roadshow presentation - macquarie group · roadshow presentation may 2014 . 102 102 102 101 102 159...
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Roadshow Presentation May 2014
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Disclaimer
The information in this presentation is provided to you by Jumei International Holding Limited (the “Company”) pursuant to Section 5(d) of the U.S. Securities Act of 1933, as amended (the “Securities Act”), solely for informational purposes and is not an offer to buy or sell, or a solicitat ion of an offer to buy or sell, any security or instrument of the Company, or to participate in any investment or trading strategy, in the United States or anywhere else . By viewing or participating in this presentation, you acknowledge and agree that (i) the information contained in this presentation, the Company’s contemplated initial public offering and any related discussion between you and the Company are each strictly confidential, (ii) the information contained in this presentation is intended for the recipient of this information only and shall not be disclosed, reproduced or distributed in any way to anyone else, (iii) no part of this presentation or any other materials provided in connection herewith may be retained or taken away following this presentation, and (iv) all participants must return this presentation and all other materials provided in connection herewith to the Company at the completion of the presentation. By viewing, accessing or participating in this presentation, you agree to be bound by the foregoing limitations. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. You further represent to us that you are a “qualified institutional buyer” as such term is defined under Rule 144A under the Securities Act, whether you are in the United States or outside of the United States. Any failure to comply with these limitations may constitute a violation of applicable securities laws. This presentation does not constitute a “Prospectus” within the meaning of the Securities Act. The Company is not making any offer of its securities at this time, and cannot accept orders for any securities at this time. No securities of the Company may be sold in the United States without registration with the United States Securities and Exchange Commission (“SEC”) or an exemption from such registration. Any public offer of securities would be made pursuant to an effective registration statement and prospectus prepared by the Company that would contain material information not contained herein and to which any prospective purchasers are referred. In the event of any such offering, this presentation shall be deemed superseded, amended and supplemented in its entirety by such prospectus. Such prospectus will contain all material information in respect of any securities offered thereby and any decision to invest in such securities should be made solely in reliance on such prospectus. The prospectus will be available at the website of the SEC and may be obtained from the potential underwriters participating in such offer or the Company upon such publication. This presentation does not contain all relevant information relating to the Company or its securities, particularly with respect to the risks and special considerations involved with an investment in the securities of the Company, and these materials are qualified in their entirety by reference to the detailed information to be appeared in a statutory prospectus. This presentation does not constitute legal, regulatory, accounting or tax advice to you. We recommend that you seek independent third party legal, regulatory, accounting and tax advice regarding the contents of this document. This presentation does not constitute and should not be considered as any form of financial opinion or recommendation by the Company or any other party. No representations, warranties or undertakings, express or implied, are made and no reliance should be placed on the accuracy, fairness or completeness of the information in this presentation. This presentation contains statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers about the future. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors and assumptions, many of which are beyond the Company’s control. Neither the Company nor any of its affiliates, advisors, representatives or underwriters has any obligation to, nor do any of them undertake to, revise or update the forward-looking statements contained in this presentation to reflect future events or circumstances.
Confidential | 1
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Offering Summary
Confidential | 2
Issuer Jumei International Holding Limited (“Jumei”)
Exchange / Ticker
Offering structure
Price range
Use of proceeds
Lock-up
Expected pricing
Joint bookrunners
Co-managers
NYSE under the symbol “JMEI”
1 ADS representing 1 Class A ordinary share
9.5 million ADSs (100% primary)
15% greenshoe
US$19.50-US$21.50 per ADS
Invest in marketing and branding efforts, expand logistics network and enhance fulfillment capabilities, strengthen IT infrastructure and systems, and for general corporate purposes
180 days for the Company, directors, officers, existing shareholders, certain option holders and the concurrent placement investor
May 15, 2014
Goldman Sachs (Asia) L.L.C., Credit Suisse, J.P. Morgan, China Renaissance
Piper Jaffray, Oppenheimer & Co.
Concurrent Placement US$150 million Class A ordinary shares to be purchased by General Atlantic
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Presentation agenda
Confidential | 3
Agenda Presenters
Who we are? 1
What we have achieved? 2
Growth strategies 3
Financial highlights 4
Leo Chen Founder, Chairman, CEO
Mona Gao Co-CFO
Yunsheng Zheng Co-CFO
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Who we are?
