Vipshop Releases 2019 Q4 Financial Report – Stock Price Rises from 2018 Bottom
Vipshop’s 2019 Q4 net revenue was CNY 29.32 billion and gross profit was CNY 7 billion, the stock price rising from a 2018 bottom of USD 4.71 to USD 15.89 per share.
On March 5, the brand sale e-commerce platform Vipshop (VIPS:NYSE) announced (in Chinese) its unaudited financial report for the fourth quarter of 2019 and the whole year. The financial report shows that the company achieved a revenue of CNY 29.3 billion (USD 4.22 billion) in the fourth quarter of last year, a year-on-year increase of 12.4%; under US GAAP, the net profit attributable to ordinary shareholders was nearly CNY 1.5 billion (USD 210 million).
The stock price of Vipshop rose to USD 15.89 at 2 pm on March 5 (EST). Since its first launched on NYSE in 2012, the market value hit a peak in 2015, at USD 15 billion, then the stock price went down and hit the bottom on Nov 2018. Since then, the price increased gradually, and the release of the financial report drove the stock price up.
Dating back to the third quarter of 2018, Vipshop started to cooperate with JD.com (JD:NASDAQ) and Tencent (0700:HKEX). Besides, it put back its focus on "Special Offers" and stuck to its established strength in Apparel & Wear. After opening the WeChat traffic portal and launching Vipshop flagship store on JD.com, this online shopping company's new user growth accelerated. In 2019, the number of active users for the full year increased 14% year-on-year to 69 million; total order volume increased by 29% year-on-year to CNY 566.3 million (USD 81.64 million).
The problems Vipshop has faced do not make it unique among companies in the e-commerce industry. The entire e-commerce industry has passed the fast-growing dividend period, and other new players have entered with creative methods to compete for users and market share. Pinduoduo created the 'social+e-commerce' new style to expand its business, and tech giants such as Tencent and Baidu (BIDU:NASDAQ) are all investing in social platforms to catch the trend, especially short videos and online live streaming. Moreover, China Zhihu which is a high-end users' knowledge sharing platform, got investments from Baidu and Kuaishou worth USD 450 million in Aug 2019.
While social platforms are considered to be a potential way for e-commerce to stimulate business growth, Vipshop seems like it hasn't performed outstandingly. Whether it will continue to stay profitable in the following quarters needed to be considered. The first quarter of 2020 will be affected by Coronavirus, which makes sense, and this e-commerce company estimates that the revenue range for the first quarter of 2020 will be around CNY 17 billion (USD 2.5 million).