Event: The number of active buyers in 20021Q3 reached 867 million, an increase of170,000 from the previous month, slightly lower than the 872 million expected by Bloomberg. In the third quarter, the revenue was RMB 26,543.8+506 million (+565,438+0% year-on-year), which was lower than Bloomberg's general forecast of RMB 26.474 billion. Excluding the sales revenue of 1P business, the e-commerce platform business increased by 55% year-on-year (more food-buying income was included in commission income), which was lower than market expectations. Non-GAAP net profit attributable to the mother was 365,438 yuan +0.5 billion yuan, a year-on-year increase of 675%, and Bloomberg unanimously expected it to be-364 million yuan.
Part I: Overview of financial data.
User growth slows down at a high base.
Number of buyers: 3Q2 1 active buyers increase 1740 Wanda 867 million (Ali increased by 3.5 million Wanda 863 million this quarter, JD.COM increased by 20 10 Wanda 52 million, and Pinduoduo was the largest platform for buyers), and the number of new buyers reached1360,000. Because the number of users is not growing as fast as Ali&; JD.COM。
Monthly activities: 3Q2 1 average monthly users 742 million, an increase of 300,000 month-on-month and 98 million year-on-year. Monthly activity/number of buyers: user stickiness continued to increase, and MAU/AAB reached 85.5%, down from the previous month and 2.5% year-on-year.
The liquidity of unit users is constantly improving: we measure the liquidity of unit users by the annualized number of (advertising+commission income)/active buyers, so the annual number of active buyers of 3Q2 1 brings 93. 1 yuan of revenue/year to the platform, and yoy+55.7%.
Advertising revenue is lower than expected.
3Q2 1 quarterly revenue yoy+5 1% to 21500 million yuan (we had expected 29.6 billion yuan), of which:
-1P: the revenue is 82 million yuan (we had expected 3.24 billion yuan), 1Q2 1 revenue1960,000 yuan; (1P business is temporary and transitional, which meets the demand that 3P business can't meet, so the income will fluctuate. )
-Fei 1P(3P+ buying more food): the total income is 21400 million yuan, yoy+5 1%. Among them, advertising revenue is 65.438+0.795 billion yuan, yoy+39% (our previous forecast was 22.55 billion yuan); Commission income is 3.48 billion yuan, yoy+ 16 1%. In addition to the growth of the main station GMV, there are also income contributions from buying more food.
Costs and expenses
Gross profit margin: 3Q2 1 gross profit margin is 69.5% (compared with 77. 1% in the same period last year), and the decrease in gross profit margin is mainly due to: 1) 1P business; 2) The warehouse allocation cost of purchasing more vegetables increases.
* If it is assumed that the gross profit margin of 1P business is 0%, then the gross profit margin of 3P and Buy More is 69.8%;
The sales rate dropped sharply: 3Q2 1 sales expense input1kloc-0/100 million yuan (flat year-on-year, the growth rate was much lower than the income growth rate, and the sales expense decreased by 340 million yuan month-on-month). The sales rate of non-GAAP was 44.9%, compared with 68.5% in the same period last year. If the non-1P revenue is used as the denominator of rate calculation, the non-GAAP sales rate is 45. 1%. Pinduoduo has not invested too much in the promotion of Q3.
* Calculate the customer acquisition cost: average customer acquisition cost = annualized S &；; M fee /AAB, 55.96 yuan/person, slightly lower than the previous two quarters; Marginal customer acquisition cost = annualized s&; M/ AAB increased year-on-year, reaching 344. 1 yuan/person, with an increase of 63 yuan from the previous month and an increase in the cost of new products.
Sustained profits, the non-GAAP net profit was RMB 36,543.8+0.5 billion, and the profit rate was RMB 65,438+0.4% (2Q20 profit rate was 3.3%, and the profit was RMB 466 million). If the non-1P income is taken as the denominator, the profit rate will reach 15%.
* If it is assumed that the loss of buying more vegetables is 3 billion, the profit of the main station is over 7 billion, and the profit rate is above 30%.