Confidential | 4
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Jumei at a glance
Confidential | 5
Source of market size: the Frost & Sullivan report Note: Active customers in FY2013, mobile rate is for 1Q2014, repeat purchase rate is for FY2013 Active customers defined as customers who purchased products offered by us or our third-party merchants at least once during the period
Curated sales of beauty products
Active customers
10.5mn GMV through
mobile
49% Repeat
purchase rate
89%
#1 online beauty products retailer in China
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Confidential | 6
We achieved high return on invested capital
340%+ ROI(1)
13
(4)
8
58
2011 2012 2013
Net income (US$ Millions)
Note: Net income figures are shown on a non-GAAP basis and exclude the impact of share-based compensation expenses (1) Defined as non-GAAP net income minus PE funding divided by PE funding (2) Non-GAAP net income divided by net GMV
Commenced operations in: 2010
PE funding
Net margin(2) (4.1%) 2.6% 7.1%
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92,269
327,255
816,570
2011 2012 2013
And explosive growth
Message statement
(US$ Thousands)
Confidential | 7
Net GMV Gross profit
(US$ Thousands)
Merchandise sales gross profit
(US$ Thousands)
19,000
84,683
199,679
20.6%
25.9%
24.5%
2011 2012 2013
Overall Gross Profit / Net GMV
Note: Non-GAAP net income excludes the impact of share-based compensation expenses
519
60,518
129,733
15.7%
28.9%
31.4%
2011 2012 2013
Merchandise Sales Gross Profit / Merchandise Sales Net GMV
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In a beautiful industry
Confidential | 8
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Confidential | 9
With beautiful margins
24%
47%
7%
11%
Source: Sasa’s interim report for the six months ended September 30, 2013 and annual report FY2013 and annual report for the twelve months ended March 31, 2013 Note: Jumei’s margins calculated based on gross profit or non-GAAP operating expenses or non-GAAP net income divided by net GMV. Non-GAAP figures exclude the impact of
share-based compensation expenses Sasa’s margins calculated based on gross profit or operating expenses or net income divided by turnover (1) Defined as operating expenses divided by net GMV (Jumei) or turnover (Sasa). Sasa’s operating expenses include selling and distribution costs and administrative expenses
Jumei financials for the year ended December 31, 2013 Sasa financials for the LTM ended September 30, 2013
(16%)
(35%)
Private label and exclusive products drive high gross margins
Gross margin Operating cost(1) Net margin
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Coupled with efficient operating costs
Message statement Note: All numbers are shown on a non-GAAP basis and exclude the impact from share-based compensation expenses.
Confidential | 10
(US$ Thousands)
9,348
36,484
51,670
10.1%
11.1%
6.3%
2011 2012 2013
% of Net GMV
699
4,386
9,238
0.8%
1.3%
1.1%
2011 2012 2013
% of Net GMV
(US$ Thousands)
Technology and content expenses General and administrative expenses
Fulfillment expenses Marketing expenses
(US$ Thousands) (US$ Thousands)
1,264
4,527
8,869
1.4%1.4%
1.1%
2011 2012 2013
% of Net GMV
11,842
28,884
58,846 12.8%
8.8%
7.2%
2011 2012 2013
% of Net GMV
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Confidential | 11
Management team with compelling industry expertise
Mona Gao
Co-CFO
Leo Chen
Founder, Chairman, CEO
Yusen Dai
Co-founder, Director, VP of Products
Yunsheng Zheng
Co-CFO
CFA, CPA
Huipu Liu
Senior VP
Tony Zhou
VP of Logistics
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Wind behind our backs for growth
Confidential | 12
Source: the Frost & Sullivan report Note: Figures converted at an exchange rate of 1USD:6.0537RMB (1) Figures as of 2012
4
16
2013A 2018E
(US$ Billions)
37
71
2013A 2018E
Beauty products retail sales
(US$ Billions)
4X
23
168 216
351
China SouthKorea
Japan US
(US$) (US$ Billions)
CAGR
33% CAGR
14%
Beauty products retail sales Online B2C beauty products sales
Total retail sales through m-commerce Per capita consumption of beauty products(1)
2X 4X
50
368
2013A 2018E
7X
CAGR
49%
7X
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What we have achieved
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Our business is predominantly beauty products curated sales
Browse almost daily
Fun and discovery
High repeats!
