of 1.6 trillion yuan in the first half of the year, a year-on-year increase of 30%, and net profit of 82.4 billion yuan, the best level in history. After the release of the financial report, PetroChina said that its delisting in the United States was mainly based on three considerations. First, the proportion of depositary shares in the company’s H shares and total shares was very small. Second, due to regulatory differences, the administrative burden of listing on the New York Stock Exchange was heavy. Third, Continue to trade on the Stock Exchange and Shanghai Stock Exchange after delisting, which can still meet the needs of investors.

China Life’s first-half net profit fell 38% year-on-year.

In the first half of the year, China Life’s revenue was 528.298 billion yuan, a year-on-year decrease of 4.4%; its net profit was 25.416 billion yuan, a year-on-year decrease of 38%. China Life said the drop in net profit was due to increased volatility in the equity market and a drop in investment income. Specifically, in the first half of the year, China Life’s total premiums were 439.969 billion yuan, basically the same as the same period last year.

Huayi Brothers’ first half net profit fell 281%, with a loss of 192 million yuan.

Huayi Brothers’ revenue in the first half of the year was 212 million yuan, a year-on-year decrease of 63.4%. The net loss was 192 million yuan, a year-on-year decrease of 281.82%, and the net profit has been loss for 4 consecutive years. For the decline in revenue, Huayi Brothers said that it was mainly due to the decrease in film release revenue and theater box office revenue. In addition, while releasing the semi-annual report, Huayi Brothers also released an announcement that shareholders Wang Zhongjun and Wang Zhonglei plan to reduce their shareholdings in the company.

One new case of social infection was reported in Shanghai.

• On August 25, 262 new cases were confirmed in the mainland, 111 in Hainan and 83 in Tibet; 1,239 new asymptomatic infections were reported in the mainland, including 444 in Tibet, 285 in Hainan, and 133 in Xinjiang.
• Hainan added “111+285”, and Sanya added “76+250”.
• The global static management time of Dongfang City will be extended by 3 days to 24:00 on the 28th.
• There were 12 new asymptomatic infections in Hebei, 10 of which were in Shijiazhuang. Nucleic acid tests were carried out in Shijiazhuang for three consecutive days.
• New local cases in Shanghai “1+1”, of which 1 case was found in social screening.
• As of 12:00 on the 26th, the current round of epidemics in Chengdu, Sichuan reported “17+1” cases, all of which were related to a gym and swimming pool.

Customs said there was no substantial change in entry quarantine.

Recently, the General Administration of Customs announced that it will launch the ninth edition of the “People’s Republic of China Exit/Entry Health Declaration Card” at 0:00 on August 31. At that time, nucleic acid test information and previous infection status do not need to be declared. The person in charge of the customs said that the purpose of this revision of the health declaration card is to improve the efficiency of declaration, not to relax the prevention and control requirements, and there is no substantial change in the requirements for entry epidemic prevention and control.

MINISO’s revenue growth in fiscal year 2022 depends on overseas.

MINISO achieved a net profit of 640 million yuan in fiscal year 2022 (July 1, 2021 to June 30, 2022), turning losses into profits. In fiscal year 2022, MINISO’s domestic revenue only increased slightly by 2%. Excluding the revenue contributed by its trendy play brand TOP TOY, the revenue of MINISO brand declined year-on-year. In fiscal 2022, MINISO’s overseas revenue increased by half, accounting for a quarter of the overall revenue. In the quarter from April to June, overseas revenue accounted for more than 30% of the quarter’s revenue.

Shopee Singapore has been bombarded with large-scale breach of contract offers.

Recently, a number of netizens revealed that Shopee Singapore broke the contract offer before employees joined the company. Previously, executives of Sea Group, the parent company of Shopee, announced layoffs. Almost half of the employees of Shopee Food and Shopee Pay in Thailand were affected. Since 2022, Shopee has successively closed its French, Indian and Spanish sites.

BESTORE’s revenue in the first half of the year increased by 10.7% to 4.9 billion yuan, and its net profit increased slightly.

In the first half of the year, BESTORE’s net profit attributable to its parent was 190 million yuan, a slight increase over the same period last year, but after deducting income not related to operations, the net profit attributable to its parent was 130 million yuan, down 17%. In the first half of the year, BESTORE’s costs and expenses increased significantly, operating costs increased by more than 10%, management expenses increased by more than 20%, and research and development expenses increased by more than 30%. BESTORE accelerated the pace of opening stores in the first half of the year, and currently has more than 3,000 stores.

In the second quarter, Manbang’s revenue increased by 43.7%, turning a loss year-on-year.

In the second quarter, Manbang’s net profit was RMB 13 million, turning losses into profits. From the perspective of business structure, in the second quarter, Manbang value-added service revenue increased by 40% year-on-year, and freight matching service revenue increased by half. The company said that the main reason for the increase in revenue was the increase in freight brokerage services and higher transaction commissions.

Gap Group, which lost $49 million in the second quarter, will sell clothing at a discount.

In the three months ended July 30, Gap Group sales fell 8% year-on-year to $3.86 billion, turning a profit into a loss. The Gap Group said its inventory at the end of the second quarter was 37% higher than last year, and that it would deal with unsold clothing through discounts. Earlier, American clothing brands such as Abercrombie also mentioned the problem of declining profits and backlog of inventory, saying that they would sell products at a discount.

Luxshare’s revenue in the first half of the year increased by more than 70% year-on-year.

In the first half of the year, Luxshare Precision, a leading company in Apple’s supply chain, had a revenue of 81.961 billion yuan, a year-on-year increase of 70.23%; net profit was 3.784 billion yuan, a year-on-year increase of 22.49%. Specifically, overseas is still the main sales place for Luxshare’s precision products, accounting for 91% of the current total revenue. This year, Apple Watch was produced in Vietnam for the first time, and Luxshare Precision, which has a factory in Vietnam, will benefit from both China and Vietnam.

Text | Gong Fangyi Intern Zeng Xing Intern Xue Yujie Wang Hailu

Editor | Gong Fangyi

The title picture comes from the movie “Friends”

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