Operating cash outflow increased by 3Q21; Operating cash inflow was 8.737 billion yuan, compared with 8.322 billion yuan in the same period last year, a year-on-year increase of 50%; At the end of the period, the cash and equivalents were 62.3 billion yuan (including 36,543.8+0.2 billion yuan of restricted funds), the short-term investment amount was 86.8 billion yuan, and the cash on hand was sufficient.
Part II: Review of performance exchange meeting.
CEO Chen Lei
In this quarter, the company's revenue increased by 56,543.8+0% to 26,543.8+0.5 billion yuan, and the number of active buyers increased by 6,543.8+0.74 million to 867 million, with an average monthly user of 742 million, an increase of 300,000 from the previous month and a year-on-year increase of 98 million.
We are very honored to serve our users, merchants and farmers. Last month was our sixth birthday, and we hope to share our growth with all interested parties. I have been CEO for more than a year, and I have also been the chairman since March this year. I am very busy during this period, because this is a transitional period, and I am slowly adapting to this process and everything is back to normal.
I want to share our main strategy with you first. First of all, we should encourage some young managers. The second important strategic adjustment is that we should invest more money in research and development, instead of investing more money in sales and marketing as in the past five years.
The first strategy: how to encourage and promote young talents and introduce young management. Since last year, we have witnessed many young talents and young management begin to take on more responsibilities. These young people showed their core values, that is, how they are committed to serving our users. When the epidemic began to break out and subvert everyone's daily life, many of our young people immediately took action and sent it to users; When there was a rainstorm and flood disaster in Henan, they also took immediate action, hoping to deal with some local outsourcing and logistics services to ensure post-disaster reconstruction and daily material transportation at that time. These opportunities can help everyone and bring benefits to users and the whole society, so we encourage more potential young people to play an important role in the future. Their contribution to the enterprise has exceeded our expectations, and I hope to work with this young team and young people. They have worked in the company for several years and have matured in their existing jobs. Young talents also bring great creativity and continue to bring innovation. We hope that they will play a more important role in the next 6 to 12 months, and we will continue to create some opportunities for them to continuously improve themselves.
We hope to maintain the zero commission plan for agricultural products. Therefore, we will continue to provide agricultural products, geographical distribution and educational projects, such as live broadcast, media marketing and other methods. We hope that more educated farmers will join in, which will really improve agriculture in China.
We also hope to improve the efficiency of the entire agricultural supply chain. The first is to improve the efficiency of localization. The second is to reduce waste. I hope to cut off some unnecessary transformation links in fresh food. In addition, I hope to reduce food loss and food waste. For example, we hope to achieve these goals through algorithms, cold chains and analytical techniques. I hope to make agricultural products better and more people-friendly, while protecting the environment. Thirdly, we hope that agricultural technology, especially upstream agricultural technology, can provide better production efficiency, and the sustainable development of social environment is still valuable. We hope that agriculture will attract the younger generation. Another important point in this field is our intelligent agriculture competition, which shows that it is very important to position agricultural precision agriculture and can help everyone to provide output. Last year's competition was commercialized from the beginning. For example, last year's agricultural science and technology competition was AI planting strawberries, and many catering teams began to commercialize. They provide costs to farmers and businesses. This year, we competed with China Agricultural University and Zhejiang University, and some technical experts started this year's competition. We are constantly expanding the challenges, not only the output, but also the environmental sustainability, commercial feasibility and nutritional value, which are the main criteria of this year's evaluation Committee. There is also positioning precision agriculture. How to use artificial intelligence to grow tomatoes better is a theme this year. Some people from agriculture, computer, science and other backgrounds attended the meeting. They grow tomatoes in a greenhouse base in Yunnan. This is their competition. There are also many people around the age of 20 who have participated in the whole agricultural transformation period. At the same time, we also provide some tailor-made courses and training methods with some world-class agricultural universities to help these young talents or talents make progress together.