Drive gross margin
Value proposition to brands
Cross selling of non-beauty products
Confidential | 14
Beauty products curated sales
Private label & exclusive products
Curation, large scale and rapid roll out
Trusted recommendation
platform
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Exceptional marketing capabilities: innovative and cost-effective
Confidential | 15
Jumei’s unique and innovative marketing
Dec 2011
Jumei’s 2011 beauty products event with
A-list stars in attendance
Hippo Family micro-films debut
Jun 2013
Feb 2013
Updated “I endorse myself” video ad
Dec 2013
First physical store opens in Beijing
Note: Figures converted at an exchange rate of 1USD:6.0537RMB (1) For FY2013. Defined as marketing expenses divided by # of new
members to place orders in a given period (2) For FY2013. Defined as marketing expenses divided by # of new
active customers in a given period. Source: Earnings releases and investor presentations.
(1)
What everyone else does
u
Lower customer acquisition cost
RMB 64
(2)
Search engines
Portals
Advertising networks
Video sharing websites
Social networking websites
Microblogging websites
RMB 38
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Confidential | 16
Successful brand incubator
Hippo Family Brand A
Creative and cost-efficient marketing for private label
Effective platform for boutique brands to grow strategically
Effectively launch new products Enhancing brand profile and awareness
June 2013 First season of micro-films featuring Hippo Family hits video-sharing websites
4x Sales revenue growth, reaching ~RMB10 million on a quarterly basis 2011 2013
RMB200+ million
Total online sales of Brand A
Brand A’s sales through Jumei’s internet platform
accounted for >RMB100 million
>4x
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Robust mobile platform offering a superior mobile experience
Confidential | 17
Source: the Frost & Sullivan report (1) VIPShop 4Q2013 earnings call transcript (2) JD.com prospectus filed on March 19, 2014 (3) Dangdang 4Q2013 earnings call transcript
49%
23% 18%
>10%
GMV generated
from mobile platform
(1Q2014)
Mobile sales as %
of total revenue(1) (4Q2013)
Fulfilled orders
through mobile(2)
(Feb 2014)
Total orders from
mobile(3) (4Q2013)
Free data usage
Special sales events
Early launches
Smart push initiatives
Engaging and fun features
Mobile- specific
“sweeteners”
Significant monetization
potential
Transaction history
Browsing history
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Trusted online retail brand: Authentic Beauty Products Alliance
You check the pin number
on the Alliance’s or participating
brand’s website
Beauty product suppliers become
members of the Alliance
Supplier applies stickers on its products
Product promotion on
jumei.com with authenticity
banner
1 2 3 4 5
You purchase products
from Jumei
Note: Total members as of December 31,2013
1
Before Scratch
After Scratch
Confidential | 18
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Trusted online retail brand: Spectrum tests to strengthen product quality control
Confidential | 19
Note: Displayed images are for illustrative purposes only
In collaboration with a lab at a leading institution to safeguard product quality
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Pass Fail
Co
ntr
ol
sam
ple
Obtain control samples of content for original, authentic beauty product SKUs
Run analysis on randomly selected SKU samples to be sold on jumei.com
Pioneer
Routine testing
Random sampling
procedures
Enforced penalties
Committed to high
standards of quality
Test
sam
ple
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Loyal and interactive customer base willing to try new products
Confidential | 20
(1) “Repeat customer” for a specified period refers to any customer who (1) is an active customer during such period, and (2) had purchased products from us at least twice during the period from our inception to the end of such period. Orders placed by a repeat customer during a specified period include all orders placed by the customer during such period even if the customer made the first purchase from us in the same period;
(2) Orders placed by repeat customers divided by total orders (3) As of December 31, 2013
Repeat customers(1) as a % of total active
customers
Repeat purchase rate(2)
Large online review community
In-depth essay-type reviews
797,000 product reviews(3)
~23.7 million short customer comments(3)
Loyal customer base Very engaged customers
53.8% 56.3%
62.0%
2011 2012 2013
86.7% 86.6% 88.9%
2011 2012 2013
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Growth strategies
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Our growth strategies
Confidential | 22
Expand private label and exclusive product offerings
Cross-sell into complementary categories such as apparel
Improve customer experience
Continue to invest in marketing
Improve collection of product offerings
Improve shopping experience
Pursue strategic M&A opportunities
Complementary to current business and operations
Exploring with Dickson Concepts (1)
