In the second quarter, the net profit of Weipin was $118.5 billion, up 19.3% from a year earlier.

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[abstract] The net profit attributable to commodity shareholders in the second quarter increased 19.3% year on year to 813.5 billion yuan ($118.5 million), higher than 681.6 million yuan in the same period last year, and the net profit rate was 3.6% compared with 3.3% in the same period last year.
According to foreign media reports, the company’s unaudited earnings for the second quarter ended June 30, 2019 were released by the New York Stock Exchange Securities Code (VIPS) after Wednesday trading. According to the financial report, the second quarter net revenue of CPMC was 22.7 billion yuan ($3.3 billion), an increase of 9.7% compared with the same period last year; the net profit of shareholders belonging to CPMC was 813.5 billion yuan ($118.5 billion), an increase of 19.3% compared with the same period last year.
Summary of second quarter results:
In the second quarter, the total net revenue of Weipin reached 22.7 billion yuan ($3.3 billion), up 9.7% from 20.7 billion yuan in the same period last year.
The total number of active users in the second quarter was 33.1 million, up 11% from 29.8 million in the same period last year.
The total number of orders for the second quarter was 148 million, up 33% from 113 million in the same period last year.
The total volume of commodity transactions in the second quarter of the CPC was RMB 35.1 billion yuan, up 11% from RMB 31.6 billion yuan in the same period last year.
In the second quarter, the gross profit was 5.1 billion yuan ($741.3 million), up 25.9% from 4 billion yuan in the same period last year.
In the second quarter, the net profit attributable to the shareholders of the Committee was 813.5 billion yuan ($118.5 billion), up 19.3% from 681.6 billion yuan in the same period last year.
In the second quarter, net profit attributable to Merchandise Committee shareholders was RMB 1.1 billion (about US$154.8 million), up 84.2% from RMB 576.9 billion in the same period last year.
Executive Review
Shen Ya, chairman and chief executive of the Merchandise Council, said, “We are very pleased to have achieved strong operational and financial results by the end of the second quarter of 2019. In the second quarter, the total number of our active customers continued to show a healthy growth momentum, up 11% year-on-year. In addition, we recently announced a strategic acquisition of Sugiyama Business Group Limited to further enhance our ecosystem and explore opportunities for online and offline integration. Since our renewed focus on discounted apparel and profitability, our financial performance and key operational indicators have improved significantly, proving that our strategy is very effective. We are still committed to implementing the sales strategy and further expanding our market share in China’s discount apparel industry. We are confident that we will continue to improve our profitability steadily in the future.
Yang Donghao, Chief Financial Officer of Weipin, said: “In this quarter, our financial performance has grown steadily, and our profitability has increased significantly year by year. In addition, we created a strong free cash flow of RMB 1.2 billion yuan in this quarter, an increase of RMB 2.2 billion yuan over the previous year. We continue to focus on marketing strategies, especially in the apparel-related categories. Total commodity transactions grew by 19% year-on-year in the current quarter. Attention to high-margin apparel categories has enabled us to continuously raise gross interest rates and overall profitability. Looking ahead, we will continue to closely monitor the return on investment of all businesses, especially offline stores. Our goal is to achieve a balance between revenue and net profit growth and to provide long-term, sustainable shareholder returns.
Second quarter financial analysis
revenue
In the second quarter, Weipin’s net revenue reached 22.7 billion yuan ($3.3 billion), up 9.7% from 20.7 billion yuan in the same period last year. The comparative growth of the second quarter’s total net revenue was mainly attributable to the growth of the total number of active users.
Gross profit
In the second quarter, the gross profit was 5.1 billion yuan ($741.3 million), up 25.9% from 4 billion yuan in the same period last year. The second quarter gross margin was 22.4%, higher than 19.5% in the same period last year.
Operating Profit and Expenditure
In the second quarter, the total operating expenditure of the Committee was 4.2 billion yuan ($615 million), higher than 3.9 billion yuan in the same period of the previous year. In the second quarter, the overall operating expenditure rate fell to 18.5% from 18.9% in the same period of the previous year.
