Deep Interpretation: Why Did Wang Jingdong Lose Money Suddenly?

See,

The team has been trying to make a big news recently. It has been released one after another: after 89 years' assistant as a legal person and first love returning to the public management, he recently threw out a blockbuster: in the 2016 Q2 quarter, Wang Jingdong, who lost ten thousand years, actually made profits?

After looking through the reports of your country's media, it is obvious that some shallow media with a lack of industry understanding have begun to preach: Jingdong has embarked on the road of scale profit since then. From now on, the pancakes can add two eggs ~ ~ Balabala ~ is just the theory of swaying with the wind.

In fact, a very simple reason is clear: it takes time to change. How can it change qualitatively in just 3 months?

You know, in the July magazine's announcement: in the 16 year list of China's top 500 loss companies, Jingdong mall could be a loss of 9 billion 370 million yuan for Chinese enterprises and a loss of NO.1 for Chinese enterprises.

Profit is only financial technology.

The financial situation of an enterprise is far more complicated than that of a person's financial situation. It is not simple: "money", "no money", "profit" and "loss" can be summarized accurately.

And the earnings report is a listed company announces its own financial data through a unified standard, in order to help stocks.

Understand the existence of the enterprise situation, but because of the interests involved too much, there are still many skills which can modify the performance.

And the VAILLANT is so large that it can be seen as if it is a music player. It can even go to the realm of being out of the realm of things (not knowing how to go to Baidu voluntarily).

In fact, China Internet Corporation listed in the United States usually has two profit and loss results: the US and non US general accounting standards, and the familiar Sina, vip.com, Youku and so on all do so.

Because when calculating non US general accounting standards, the cost of intangible assets, such as option cost, business combination and merger, will not be included in the calculation. It only includes the normal profit loss of the cost of income.

Therefore, it is just an exchange of accounting standards that will make the figures look better.

Take Jingdong Q1 quarterly earnings report 2016 as an example:

The adoption of us accounting standards is a loss of 860 million yuan and the use of non US accounting standards is 290 million yuan.

Jingdong explained that the use of non GAAP can better reflect the company's operation.

But as a matter of fact, it has just received the 1 shop and immediately asked for 1 billion subsidy.

For Jingdong in the supermarket, this means that "the amortization cost of intangible assets caused by merger and merger" may not be leveled up in the case of 2-3Q's profit growth. "The use of non US accounting standards is obviously a deliberate action taken by Jingdong.

According to the non US general standards, 16 years Q2 Jingdong announced: profit of 391 million 400 thousand yuan, which means that once the use of the United States general accounting standards, it is still a state of loss.

So, in order to make a big news, Jingdong is also fighting. The profit and loss is between an accounting standard! This new skill, do you have GET?

Behind the earnings report: not impossible, but not.

I know that the students who read the text above do not understand, so why do they not use it before: why not use it in the United States?

Uncle Ni's answer is: it's not impossible, it's just not, because making profits from earnings is not much benefit to Jingdong. Why listen to Uncle Ni?

First of all, qualitative change can not happen in the short run.

Jingdong is limited by its own mode, and its current state can only be swayed between the slight loss and the slight profit. It is impossible to make money like the Alibaba or Amazon. The first step in the direction of profit is to get a good turn in the earnings report, but it is also the last step.

Compared with the convenience store at your door, it can not be sold more expensive, otherwise it will not have the advantage, but it will sell you goods, it needs to purchase itself, purchase warehousing, and then build its own logistics and distribution. In addition, there are a series of works such as building platforms, advertising, depreciation, customer service, after sale, replacement and so on. Compared with a very profitable profit center, it is more likely to become a cost center, so the self operated electricity supplier is basically a burning destiny. This is the industry gene decision. Before finance, O2O and other future businesses have not yet grown into blood supply units, Jingdong group, whose core business is Jingdong mall, can not support a high profit commercial empire. Because the electricity supplier based on the retail core is essentially the same thing:

Second, the biggest driver of this profit is narrowing with slower growth.

The net loss in the second quarter was 132 million 100 thousand yuan (US $19 million 900 thousand), a decrease of 74% from a net loss of 510 million 400 thousand yuan in the same period last year.