for strategic alliance
Customize recommendations on mobile
Enhance targeted cross-selling efforts
Add new features and functionalities
Gain share of wallet from
existing users
Continue to grow our customer
base
Mobile strategy
Potential strategic alliances,
investments and acquisitions
(1) A renowned luxury goods retailer
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Confidential | 23
Extend our product offerings
(By Shiseido)
Category expansion with cross-selling opportunities
Private label products
Exclusive SKUs and sets under
popular brands
Exclusive distribution rights for international
brands
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Financial Highlights
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Revenue recognition
Confidential | 25
Net revenue build-up
Beauty products Beauty products Apparel and other lifestyle
products
Curated sales
Online shopping mall
Curated sales
Online shopping mall Flash sales
Principal
Orders fulfilled by our logistics
centers
Service provider
Orders fulfilled by our logistics
centers
Service provider
Orders fulfilled by third-party
merchants
Gross Net, service fee Net, service fee
Merchandise sales
GMV VAT1 and
Surcharges Customer Returns
Cash Coupons
Delivery Fees
Charged to Customers
Net GMV
Net Revenue
Corresponding Payables to 3rd
Party Merchants
Net Revenue
Marketplace services
Merchandise sales Marketplace services
Products
Sales formats
Revenue recognition
Revenue stream
(1) 17% for merchandise sales; 6% for the commissions earned on marketplace services
Our role
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Key revenue drivers
Confidential | 26
4,484
15,714
35,962
3.5 3.3
3.4
2011 2012 2013
Average Orders per Active Customers
1,290
4,824
10,536
53.8%
56.3%
62.0%
2011 2012 2013
% of Repeat Customers
(Thousands)
Message statement
(Thousands)
(1) An active customer for a specified period refers to a customer that made at least one purchase during the period; A repeat customer for a specified period refers to any customer who (i) is an active customer during such period, and (ii) had purchased products from us at least twice during the period from our inception to the end of such period
(2) Increase in net GMV per order in 2012 appears low because we decreased marketplace services, which has lower VAT
(US$)
20.6 20.8
22.7
2011 2012 2013
Total orders and average orders per active customer Number of active customers(1)
Average net GMV per order(2)
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92,269
327,255
816,570
2011 2012 2013
Explosive net GMV growth
Confidential | 27
(US$ Thousands)
Net revenue breakdown Net GMV
21,788
233,224
482,996
2011 2012 2013
Merchandise sales Marketplace services
(US$ Thousands)
90%
86%
85%
10%
14%
15%
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(3,822)
8,368
57,796
2.6 %
7.1 %
2011 2012 2013
Net income / Net GMV
Operating income and net income analysis (non-GAAP)
Confidential | 28
(US$ Thousands)
Note: All numbers are shown on a non-GAAP basis and exclude the impact from share-based compensation expenses.
(US$ Thousands)
Net income Operating income
(4,153)
10,402
71,056
3.2 %
8.7 %
2011 2012 2013
Overall operating income / Net GMV
102 102 102
101 102 159
221 200 173
200 193 188
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Working capital
Message statement Note: Accounts receivable turnover days, inventory turnover days, and accounts payable turnover days are calculated using the average of beginning and ending receivables,
inventories, and payables balances, respectively, number of days in the period and net GMV / cost of revenues in the period.
Confidential | 29
(Days) 2012 2013
Accounts receivable 2.7 1.0
Inventories 18.2 30.5
Accounts payable 48.6 82.0
Increased due to growing marketplace service, which is not reflected in cost of
revenues
2.7 1.0
18.2 30.5
(48.6)
(82.0)
2012 2013
Accounts Payable Turnover Days Inventory Turnover Days
Accounts Receivable Turnover Days
Cash conversion cycle Turnover days
102 102 102
101 102 159
221 200 173
200 193 188
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Strong cash flow generation
Confidential | 30
US$ Thousands 2011 2012 2013
Net cash provided by/(used in) operating activities (2,009) 27,360 84,806
Net cash used in investing activities (2,027) (6,601) (4,643)
Net cash provided by/(used in) financing activities 10,140 - (833)
Cash and cash equivalents at end of period 9,117 29,964 111,402
Achieved strong cash position with only US$13 million in total funding and no debt
(US$ Thousands)
595
2,124
4,643
0.6 %
0.6 %0.6 %
2011 2012 2013
% of Net GMV
Positive cash flow from operating activities since 2012
Low capital expenditures
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Corporate Structure
32
Leo Chen (CEO) Yusen Dai (VP) Sequoia Capital
(VC) Xiaoping Xu
(Angel) K2 Partners
(VC) Others
Jumei International Holding Limited (Cayman Islands)
Jumei Hongkong Limited (Hong Kong)
40.7% 6.3% 18.7% 10.3% 8.8% 15.2%
Outside PRC
Inside PRC
Tianjin Venus Technology
Co., Ltd.
