Missfresh(MF)2021-11-13 11:41Financial Data and Key Metrics Changes - GMV reached RMB2.57 billion, representing a 41% year-over-year increase [6] - Total revenue grew 47% to RMB2.12 billion, exceeding the guidance range of 40% to 45% [6] - Gross margin increased by 480 basis points from the second quarter to 12.3%, exceeding guidance by 130 basis points [6][20] - Net loss narrowed, with non-GAAP net margin improving by 517 basis points sequentially [6] Business Line Data and Key Metrics Changes - Online product sales increased by 48.1% to approximately RMB2.1 billion [19] - Other revenues reached RMB43.7 million, a growth of 14.1% [19] - Sales of chilled pork grew by 86% quarter-over-quarter [11] - Private label brand, Xiang An Xin Fresh Joy, expanded to over 200 SKUs with sales growing by 250% quarter-over-quarter [12] Market Data and Key Metrics Changes - The company expanded its DMW business to cover 17 first-tier and second-tier cities [9] - The average value per order maintained an industry-leading position [13] - The average price per order was nearly RMB90, with rider expenses being less than RMB5 per order [39] Company Strategy and Development Direction - The company aims to establish DMW as the primary grocery shopping model for urban consumers [9] - Focus on high-quality and sustainable growth through improved customer shopping experiences and high-value user base cultivation [8] - Plans to expand intelligent fresh market business and retail cloud services to empower traditional retailers [14][15] Management Comments on Operating Environment and Future Outlook - The management noted steady growth in neighborhood-related consumption trends in China [7] - The company expects net revenue for Q4 2021 to be in the range of RMB2,232 million to RMB2,315 million, representing a year-over-year growth of approximately 35% to 40% [24] - Management emphasized the importance of digital transformation and operational efficiency to achieve profitability [25] Other Important Information - Cash and cash equivalents as of September 30, 2021, were RMB2,479.5 million, compared to RMB1,041.5 million at the end of 2020 [23] - The company is focused on improving operational efficiencies and achieving positive operating cash flow [41] Q&A Session Summary Question: Growth drivers and user penetration - Management highlighted that growth is driven by the on-demand DMW retail business and intelligent fresh market model, with potential for increased penetration in first-tier and second-tier cities [28][29] Question: Margin improvement guidance - Management indicated that margin improvement is driven by user growth, operational strategies, and improved customer services [30][31] Question: Fulfillment expenses and government impact - Management noted that fulfillment expenses could be offset by increasing average order value and improving operational efficiencies [36][39] Question: Fresh market business and unit economics - Management confirmed that they are on track to improve unit economics and achieve positive fulfillment profit margins [40] Question: Marketing expenses and customer acquisition - Management stated that they expect a significant reduction in sales and marketing expenses as a percentage of revenue in the coming quarters [47] Question: Average order value and capital sustainability - Management explained that AOV was impacted by seasonal factors and confirmed a good balance on cash and cash equivalents, with no concrete capital raising plans yet [60]