交个朋友’s First Annual Report: Net Profit Soars Over600%, But Stock Price Plunges 17%
BEIJING – 交个朋友, the live-streaming e-commerce platform that rose to prominence under the leadership of former tech entrepreneur Luo Yonghao,has released its first annual report since its backdoor listing. While the company reported a significant increase in net profit, exceeding 600% year-on-year, its stock price took a nosedive, dropping 17% on the day of the report’s release.
The report revealed that 交个朋友 achieved a revenue of 1.074 billion yuan (approximately $152 million) in 2023, a remarkable 152.4% increase compared to the previous year. This growth was largely attributed to the company’s expanding live-streaming business across multiple platforms, including Douyin (TikTok), Taobao, and JD.com. The company also reported an adjusted net profit of 180 million yuan, representing a staggering 601.3% surge.
Despite these impressive figures, the market reacted with skepticism. 交个朋友’s stock price plummeted by 17.3% at one point during the day, ultimately closing at 1.67 Hong Kong dollars, a 9.73% decline. This negative response from investors reflects concerns about the sustainability of the company’s growth trajectory.
Industry experts have pointed out that the significant profitincrease is largely due to the low baseline of the previous year, when 交个朋友 was still part of Century睿科, a company with a much smaller scale. The comparison is therefore misleading, and the current high growth rate may be a temporary phenomenon.
The De-Luo Era: A NewChapter for 交个朋友
The past year has seen 交个朋友 actively distancing itself from the Luo Yonghao brand. The company’s prospectus made minimal mention of Luo, and he does not hold any direct or indirect shares in the company. Luo himself has previously stated that his influence on the company’s revenue has dwindled to a mere 3-5%, and he has since retired from live-streaming to pursue other entrepreneurial ventures.
In the absence of Luo’s star power, 交个朋友 has focused on building a multi-platform strategy, expanding its presence beyond Douyin to include Taobao and JD.com. This move was seen as a necessary step to secure new growth opportunities and reach a wider audience. However, the company has also faced challenges in adapting to the different platforms, particularly in competing with established players like东方甄选, which also entered Taobao last year.
The Quest forSustainability: Supply Chain and Brand Building
交个朋友 has also been exploring new avenues for growth, including the introduction of external celebrity resources and the development of its own supply chain and private label brands. While the company has achieved some success in attracting celebrities like Ming Dao, the initial results have been underwhelming compared tothe massive success of Luo’s initial foray into Taobao.
Industry analysts believe that the future of live-streaming e-commerce will be heavily influenced by the ability to control supply chains and build strong brands. 交个朋友 is still in the early stages of developing its supply chain capabilities, and it remains tobe seen whether it can effectively compete with established players like 东方甄选, which has already built a robust supply chain and a loyal customer base.
A Tale of Two Billion-Dollar GMVs: 交个朋友 vs. 东方甄选
Despite its impressive GMV of 12 billion yuan, 交个朋友’s profitability lags behind that of 东方甄选. While both companies have achieved a GMV of over 100 billion yuan, 东方甄选’s net profit for the first half of its 2024 fiscal year was double that of 交个朋友’sfull-year net profit. This difference can be attributed to 东方甄选’s focus on self-operated products, which gives it greater control over its supply chain and brand.
交个朋友, on the other hand, relies heavily on commission-based revenue from its live-streaming services, and it incurs significant costs in acquiring traffic. This reliance on external platforms and third-party products has limited its profit margins.
The Road Ahead: A New Story for 交个朋友
As 交个朋友 embarks on a new chapter without Luo Yonghao, it faces a critical juncture. The company mustfind a way to optimize its revenue structure, build a more robust supply chain, and establish its own unique brand identity to compete in the increasingly competitive live-streaming e-commerce market. The success of its future will depend on its ability to adapt and innovate in the face of these challenges.
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