Shanghai Paddy
Commerce and Trade Co., Ltd.
Chengdu Jumei Youpin
Science and Technology
Co., Ltd.
Tianjin Cycil Information Technology
Co., Ltd.
Tianjin Qianmei International
Trading Co., Ltd.
Beijing Silvia Technology Service Co.,
Ltd.
Three individuals¹
Reemake Media Co., Ltd.
(“Reemake Media”)
Beijing Shengjinteng
Network Science and Technology
Co., Ltd.
100%
100% Equity interest Contractual arrangements
Note: 1.Leo Ou Chen, Yusen Dai and Hui Liu hold 82.30%, 8.85% and 8.85% equity interests in Reemake Media, respectively.
100% 100% 100% 100% 100% 100%
Jumei Hongkong Holding Limited (Hong Kong)
100% 100%
102 102 102
101 102 159
221 200 173
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You place an order
You browse and discover products on
Jumei.com
C
ura
ted
sa
les
Sh
op
pin
g m
all
Bea
uty
pro
du
cts
Our exceptional and complementary sales formats
Confidential | 33
1 2
Click to Order
We package and
ship your stuff from our
warehouse
Our third-party
merchants ship your stuff
3
Your order arrives
4
F
las
h s
ale
s
Ap
pare
l a
nd
lif
es
tyle
p
rod
uc
ts
3
102 102 102
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Confidential | 34
Strategically located logistics centers
Nationwide coverage
~96,600m2 of high-quality facilities(1)
Advanced warehouse management system
Collaboration with reputable third-party delivery companies
Beijing
Guangzhou
Chengdu Kunshan
Strong fulfillment network
(1) Including office space, physical store, customer service centers and logistics centers nationwide
Inventory arrives in Jumei’s logistics centers
Bar-coding and real-
time tracking
Repackage all products to standard
boxes
Shipment
Shenyang
102 102 102
101 102 159
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Quarterly net GMV and net revenue
Confidential | 35
Message statement
(US$ Thousands)
Net GMV
Net revenues
(US$ Thousands)
59,176 81,378 91,805 94,896
190,490 176,078 207,679
242,323 271,290
37.5 %
12.8 % 3.4 %
100.7 %
(7.6)%
17.9 % 16.7 %
12.0 %
221.9 %
116.4 % 126.2 %
155.4 %
42.4 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Net GMV QoQ growth YoY growth
44,592 56,767 65,697 66,168
110,909 108,765 123,254
140,068 154,859
27.3 %
15.7 %0.7 %
67.6 %
(1.9)%
13.3 % 13.6 %
10.6 %
148.7 %
91.6 % 87.6 %
111.7 %
39.6 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Net revenues QoQ growth YoY growth
102 102 102
101 102 159
221 200 173
200 193 188
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Gross margin and net income (non-GAAP)
Confidential | 36
Message statement
Gross profit as % of net GMV
Net income
(US$ Thousands)
Note: All numbers are shown on a non-GAAP basis and exclude the impact from share-based compensation expenses.
22.8 %
25.1 %25.7 %
28.6 %
21.6 %
25.7 % 25.9 %
24.6 %25.2 %
25.1 %
27.9 % 28.2 %
33.3 %
27.4 %
32.2 %
33.8 %
31.9 %
33.4 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Gross profit / net GMV Merchandise sales gross profit / merchandise sales net GMV
(1,055)
2,192 3,888 3,343 7,984
16,429 17,227 16,156 17,917
(1.8)%
2.7 % 4.2 % 3.5 % 4.2 %
9.3 % 8.3 % 6.7 % 6.6 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Net income (Non-GAAP) Net income (Non-GAAP) / net GMV
102 102 102
101 102 159
221 200 173
200 193 188
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Gross margin and net income (non-GAAP)
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Message statement
Gross margin
Net income
(US$ Thousands)
Note: All numbers are shown on a non-GAAP basis and exclude the impact from share-based compensation expenses.