Agriculture is a very important and potential industry, which allows young people to introduce technology in the future and cultivate the whole society. Therefore, we hope to use our entire platform and technology to provide more opportunities for young talents to join agriculture, provide technology and provide some ways to improve the entire agricultural supply chain. We invest in agriculture, which is very important and a challenging task. This requires long-term investment and commitment, and of course we will be systematic and patient. We hope we can help the future of more sustainable agriculture and the future of smarter agriculture.
Last quarter, we announced the agricultural scientific research plan of10 billion, hoping to solve some very important needs in agriculture and rural areas. These plans are not carried out in the form of business or pursuit of interests, but hope to promote the digital inclusion of agricultural technology and provide a stronger driving force and a greater sense of accomplishment for agricultural technology-related talents. Some profits in the second quarter, or any possible profits in the next few quarters, will be reinvested in such a billion-dollar energy plan. These profits will also enter the10 billion agricultural research plan in the third quarter. We have won the support of the board of directors and the approval of the board of directors at the end of September, hoping to get the understanding of shareholders. Pinduoduo wants to provide benefits for our community, because we benefit from the support of the community, so we want to repay them, so we are committed to taking on more social responsibilities.
In July, I helped Henan with disaster relief, such as providing some delivery services, especially the delivery of emergency materials. Zhengzhou Pinduoduo has also provided emergency materials delivery, hoping to help them with disaster relief and post-disaster relief together with some local suppliers and suppliers outside Henan Province. In June+10, 5438, we participated in the disaster relief operation in Shanxi, and donated 60 million yuan to help them carry out emergency material rescue operations.
Looking ahead, we plan to do more things and make more contributions to society, and we will continue to help society. We will continue to use some of our resources and platforms to help serve our users, enterprises, farmers and their communities. We hope to do better in these areas. Thank you.
Chief Financial Officer of Ma Jing
We have supported a series of agricultural extension activities, hoping to connect farmers and consumers directly. During the harvest festivals in September and 10, we designed a series of activities to help businesses sell, such as live broadcast and traffic assistance. The number of farmers participating is twice that of last year. We joined the "China GI202 1 Plan" of the Ministry of Agriculture and Rural Affairs and China Green Development Agricultural Products Center, hoping to promote the development of agricultural products and local agriculture and provide high-quality agricultural products distribution for the whole country. We provide platform support and online support, as well as online and offline marketing methods tailored for geographical indication products. Related agricultural orders increased by 279% year-on-year.
We strive to raise people's awareness of the demand for local high-quality agricultural products. In September, we started the Golden Week with major apple farmers and farmers in Shanxi, Shaanxi, Shandong, Gansu, Sichuan and Xinjiang, selling high-quality apples to let people know how apples are planted. Our fruit team stayed in the local area for several weeks, hoping to give full play to the role of the supply chain.
We also cooperate with research centers and colleges, hoping to implement plans related to agricultural products. For example, Zhejiang Industry Standards Research Center intends to implement industry standards on logistics, packaging and production. We hope to help farmers promote products, meet consumers' requirements for quality and service, and establish sustainable business on the platform, so we will also maintain the zero commission policy for agricultural products.
Financial data analysis
On the client side, our users will achieve moderate growth and the scale of users will be large. We believe that there will be diversified and developing user needs in the future, and the task will become more and more arduous. Therefore, we hope that young leaders can constantly serve new users in innovative ways. The growth of total income mainly benefits from the increase of merchant activities and the income brought by online marketing, and the growth mainly benefits from service fee transactions and services related to many dishes. Among them, 1P service is an expedient measure, and its contribution should be smaller and smaller.
The main revenue costs mainly include cloud services, delivery warehousing fees and service fees. The decline in the proportion of sales and marketing expenses shows that our continuous investment in R&D is effective. The increase in R&D expenses is mainly due to the recruitment of more experienced R&D personnel. We continue to strengthen our technological advantages, hoping to achieve sustainable development in the future and meet the constantly updated needs of users. In the future, R&D expenditure will continue to increase.
In August, we announced the "10 billion agricultural scientific research project", hoping to solve the important needs of agriculture and rural areas. The plan will not be driven by commercial interests, but hopes to promote agricultural technology and digital inclusion, and provide a stronger driving force and a greater sense of accomplishment for agricultural technology-related talents. The plan will have an impact on earnings per share in the near future.
