Q4 2019 Earnings Call
<unk> and welcome to balance fourth quarter and fiscal year 2019 earnings conference call.
This time all participants are in a listen only mode. There will be a presentation followed by a question and answer session at which time. If you wish to ask a question you will need to press star one on your telephone.
I must advise you said this conference is being recorded I would know like Kinda conference over to your first speaker today Ms. Wendy.
Our director. Thank you. Please go ahead.
Thank you operator, Hello, everyone. Thanks for joining us today.
Oh I wondered when you Nike earnings release was distribute it already today and a viable <unk> <unk> <unk> <unk> <unk> thousand dot com as well I I'll go newswire services.
Got you guys I'm Bothers me, how mrna since you chairman and Chief Executive Officer, Mr. Ji, while cheap girls.
Mrs. All the <unk> Chief Financial Officer.
Me too well they'll be this operations on company highlights followed by Mr., who will discuss financial guidance.
I'll be available I was little question you wind up you any section that's all.
We thought would like to remind you that this conference call contain forward looking statement. They leave the meaning of section 21. He of the Securities Exchange Act of magnitude that people as a mandate and defining the U.S. Private Securities Litigation Reform Act of Magneti fight.
These forward looking statement I'll based upon management carbon expectations and kinda Lucky to an opposition conditions I relate to me My <unk> No Oh, no right I'd thirties and the other factors.
Does it go to predict and many of which I'll be on the company's can show, which may cause the companys actual results performance all achievement with just about majority from though in the forward looking statement.
Information regarding these are out of right and so to use all factor I included in the company's falling with the U.S. as easy the government does not the company does not undertake any obligation to update any forward looking statement as a result, you keep all nations due to eat Dassault otherwise.
As required under applicable law.
Finally, please note that unlike otherwise they died off big as mentioned during this conference call I on the it did not pleasure to introduce our chairman and Chief Executive Officer Mr. These then to me then please go ahead.
[noise] that get Wendy Thank you all for joining us.
I would love to Starbucks proceeds deepest concerns well wishes old [noise].
Lives has been impacted.
Ongoing Corona virus outbreak and also big opportunity. Thank our employees for their hard work tremendous resilience and the dedication shown during this difficult period.
We have always been committed to make any high standards corporate social responsibility.
And have prioritized the health and safety all four employees and we continue to offer will support.
Fine carried at all.
Fortunately for Us and all run partners continues a plants were already in place with regard to you for structure and the digitalization technologies already configured for seamless transition remote working with minimal disruptions for business during the peak outbreak in China.
[noise] [noise] accrual numerous all break that's crazy the industry wide and headwinds stemming from softer consumer demands in the fourth humans shortages caused by the ongoing traffic restrictions, so corn tools and the work from home directives.
In general So you talk across the retail industry is significant particularly within discretionary categories, such as apparel and footwear, where demand is more significantly affected by consumer spending less crime all doors.
We foresee.
The near term growth for the wider industry will be challenged.
We're also note that this might be an opportunity.
You anything ongoing impact of outbreak is highlighting just how important and often strategy almost strategy, it's what brands.
Ecommerce showing significant resilience compared with offline retail.
This growing need by brands refine their digital and O'toole strategies place too.
Our strategy as a leading brand ecommerce solution provider.
That's a young dynamic and adaptable company, we believe we're uniquely positioned to leverage our strong fundamentals and the capitalize on this emerging needs over the long lateral.
We believe that a bose digitization and innovation will continue to underpin girls retail industry.
That's a long term drivers of China's E Commerce grocery me on change, we're confident that we will generate long term sustainable value for brand partners and the shareholders.
No I will give an overview overperformance in the fourth quarter.
During the fourth quarter, we continue to capitalize on the girls momentum off trend as E commerce industry.
M.B. grew by 48% and a total net revenue rose 26% year over year.
In the U.S most the significant online event the singles Day shopping festival, we surpassed the significant milestones couldn't be Lynn.
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And the we're proud to say that we help them. Many all four brand partners ranked first in terms of total order value within their respective verticals.