30.3 %
36.0 % 35.9 %
41.1 %
37.0 %
41.5 %43.7 %
42.6 %44.1 %
25.1 %
27.9 % 28.2 %
33.3 %
27.4 %
32.2 %33.8 %
31.9 %33.4 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Gross margin Merchandise sales gross margin
(1,055)
2,192 3,888 3,343 7,984
16,429 17,227 16,156 17,917
(2.4)%
3.9 %5.9 % 5.1 %
7.2 %
15.1 % 14.0 %11.5 % 11.6 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Net income (Non-GAAP) Net margin
102 102 102
101 102 159
221 200 173
200 193 188
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Quarterly operating expenses (non-GAAP)
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(US$ Thousands)
Message statement
(US$ Thousands)
Marketing expenses Fulfillment expenses
General and administrative expenses Technology and content expenses
(US$ Thousands) (US$ Thousands)
Note: All numbers are shown on a non-GAAP basis and exclude the impact from share-based compensation expenses.
5,564 6,837 7,829 8,654
13,905 12,649
14,908
17,384
9.4 %8.4 % 8.5 % 9.1 %
7.3 % 7.2 % 7.2 % 7.2 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013
Fulfillment expenses % of net GMV
7,811 8,705 8,537
11,431
14,375
8,792
12,194
16,309
13.2 %10.7 %
9.3 %12.0 %
7.5 %5.0 % 5.9 % 6.7 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013
Marketing expenses % of net GMV
749 1,037
1,246 1,354 1,638
1,946
2,621 3,033
1.3 % 1.3 %1.4 %
1.4 %
0.9 %
1.1 %
1.3 % 1.3 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013
Technology and content expenses % of net GMV
736 1,098 1,107
1,586 1,381
1,646
2,791 3,051
1.2 %1.3 %
1.2 %
1.7 %
0.7 %0.9 %
1.3 %1.3 %
1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013
General and administrative expenses % of net GMV
102 102 102
101 102 159
221 200 173
200 193 188
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Consolidated statements of comprehensive income/(loss)
Message statement
Confidential | 39
For the Year Ended December 31,
2011 2012 2013
(U.S. dollars in thousands, except share data and per share data) US$ US$ US$
Net GMV 92,269 327,255 816,570
Net revenues:
Merchandise sales 3,307 209,059 413,050
Marketplace services 18,481 24,165 69,946
Total net revenues 21,788 233,224 482,996
Cost of revenues (2,788) (148,541) (283,317)
Gross profit 19,000 84,683 199,679
Operating expenses:
Fulfillment expenses (11,842) (28,884) (59,228)
Marketing expenses (9,348) (36,484) (52,151)
Technology and content expenses (739) (4,416) (10,023)
General and administrative expenses (1,431) (4,761) (40,013)
Total operating expenses (23,360) (74,545) (161,415)
Income/(loss) from operations (4,360) 10,138 38,264
Other income/(expenses):
Interest income 6 199 916
Others, net (150) (93) 127
Income/(loss) before tax (4,504) 10,244 39,307
Income tax expense/(benefit) 475 (2,140) (14,303)
Net income/(loss) (4,029) 8,104 25,004
Accretion to preferred share redemption value (716) (1,688) (1,795)
Income allocation to participating Redeemable Preferred Shares - (1,292) (7,403)
Net income/(loss) attributable to ordinary shareholders (4,745) 5,124 15,806
Net income/(loss) (4,029) 8,104 25,004
Foreign currency translation adjustment, net of nil tax 49 37 1,101
Comprehensive income/(loss) (3,980) 8,141 26,105
Net income/(loss) (non-GAAP) (3,822) 8,368 57,796
Net income/(loss) per share
- Basic (0.12) 0.10 0.27
- Diluted (0.12) 0.06 0.19
Weighted average share outstanding used in computing net income/(loss) per share
- Basic 40,644,779 50,070,659 59,475,739
- Diluted 40,644,779 83,672,986 83,196,788
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Consolidated balance sheets
Message statement
Confidential | 40
As of December 31,
2012 2013 2013
(U.S. dollars in thousands, except share data and per share data) US$ US$ US$ (Pro-forma
unaudited)
ASSETS
Current assets:
Cash and cash equivalents 29,964 111,402 111,402
Short-term investments 3,977 4,100 4,100
Accounts receivable, net 1,454 2,807 2,807
