The performance changed unexpectedly! A regular on the BS list suffered a loss of 400 million yuan

At the beginning of last year, the company's performance was booming, with sales of 5 billion yuan a year and a net profit of 270 million yuan. However, the good times seemed to be short-lived. After the listing, it seemed to be hit hard by the market, losing 400 million yuan in one year. The Shenzhen Stock Exchange sent letters repeatedly, and there were many doubts in the industry.

Often on Amazon's BS list, the big guys sell 5 billion yuan a year for high-priced products

On February 8 last year , Greebo was listed on the Shenzhen Stock Exchange, becoming the " first stock of new energy garden machinery ". Its stock price fell below the issue price on the first day of listing. The issue price was 30.85 yuan per share, but it eventually surged to 41.82 yuan per share, and its market value soared to 18.6 billion yuan. For a time, it was in its heyday.

For more than ten years, Greebo has been deeply engaged in vertical categories. In the year before its listing ( 2022), Greebo achieved an annual revenue of 5.2 billion yuan and a net profit of 266 million yuan from garden machinery.

Since 2009, Greebo has successively established brands such as greenworks and POWERWORKS, and has rapidly opened up overseas markets through channels such as Amazon, Walmart, Lowes, and Costco, using both online and offline channels .

It is understood that in 2020 alone , Greebo sold a total of 3.95 million new energy garden machinery and 2.35 million AC garden machinery . That year, Greebo's net profit reached 568 million yuan , and it distributed 165 million yuan in dividends to shareholders.

Many products under the brand greenworks , such as lawn mowers and hair dryers, have been on Amazon's BS list in subcategories for many years .

Greenworks' flagship store on Amazon shows that many of its products have received 5,000 to 17,000 reviews since they were launched. For example, one leaf blower has received 17,299 reviews since it was launched .

Some product listings are also marked as “Amazon Choice” by Amazon.

At the independent site level, Similarweb data shows that whether divided by global, US market or category website, the traffic ranking of greenworks ' independent site greenworkstools.com is constantly rising.

In February this year , greenworkstools.com had a total of 362,000 visits, and the average monthly visits over the past three months reached 355,100 .

In terms of channels, Greebo's independent website has always performed better than third-party platform stores.

Since the construction of an independent site in 2019, this channel has accounted for the bulk of Greebo's overall revenue. In the past four years (2019-the first half of 2022), the proportion has reached 95.92%, 97.98%, 90.39% and 90.12% respectively, exceeding or approaching 10 times that of third-party platforms every year .

In 2019, Greebo's independent website had a revenue of only 6.63 million yuan , and this figure increased to 135 million yuan in the first half of 2022; but the third-party platform channel only increased from 280,000 yuan to 14.79 million yuan.

The company has received many letters of concern from the Shenzhen Stock Exchange within one year of listing, and its financial statements have been suspected of fraud.

As mentioned above, with such outstanding performance, Greebo officially rang the bell at the beginning of last year and its market value soared, but its heyday was too short.

One year after its listing, Greebo has repeatedly received letters of concern from the Shenzhen Stock Exchange due to poor performance.

In this regard, many shareholders said that the financial reports before listing need to be verified to see whether there is any embellishment of performance for the purpose of listing, any inflated revenue or even financial fraud .

At the end of January this year , after Greebo issued its 2023 annual performance forecast, it was again "noticed" by the Shenzhen Stock Exchange.

The Shenzhen Stock Exchange requires Greebo to explain before February 8 the following major situations that the company experienced last year: 1. Downstream retailers destocking and declining gross profit margin ; 2. Increased sales expenses, research and development expenses, administrative expenses , and financial expenses ; 3. The main composition of inventory (inventory type, amount, inventory age) and previous provisions for inventory impairment ; 4. The expected provision for bad debts of accounts receivable in 2023.

But Greebo kept postponing the response and did not respond until February 26.

At the end of January this year , Greebo almost issued its performance forecast. In its announcement, Greebo's net loss in 2023 will reach 370 million yuan to 430 million yuan , a decrease of 239.1% to 261.7% from the net profit of 266 million yuan in 2022 .