Ask and answer. A
Q: The investment in marketing expenses began to change. Has the marketing strategy changed?
A: The marketing release and ROI standards have not changed. With the increase in the number of users and the diversification of user needs, the core is to meet the diversified needs of users. From the first day, Pinduoduo hopes to reach the widest range of users through technical services, so as to achieve universal benefits. In the past, when there were few users, the goal was to attract more users, understand the Pinduoduo platform and participate in platform activities; Now, as the user base becomes larger, more and more users begin to use Pinduoduo. How to make consumers try new categories, gain new experiences, meet the growing expectations of more products and enhance their trust in more products is a new challenge. With the expansion of the user base, it is a challenge for the platform to continuously meet the needs of users, and it is also the task of a new generation of management, which has been exploring and adjusting. In marketing, we will strictly abide by the requirements of ROI, strictly arrange marketing investment and abide by discipline. At the same time, Pinduoduo has been increasing its investment in R&D for the long-term development of the company, which is also the key area of future investment.
Q: Can you provide the latest situation and future development plan of Pinduoduo10 billion agricultural research plan, which will have an impact on the financial report?
A: This project was approved by the board of directors only at the end of September, so it was not reflected in the financial report of the third quarter. After Q2 announced10 billion agricultural research project, it did receive many good projects from the industry. At present, the team is also seriously studying the feasibility.
Q: How do you view the current competition pattern of e-commerce?
A: E-commerce in China is a very big industry and a market full of vitality and potential. With the continuous development of mobile technology, industry infrastructure is constantly improving, and consumer demand is constantly evolving, which is a very dynamic environment; It is logical that more and more platforms and platform-based enterprises join the e-commerce industry.
Recently, a series of regulatory measures are pushing the whole e-commerce industry towards healthy competition and orderly development. More competition will have a long-term positive and positive impact on users, the whole industry and enterprises in the industry. For example, platform-based enterprises, including short video platforms, have entered the field of e-commerce, and these platforms have a huge user base, user frequency and duration. It is not surprising that these platforms have entered the e-commerce industry. Many platforms with huge user base and user activity are entering the e-commerce industry. These are all related to externalities, but the core of enterprise development is to return to itself to understand the value and purpose of existence.
Pinduoduo started out as an agricultural product, meeting the daily basic needs of users, hoping to provide users with the service of rice, oil, salt, sauce, vinegar and tea, which is different from other enterprises. How to serve consumers well, consumer-oriented is Pinduoduo's duty, and he has been thinking about how to continue to serve consumers well through the improvement of his own services; At the same time, has it created value for society, made the environment greener and made development more sustainable? Winning the trust of users and creating value for the society has always been the core strategy of Pinduoduo, and it is also a long-term asset that can be invincible in the competitive environment.
Q: Have the support measures for businesses brought growth to GMV and advertising business?
Q: Is the plan to attract more brands in line with expectations?
A: With the increasing user base and diversified user needs in Pinduoduo, users need more and richer product and brand levels. It will take some time for the brand to enter the platform and develop on it. Recently, the state has issued a series of anti-monopoly policies, which are effective in promoting brands to settle in Pinduoduo.
Brand entry requires brand and platform investment, resource management and time. It takes time to build trust and promote cooperation in the long-term running-in process. In this process, some brands chose Early Believe and settled in Pinduoduo, and gained the first-Mover advantage and reward, thus driving more brands to explore cooperation with Pinduoduo.
Q: What impact has the recent regulatory policy had on Pinduoduo?
A: Recently, a series of policies have been issued to further promote the platform economy and the high-quality development of the industry. Pinduoduo has always supported and supported industry-related policies and resolutely implemented the Guiding Opinions. The industry changes brought by supervision have driven many companies in the industry to actively seek changes and constantly optimize. Pinduoduo actively takes this opportunity to help enterprises further standardize.
Q: The service of 1P continued to decline in the third quarter. What are the plans for the future service of 1p?
A: As 1P service is not a strategic focus, it is not expected to make a big profit contribution.