Amount due from related parties 1,339 - -
Inventories 14,748 32,653 32,653
Advances to suppliers 3,288 22,343 22,343
Prepayments and other current assets 9,725 9,289 9,289
Deferred tax assets 172 292 292
Total current assets 64,667 182,886 182,886
Non-current assets:
Property, equipment and software, net 2,015 5,394 5,394
Intangible assets, net 57 36 36
Goodwill 2,320 2,320 2,320
Deferred tax assets 1,985 2,706 2,706
Other non-current assets 144 1,969 1,969
Total non-current assets 6,521 12,425 12,425
Total assets 71,188 195,311 195,311
Current liabilities (including amounts of the consolidated VIEs without recourse to the
primary beneficiaries of US$ $15,010, and US$ 11,651 as of December 31, 2012 and 2013,
respectively)
Accounts payable 38,592 88,766 88,766
Amount due to related parties - 280 280
Advances from customers 5,529 4,506 4,506
Tax payable 3,998 16,264 16,264
Accrued expenses and other current liabilities 4,838 9,835 9,835
Total current liabilities 52,957 119,651 119,651
Non-current liabilities:
Business acquisition payable 635 - -
Total non-current liabilities 635 - -
Total liabilities 53,592 119,651 119,651
Commitments and contingencies
102 102 102
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Consolidated balance sheets (cont’d)
Message statement
Confidential | 41
As of December 31,
2012 2013 2013
(U.S. dollars in thousands, except share data and per share data) US$ US$ US$ (Pro-forma
unaudited)
Mezzanine Equity:
Series A-1 Redeemable Preferred Shares (US$0.00025 par value, 14,474,377 shares
authorized, issued and outstanding as of December 31, 2012 and 2013. Redemption value of
US$799 as of December 31, 2012 and 2013; Liquidation value of US$457 as of December
31, 2012 and 2013. None outstanding on a pro-forma basis as of 2013.)
589 647 -
Series A-2 Redeemable Preferred Shares (US$0.00025 par value, 26,000,000 shares
authorized, issued and outstanding as of December 31, 2012 and 2013. Redemption value of
US$11,375 as of December 31, 2012 and 2013; Liquidation value of US$6,500 as of
December 31, 2012 and 2013. None outstanding on a pro-forma basis as of 2013.)
7,922 8,854 -
Series B Redeemable Preferred Shares (US$0.00025 par value, 7,428,571 shares
authorized, 5,571,428 issued and outstanding as of December 31, 2012 and 2013.
Redemption value of US$9,000 as of December 31, 2012 and 2013; Liquidation value of
US$6,000 as of December 31, 2012 and 2013. None outstanding on a pro-forma basis as of
December 31, 2013.)
6,878 7,683 -
Total mezzanine equity 15,389 17,184 -
Shareholders’ equity/(deficit):
Ordinary shares (US$0.00025 par value, 152,097,052 shares authorized, 79,124,394 shares
issued and outstanding as at December 31, 2012 and 2013, and 125,170,199 shares
outstanding on a pro-forma basis as of 2013)
20 20 32
Additional paid-in capital 270 32,652 49,824
Statutory reserves 289 449 449
Retained earnings/(accumulated deficit) 1,612 24,238 24,238
Accumulated other comprehensive income/ (loss) 16 1,117 1,117
Total shareholders’ equity/(deficit) 2,207 58,476 75,660
Total liabilities, mezzanine equity and shareholders’ equity/(deficit) 71,188 195,311 195,311
102 102 102
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Consolidated statements of cash flows
Message statement
Confidential | 42
For the Year Ended December 31,
2011 2012 2013
(U.S. dollars in thousands, except share data and per share data) US$ US$ US$ Cash flows from operating activities:
Net income/(loss) (4,029) 8,104 25,004
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Share-based compensation 207 264 32,792
Inventory write-down 18 395 527
Depreciation and amortization expenses 169 697 1,329
Deferred tax benefit (1,826) (280) (762)
Foreign exchange loss 53 8 58
Disposal of property, equipment and software - - 69
Changes in operating assets and liabilities:
Accounts receivable, net (3,206) 1,881 (1,197)
