The best-selling Ice and Fire in 2021: Some people’s net profit was cut by 300 million, and some companies turned losses into profits!

Recently, many major retailers have released their 2021 annual performance forecasts, and have taken stock and analyzed their 2021 profit situation and reasons.

Jihong shares expects profit to drop by 50%

Recently, the top seller Jihong shares released its 2021 annual performance forecast. The report shows that the net profit attributable to shareholders of the listed company is 234 million yuan to 259 million yuan, a decrease of 53.64% to 58.12% over the same period last year; the net profit after deducting non-recurring gains and losses is 213.5 million yuan to 238.5 million yuan, a year-on-year decrease of 54.98% to 59.7%; basic earnings per share is 0.63 yuan/share to 0.69 yuan/share, while the same period last year was 1.48 yuan/share.

Judging from these three data, after experiencing the performance explosion in 2020, Jihong's profitability seems to have fallen back from a high level and returned to the level of 2018. But looking at the first quarter financial report, both its revenue and profit are very good.

Data shows that in the first quarter, Jihong Co., Ltd.'s operating income was 1.178 billion yuan, a year-on-year increase of 81.48%; the net profit attributable to shareholders of the listed company was 92.3 million yuan, a year-on-year increase of 24.59%.

However, Jihong's performance has been lacking since then . The semi-annual report shows that the total operating income in the first two quarters was 2.491 billion yuan, an increase of 29.97% year-on-year; the net profit attributable to shareholders of the listed company was 182 million yuan, a decrease of 29.66% year-on-year.

The total operating income in the first three quarters was 3.847 billion yuan, an increase of 19.61% year-on-year; the net profit attributable to shareholders of listed companies was 247 million yuan, a decrease of 42.76% year-on-year.

In its latest financial report forecast, Jihong Co., Ltd. gave five reasons for this situation .

First, due to the long-term impact of the epidemic and increasingly fierce market competition , the transportation costs and advertising expenses of its cross-border e-commerce business have increased significantly, while the overall average order value has dropped significantly. Therefore, although the scale of orders and revenue has continued to grow, the profit level has been adversely affected to a large extent, resulting in a decline in net profit .

The semi-annual report also mentioned that the decline in sales of epidemic prevention materials also dragged down performance. In the first half of 2020 , Jihong Co., Ltd. made a profit of nearly 20 million yuan from the sales of epidemic prevention materials alone . In contrast, the profit it made in the same period of 2021 was less than 300,000 yuan .

However, compared with other big sellers that rely on the Amazon platform, its sales model of accurately pushing products through social media such as Facebook and Google has protected it from the impact of the account ban wave .

As for the second point, Jihong Co., Ltd. stated that the R&D expenses for the construction of the e-commerce SaaS service platform have increased significantly compared with the same period last year , which has increased operating costs .

At present, the GiiMall SaaS service platform has officially been launched for public testing. According to the official statement of GiiMall, its platform is committed to providing sellers with one-stop services for the entire chain, including product selection, website building, marketing, payment, warehousing, logistics, and customer management, empowering Chinese DTC brand sellers and Southeast Asian Internet celebrities and bloggers, bringing more Chinese products to the world stage, creating a new marketing main position, and achieving "super growth" in cross-border e-commerce business . We can wait and see how much benefit GiiMall can generate in the future.

In addition to these, there are three other reasons why net profit is expected to be lower than that of the previous year : accounting adjustments have been made, thereby reducing profits; the precision marketing advertising business has seen a significant decline in profits due to intensified market competition and the divestiture of some businesses ; the price of raw materials for the packaging business has risen sharply, and the increase in investment in plant construction and machinery and equipment has led to an increase in corresponding depreciation expenses.

Looking at the development of Jihong Co., Ltd. over the years, we can see that it has entered into many fields such as cross-border e-commerce, precision marketing, and environmentally friendly packaging .

In the 2020 financial report, Jihong shares mentioned several prospects. The first is to continue to strengthen the intelligent operation of cross-border e-commerce; the second is the construction of SaaS service platform; the third is to open up the road of domestic e-commerce. These have been implemented more or less in 2021. It is not difficult to see that Jihong shares are using their own advantages to strive to create new profit growth points.

Guangbo shares turned from loss to profit, with a net profit of 20 million expected in 2021

Recently, the 2021 performance report of Guangbo Group Co., Ltd. was also released.

Although Guangbo shares are not as well-known as other big sellers, it is understood that Guangbo shares began to enter the field of Internet marketing in 2015, established Global Tao in 2015, created a "cross-border shopping" e-commerce platform and successfully entered the field of cross-border e-commerce. Currently, it has 25 holding subsidiaries , overseas branches in Los Angeles and Vietnam, and more than 30 marketing branches in China .

In the first half of this year, the company's cross-border e-commerce business grew by 37.15% year-on-year , exceeding the 31% revenue growth.   Guangbo shares said in an interview that in the future the company will continue to vigorously develop cross-border e-commerce and lay out a global brand strategy. In the next development, the company will use outdoor leisure and living furniture products as the main sales products of cross-border e-commerce.

According to Guangbo Shares' analysis, driven by both the market and the epidemic , the cross-border e-commerce industry will actively change its thinking, deeply integrate the Internet and traditional foreign trade, seize industry opportunities and expand the competitive landscape. And make full use of the company's advantages, such as supply chain integration, overseas warehousing and logistics, etc. It is also necessary to analyze consumer behavior data in a timely manner in order to seize cross-border e-commerce hot spots and meet consumer needs. At the same time , it will strengthen the company's joint innovation in production, expand market share to the greatest extent possible, expand consumer groups, and strive for more sales opportunities.

In the performance report of Guangbo Co., Ltd. , it can be seen that the net profit attributable to shareholders of the listed company in 2021 is expected to be between 13.5 million and 20 million. Compared with the loss of 236.5046 million yuan in the same period last year, the profit growth is relatively large; and the net profit after deducting non-recurring gains and losses, after a loss of 3 million yuan, there was a profit of 3.5 million yuan. Compared with the loss in the same period last year, the situation in this part in 2021 has also improved; the basic earnings per share, although not large compared with the same period last year, also maintained profitability.

Regarding the reason why the overall performance turned from loss to profit last year, Guangbo Co., Ltd. believes that the company implemented the annual goals set by the board of directors. Under the influence of various factors such as rising raw material prices, rising shipping costs, and unstable overseas epidemics, it was able to actively respond to market changes, be market-oriented, insist on economic benefits as the center, strengthen overall coordination, and make net profit increase compared with the same period last year.

At the same time, in order to adapt to the needs of global competition, Guangbo shares has also made a lot of efforts in the construction of branding and innovative enterprises. It has been favored by global supermarket chains and stationery distributors such as Wal-Mart, STAPLES, and Disney, and its products have been exported to more than 50 countries and regions in Europe, America, Southeast Asia, etc. In addition, Guangbo shares is also the director unit of the National Light Industry Standardization Committee and has more than 100 patents of various types .

According to previous data, Guangbo Co., Ltd. 's operating income in the first half of 2021 was approximately 1.433 billion yuan, a year-on-year increase of 31.85%. The operating income in the same period of 2020 was approximately 1.087 billion yuan.

Although affected by many factors such as the epidemic, the development of enterprises is also facing various instabilities. However, crises and opportunities coexist. Just like Guangbo Shares, if you understand the strengths and weaknesses of your own company and find the right direction for future development, it will not be difficult to turn crises into business opportunities and make profits.

Performance Report

Jihong Shares

Guangbo Shares