We continue to make significant progress our acquisition of fuel brand the partners.
The net addition off eight brand partners for the quarter.
This brings the total number <unk> run partners 231.
Compared with 185 at the end often 18.
The newly added the brands are mainly in the apparel electronics and food and helps categories.
In particular, we signed a Japanese entertainment electronic spread and the domestic home care product breadth.
We achieved our opinion 19 goals, which is reflected by our Standalone, 35% revenue and you go straight.
What's the fast is the girls we have posted over the last four years.
We also posted record their high increased increases in GMB.
And the net addition of new brands.
I want to highlight the incremental Jimmy you from stores.
Opened less than 12 miles contributed over 10% GMB during the year.
More than doubled its contribution a year ago.
Well, we're probably achievements rather here, we're cognizant of the need to continue optimizing the fundamentally infrastructure. We have put in place will further drive high quality girls.
Spend or operating margins.
The industry continues to evolve rapidly and there's much work that remains to be done in this regard.
Fund human he was the transformative year off our company in terms of strategic Reinvestments and the competitive positioning.
We strengthened our market position. These through continued innovation and adopting a more strategic flexible and their phone civil approach to evolve E commerce industry.
To date.
Our retail operations support system all Ross.
Launched several modules and solutions that focus on automation and intelligence, which have generated very encouraging initial savings in man hours.
The 29 in single Steven Mark the first time that we deployed or hybrid cloud infrastructure Belgian Claude will support high load transaction processing, which performed smoothly and efficiently throughout the entire event.
Where are you encouraged by these achievements, especially since they reflect the continued continued execution of strategy over the past few years Green power Revolution the E Commerce.
Through innovative technologies.
Well progress never follows the street light, we're confident in the digitalization blueprint, we haven't put together.
Our focus for Tony funding will be squarely on driving the seamless integration digitalization and they haven't seen the intelligence or services.
Which we believe we would drive great improvements internal internal operational efficiency and the business flow management.
Beginning in the second half or something like <unk>.
We increased our capacity in terms of logistics for premium sectors.
And the deploy the system upgrades toward W.M.S. and elements for further optimize resource allocation across our logistics network.
During the 2019 single State shopping festival, we launched a integrated pre dispatch system inserts select cities now to support the problem is delivering good consumers within a few hours or so.
Some cases, we won though.
Expert I Didnt deliver it was available immediately after the singles day event kicked off at midnight.
These units to our new high demand from been fathers and the customers initial feedback gathered from reviews and social media channel indicated that they are also greatly enhancing the user experience.
That's the E Commerce evolves, we believe value added services, such as marketing Tech and integrity that digital marketing will becoming increasingly important to boosting traffic and the promoting whether you need should interactive user engagements.
We've been closely following industry trends and the remain to Chuck on further expand or services. We include a wider array of comprehensive due to the market solution.
These solutions include new initiatives, such as last streaming Kaohsiung to kill positioning.
Convert marketing powering to sales results.
Listen our mini programs, a growing popularity of our brand partners as a way to enhance.
User engagement and deploy smarter until strategies.
Weve achieved some initial rex breakthroughs that leverage of social networks and believe we're on the Rep truck as we explore new opportunities in this emerging channel.
Above all we believe for you for structural infrastructure enhancements and incremental contribution from new brand partners in funding and team have laid a solid foundation for our gross momentum to continue into plenty plenty.
However, we're not yet finish and the way we will continue expanding these initiatives will generate high quality girls.
In a sense I would say that we are only just beginning given the enormous gross up new opportunities.
Head office.
We are no entering the next phase of quality girls.
Were off because we'll be strategic margin expansion.
We have a long and exciting journey ahead of us Sunday's when do you will be a year, which we prioritized quality girls.
Accelerates brand the portfolio optimization.
And to drive greater operational efficiency digitalization and the Productization.
We believe the net effect of our efforts will result in higher higher quality girls and the gradual margin expansion.
The and dynamic will create short term headwinds.