Amount due from related party - (1,333) 1,383
Inventories 575 (15,052) (17,706)
Advance to suppliers (5) (3,269) (18,659)
Prepayments and other assets (934) (8,239) 108
Accounts payable 273 37,459 48,004
Amount due to related parties - - 160
Advance from customers 2,534 2,702 (1,285)
Tax payable 2,577 930 11,897
Accrued expenses and other current liabilities 1,585 3,093 3,084
Net cash provided by/(used in) operating activities (2,009) 27,360 84,806
Cash flows used in investing activities:
Purchases of short term investments - (3,960) (4,975)
Maturity of short term investment - - 4,975
Purchases of property, equipment and software (595) (2,124) (4,643)
Business acquisition payment, inclusive of cash acquired (1,432) (517) -
Net cash used in investing activities (2,027) (6,601) (4,643)
Cash flows from financing activities:
Issuance of Series A-2 Redeemable Preferred Shares 4,500 - -
Issuance of Series B Redeemable Preferred Shares 6,000 - -
Issuance cost of Redeemable Preferred Shares (360) -
Repurchase of vested options - - (833)
Net cash provided by/(used in) financing activities 10,140 - (833)
Effect of exchange rate changes on cash and cash equivalents 50 88 2,108
Net increase in cash and cash equivalents 6,154 20,847 81,438
Cash and cash equivalents at the beginning of the period 2,963 9,117 29,964
Cash and cash equivalents at the end of the period 9,117 29,964 111,402
Supplemental disclosures of cash flow information:
Cash paid for income taxes - 1,466 6,993
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Selected quarterly results of operations
Message statement
Confidential | 43
(in thousands of US$ and unaudited) 3/31/2012 6/30/2012 9/30/2012 12/31/2012 3/31/2013 6/30/2013 9/30/2013 12/31/2013
Net GMV 59,176 81,378 91,805 94,896 190,490 176,078 207,679 242,323
Net revenues:
Merchandise sales 41,503 50,431 58,683 58,442 96,229 93,716 104,885 118,220
Marketplace services 3,089 6,336 7,014 7,726 14,680 15,049 18,369 21,848
Total net revenues 44,592 56,767 65,697 66,168 110,909 108,765 123,254 140,068
Cost of revenues (31,081) (36,348) (42,112) (39,000) (69,824) (63,582) (69,448) (80,463)
Gross profit 13,511 20,419 23,585 27,168 41,085 45,183 53,806 59,605
Operating expenses:
Fulfillment expenses (5,564) (6,837) (7,829) (8,654) (13,905) (12,649) (15,059) (17,615)
Marketing expenses (7,811) (8,705) (8,537) (11,431) (14,375) (8,908) (12,375) (16,493)
Technology and content expenses (757) (1,045) (1,254) (1,360) (1,644) (2,222) (2,855) (3,302)
General and administrative expenses (776) (1,142) (1,151) (1,692) (1,515) (1,874) (3,099) (33,525)
Total operating expenses (14,908) (17,729) (18,771) (23,137) (31,439) (25,653) (33,388) (70,935)
Income/(loss) from operations (1,397) 2,690 4,814 4,031 9,646 19,530 20,418 (11,330)
Other income/(expenses):
Interest income 6 24 49 120 248 213 201 254
Other income/(expense), net (3) (10) (15) (65) (16) 165 (5) (17)
Income/(loss) before tax (1,394) 2,704 4,848 4,086 9,878 19,908 20,614 (11,093)
Income tax benefits /(expenses) 291 (564) (1,012) (855) (2,034) (4,099) (4,261) (3,909)
Net income/(loss) (1,103) 2,140 3,836 3,231 7,844 15,809 16,353 (15,002)
Accretion to preferred share redemption value (422) (422) (422) (422) (449) (449) (449) (448)
Income allocation to participating Redeemable Preferred Shares - (365) (989) (767) (2,437) (5,367) (5,567) -
Net income/(loss) attributable to ordinary shareholders (1,525) 1,353 2,425 2,042 4,958 9,993 10,337 (15,450)
Share-based compensation expenses
Fulfillment expenses - - - - - - 151 231
Marketing expenses - - - - - 116 181 184
Technology and content expenses 8 8 8 6 6 276 234 269
General and administrative expenses 40 44 44 106 134 228 308 30,474
Total share-based compensation expenses 48 52 52 112 140 620 874 31,158
Net income/(loss) (non-GAAP) (1,055) 2,192 3,888 3,343 7,984 16,429 17,227 16,156
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