In terms of non-net profit, Greebo suffered a net loss of 300 million to 360 million yuan , a decrease of 235.7% to 262.9% from the profit of 221 million yuan in 2022 .

In terms of full-year revenue in 2023, Greebo will achieve 4.6 billion to 4.7 billion yuan , but it is still a decrease of 9.8% to 11.7% from 5.211 billion yuan in 2022 .

Obviously, the decline in revenue was not high, but the profit plummeted exponentially. Greebo attributed this to the three main reasons: reduced gross profit, increased sales and other expenses, and decreased exchange gains .

Specifically, in 2023, affected by the inventory destocking of downstream retailers, Greebo's revenue declined, and the decline in gross profit margin resulted in a decrease in its gross profit by 190 million yuan to 210 million yuan .

In addition, in the fourth quarter of last year, Greebo's vigorous brand promotion and substantial increase in R&D investment , such as recruiting new R&D personnel , resulted in a total year-on-year increase of 270 million to 290 million yuan in sales expenses, R&D expenses, and administrative expenses .

In terms of foreign exchange, the appreciation of the US dollar last year was narrower than in 2022 , resulting in a significant reduction in exchange rate conversion gains . The company's financial expenses increased by approximately RMB 130 million in 2023. At the same time , the corresponding losses incurred by the foreign exchange derivative financial instruments purchased by the company were approximately RMB 70 million.

Before its listing, its revenue and net profit grew year by year with excellent results, but it started to suffer huge losses in the year of its listing. Every time it released a financial report , it was "watched" by the Shenzhen Stock Exchange, and it could not help but be suspected.

The market value has been cut by 70%. Is it because of the failure of the field or the lack of stamina of Greebo?

At that time, Greebo's stock price soared to 41.82 yuan per share, and its market value soared, but the highlight only lasted for a short month.

Judging from its stock price, Greebo has been declining since March last year, even plummeting to 9.12 yuan per share, a drop of 78% . As of press time, Greebo's stock price is 12.85 yuan per share, a 69% drop from its peak, and its market value has been cut by nearly 70% (66%) from 18.6 billion yuan to only 62.87 yuan .

In the first half of last year, Greebo's revenue was 2.581 billion yuan, but it suffered a loss of 53.91 million yuan; that is to say, in the second half of the year, not only did Greebo's revenue decline, but its net loss also continued to increase, with a loss of 320 million to 380 million yuan in the second half of the year alone.

How could Greebo become so weak in just one year?

In its financial report, we can see that Greebo has always attached great importance to the construction of its own brand, and has deployed offline channels through well-known North American and European supermarkets such as Lowe's, Costco, TSC, Menards, Bauhaus, etc.

Later, following the general trend of expanding online, its brand greenworks performed well on various e-commerce platforms, and its cleaning machines ranked at the top of the recommended list of cleaning machines released by Consumer Reports in the United States.

In 2022, Greebo's own-brand product revenue accounted for 66.81% of the total revenue, which shows that Greebo has taken a big step forward on the branding road.

But it should be noted that the well-known Quanfeng Holdings and Daye Holdings are also competing in this market through their brands.

On the Amazon lawn mower category BS list, EGO, a brand under Chervon Holdings, has consistently ranked first, and many of the top 50 lists are EGO products . Chervon Holdings also has many other brands that are widely recognized by the market, such as FLEX and SKIL.

However, according to its financial report, in the first half of last year, Chervon Holdings' revenue also decreased by 26.3% from the same period last year to US$739 million, and its profit was US$49.05 million, a decrease of 22.7% from the first half of 2022.

Daye Group's 2023 performance forecast shows that its net loss was 110 million to 148 million yuan , and its net profit in 2022 was only 11.25 million yuan .

Judging from the above data alone, the garden machinery industry may have suffered a shock, but the impact does not seem to be that great. However, Greebo went from a net profit of 270 million yuan to a net loss of 400 million yuan. It is hard to know whether it is due to the industry or its own strength.

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