In the second quarter, the performance expenditure of the Committee was 2.2 billion yuan ($323 million), compared with 1.9 billion yuan in the same period last year. The proportion of performance expenditure in total net revenue rose to 9.7% from 9.1% in the same period last year.
In the second quarter, the marketing expenditure of Weipin was 877.6 billion yuan (about 127.8 million US dollars), which was lower than 899.6 million yuan in the same period last year. In the second quarter, marketing expenses accounted for 3.9% of total net revenue, down from 4.3% in the same period last year.
The cost of technology and content in the second quarter was 422.3 million yuan ($61.5 million), lower than 510.6 million yuan in the same period last year. In the second quarter of 2019, technology and content costs accounted for 1.9% of total net revenue, down from 2.5% in the same period last year.
In the second quarter, the general and administrative expenditure of the Committee was 706.3 billion yuan (about 102.9 billion US dollars), higher than 615.2 million yuan in the same period last year. In the second quarter of 2019, the proportion of general and administrative expenditure in total net revenue was 3.1%, higher than 3.0% in the same period last year.
In the second quarter, the operating profit of Weipin was 965.4 billion yuan ($140.6 billion), an increase of 141.2% over the same period of last year’s RMB 400.3 billion yuan. In the second quarter, the operating profit margin increased from 1.9% in the same period last year to 4.2%.
In the second quarter, the operating profit not measured by the General Accounting Standards of the United States was 1.2 billion yuan ($171.2 million), up 97.6% from 594.8 billion yuan in the same period last year. In the second quarter, the operating profit margin increased to 5.2% from 2.9% in the same period last year.
Net profit

In the second quarter, net profit attributable to Mercantile shareholders increased 19.3% year on year to 813.5 billion yuan ($118.5 million), higher than 681.6 billion yuan in the same period last year; net profit margin was 3.6% and 3.3% in the same period last year; in the second quarter of 2019, the dilution income of each American depository receipt attributable to Mercantile shareholders was 121.1 billion yuan. The yuan ($0.18) was 0.99 yuan in the same period last year.
In the second quarter, the net earnings due, excluding stock remuneration fees, amortization of intangible assets related to acquisition, and equity investment (not measured in accordance with the General Accounting Standards of the United States), were 1.1 billion yuan ($154.8 million), an increase of 84.2% compared with 576.9 billion yuan in the same period last year. The net profit margin attributable to materialist shareholders is 4.7%, compared with 2.8% in the same period last year. In the second quarter, the diluted earnings per American Depository Certificate of Merchandise Society was RMB 1.58 yuan (about US$0.23), which was higher than RMB 0.84 yuan in the same period last year.
As of June 30, 2019, only 673,241,463 shares of the weighted average U.S. Depository Certificate will be used to calculate diluted earnings per share.
Balance sheet
As of June 30, 2019, the total cash, cash equivalents and restricted cash held by VIP was RMB 7.8 billion yuan (about US$1.1 billion), and the short-term investment held by VIP was RMB 238.3 billion (about US$34.7 million).
As of June 30, 2019, the cash flow that will be generated through operations will be RMB 3.4 billion yuan (about US$500.9 billion).
Performance outlook
The company’s total net revenue in the third quarter of 2019 is expected to be between 17.8 billion yuan and 18.7 billion yuan, representing an increase of 0% to 5% from the same period last year. This outlook reflects the current preliminary view of the Committee and may be adjusted in the future.
Stock price performance
Quarterly earnings per share in the second quarter exceeded market expectations. According to Thomson Reuters’survey, market analysts had previously estimated on average that unless they met General Accounting Standards, they would only dilute earnings per share to $0.14 and generate revenue of $3.06 billion.
In Wednesday’s regular trading in the U.S. stock market, Commodity Exchange shares fell $0.31 to close at $6.26, or 4.72%. In after-market trading after the release of earnings (as of the time of publication), the price of Merchandise rose by $0.50 to $6.76, or 7.99%. In the past 52 weeks, the lowest share price of Weifang was $4.31 and the highest was $9.26. (Tencent Science and Technology Compilation/Mingxuan)