But with the sharp narrowing of losses, the growth rate of Jingdong's core GMV grew from 55% of Q1 to 47% of Q2, which basically hit a new low in recent years.

Reuters's latest report points out that Jingdong's revenue growth is in line with management's expectations, but the trend of declining revenue growth will continue.

In fact, Jingdong has already revealed more pessimistic guidelines for its third quarter revenue while disclosing its second quarter earnings. Jingdong expects revenue in the third quarter to be further reduced to 59 billion to 61 billion yuan, and revenue growth will drop further to 34%-38%.

According to Uncle Ni, it is impossible to generate qualitative change in a short time. What can be done is to adjust strategy and resource layout. Jingdong chooses to slow down growth and reduce losses in exchange for positive financial figures, but the problem is that self operated electricity suppliers whose core is retail is not profitable (self operated electricity supplier gross margin is 7%, while Jingdong optical logistics cost is 7%) the solution is to increase the gross profit margin of 70% of the open platform business.

However, once the open platform business is opened up, it will affect the user experience of Jingdong. Therefore, at present, the open platform business is maintained at 40% level, which is the red line that Jingdong can maintain at present between the small profits and losses. It takes a self run loss and slows down the platform growth.

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Finally, Jingdong will stay in the right direction between maintaining growth and expanding profits.

For the next Jingdong, the 3C industry, which relies heavily on proprietary business, is slowing down, and the third party platform must be limited.

The most proud direct logistics business is using a very flexible offline expansion mode (that is, increasing services must increase manpower instead of unlimited expansion of the Internet). High growth means high cost, and in the case of providing users with good experience, it also becomes a resistance to profitability. If a more beautiful revenue report is needed, the self logistics team is the sponge that can easily squeeze out the cost of water.

But if the user experience is affected, is Jingdong still Jingdong?

When the next development of Jingdong, there is a contradiction between the volume of pactions and the index of profit growth: the scale is restricted and the profit demand is in demand. That means that everything can only be squeezed out of the merchants who are forced to suffer, but this is no doubt a killing of the golden eggs.

In fact, at the annual meeting of 2015, Jingdong executives mentioned that it is not difficult for Jingdong to make profits financially. Why is it so hard to make profits? Because for a long-term loss company, profits are adult rites. Once profits are made, the whole capital market will be judged by its imaginative waiting and become the standard of price earnings ratio, just like the expectation of a child to adults.

It is not difficult for Jingdong to make profits from finance. The real trouble is that its slow business growth is difficult to meet the capital's demand for the future.

What will happen in the next quarter?

Throughout the Jingdong's three year earnings report, there is an obvious rule: its trading volume is Q1 low, Q2 is high (because there are 618), Q3 will have a big fall, Q4 will have a certain improvement (year-end promotion).

So Q3 Jingdong data will enter a relatively low level.

Besides the influence of natural cycle, there are constraints mentioned above.

Recent frequent changes in Jingdong executives may also be influential factors, such as Jingdong mall CEO Shen Haoyu pferred abroad.

Of course, the frequent change of executives by Jingdong is a matter that has been going on for many years.

The good Internet media collated executives from Jingdong from 2012 to 2015, including Li University, Ying Ying Chun, Wang Yaqing, Zhao Guoqing and so on.

It involves CTO, CSO, senior vice president and so on.

There is a paragraph in the industry that even Jingdong executives have a faster turnover of inventory than Jingdong.

Despite the high level of executives turnover, the CEO level is the highest ever.

And Shen Haoyu's job change news is due to the early media burst, and then officially announced the pfer of information.

Business growth is slowing, and core executives are constantly changing. Expectations are getting higher and higher in capital markets. Jingdong's Q3 should be a little tough.

In addition, after Jingdong repeatedly charged billions of dollars, Jingdong's standard & Poor's index has been downgraded, far below BAT, and its downgrade will raise its financing costs.

These are the cumulative results of Jingdong over the years, and may also have an impact on the next development of Jingdong.

To tell the truth: it's hard to get a game of chess down here, and then to fall behind.