Boqii Holding(US:BQ)2021-11-30 15:52Financial Data and Key Metrics Changes - The company reported a top-line growth of 23.1% year-over-year, with gross profit margin improving from 18.6% to 19.7% [8][18] - Quarterly gross profit was RMB 55.7 million, up by 30.7% year-over-year, leading to a gross margin of 19.7% [18] - Fulfillment expenses slightly increased to RMB 29.6 million, with fulfillment cost as a percentage of revenue decreasing from 12.7% to 10.5% [18] Business Line Data and Key Metrics Changes - Revenue from marketing and information services more than doubled, reaching 5.7% of total revenue, with an eleven times increase in this segment [9][10] - The number of active buyers grew by over 20% for five consecutive quarters, with a 3.5% increase in Q2 [9][10] - The company expanded its SKU offerings to 24,000 from 17,000, and the number of brands increased from 516 to 619 [9] Market Data and Key Metrics Changes - The pet industry in China is still in its early stages, with pet ownership at just above 25% of the total population, indicating significant growth potential [10] - The company noted that many small to mid-sized brands struggle to secure traffic, which presents an opportunity for Boqii to provide integrated solutions [10] Company Strategy and Development Direction - The company aims to strengthen its position in the pet ecosystem by enhancing its value chain and improving product offerings [8] - A strategic partnership with Evetsoft was established to launch an online procurement platform for independent pet hospitals, enhancing supply chain efficiency [14][15] - The company launched a new membership program that has seen a high engagement rate, with members shopping 3.1 times more frequently than non-members [16] Management's Comments on Operating Environment and Future Outlook - Management observed a slowdown in consumer demand affecting some e-commerce players but noted that Boqii is not significantly impacted, with strong revenue growth continuing [34] - The company plans to reach breakeven by the end of the first half of the next fiscal year, indicating confidence in its financial trajectory [34][35] - Management emphasized the importance of consolidating resources during the COVID situation to empower offline independent hospitals [34] Other Important Information - The company ended the quarter with cash and cash equivalents of RMB 339.7 million, which is deemed sufficient for future investments [19][35] - The increase in sales and marketing expenses was attributed to personnel costs and business expansion efforts [18] Q&A Session Summary Question: Membership business and active members - The company has approximately 30,000 active members and plans to promote membership activation among spending customers [22][23] Question: Strength in online marketing segment - The growth in service revenue is driven by the rapid growth of the pet market and the need for effective traffic solutions for small to mid-sized brands [24][25] Question: Impact of COVID on business - Management noted a slight impact from COVID but emphasized that the overall industry continues to grow, and Boqii is well-positioned to capitalize on this growth [34] Question: Profitability timeline and cash position - The company expects to reach breakeven by the end of the first half of the next fiscal year and has a strong cash position to support operations [34][35]