And at a financial uncertainties. We also believe increased business opportunities and we firmly believe that our strategic goal will yield more balance and the sustainable Gross addition, <unk> operating margin.
Pullman's what anybody.
I'll now pass the call over to lobby will go over our financials for the quarter. Thank you.
Since Vincent before providing more details about our financials I would like to take some time to address our non capability model take rate.
We do you find a service revenue as a percentage of knowledge experience yet they.
Well the they know this is one of key metrics yields by the market to assess our performance.
Even though internally, we do not they need it's not appropriate imagine to use benchmarking and they do not use it to me the allergy well maxit for internal management purposed either.
By nature decreased by category blackface significantly as each category to exhibit different patents on serving model.
I will say that category me.
It would be the key factor you seating the blended take rate more so than pure at all times.
During the fourth quarter, there was noteworthy structure if warranted.
Category in the grocery.
Yeah that Tony you, especially three say Oh, well other sectors and was quite active during that singles day shopping festival, Oh talking for larger proportion of our total again maybe.
Men's and women's clothing in general So Laker girls.
Luckity within the apparel category, we are primarily exposed to both layer, which continues to perform wow.
Overall, the throw down you know sportswear apparel reduce it yeah, they component in apparel category.
Yeah season, we have a growing can be component from the broader FMCG category, especially food health and the whole.
Just keeps coty, if I always into service they model as well.
Such.
It dramatically changing cadre me in the past year has actually led to a different the blended take grade profile.
I want to also highlight that we achieved the saudis public to free cash flow for full year, 2019, or making cash flow totaled all once you if I didn't mean to.
She was the fourth our path to free cash flow.
They view this as a milestone in working capital management.
As a validation of our high quality growth strategy.
This easy, especially important of the covenants crazy the by macroeconomic uncertainty and the pandemic per se.
We believe its employees seen shows I work X. I read the exact Susan of our high quality girls nifty to build our business you know more sustainable way.
Lastly.
Oh fire broke out either third party buyer halting sorry, Hi October 29 2019.
Fortunately no one was hurt in the accident.
It was a lousy then that impacted our bottom line.
They are cool down operating loss of 45.5 meeting for the quarter.
He called the prototype store at the third party buyer halt what generates slow moving Guru.
They do not anticipate any meaningful topline growth impact for Twentytwenty.
Yes, I'll begin lobbies blog below our previous estimate about 53 meeting.
Oh, so they were able to be power a sum up and then you get product by the size was we open local authorities in late February.
Now, let's go over the fourth quarter 2000, 1990 results in detail.
If you need a year over year conversion is the best way to reveal all performing.
All percentage change I'm going to gain there will be on that basis.
Once again, please note that all figures that had nascent they'll be on b.
Total kidney during the quarter increased by 48% to 17.8 bidding.
The girls speed of both get these models rebounded from the previous quarter.
Yes, we often can they go back 59% one punk by building on our non he's built can be a neat but the again I'll quote Forum is again made an increase of 49% to 16.3 bidding.
Total net revenues increased by 26% to 2.8 billion.
Breaking the style product sales revenue increased by 33% the one cost rebidding.
On the services revenue increased by 22%, you'll 1.5 billion during the quarter.
The increase was primarily attributable to a robot to build your our single state campaign.
I was about incremental contributions from new brands.
In particular products sales girls was also boosted by the contribution from the newly added entertainment you'd actually Brian, which we launched in December.
Service revenue was impacted slightly by the weaker performance well men's and women's clothing.
Total costs and the operating expenses were 2.6 billion compared with two bid in the same quarter last year.
In particular copper production increased to 1.1 bidding from 719 meeting last year.
Primarily due to higher costs associated with the increase in product sales revenue.
Due to category mix change our gross margin for product sales.
He kind of slightly 18.2% compared with 19% a year ago.
Our blended gross margin totaled 62% a decline 2% made was mainly due to an increase in proportion of products sales revenue.
[noise] fulfillment expenses increased to 665, meaning from 500 pound meeting last year, mainly due to increasing dnbi from I'll gets built and other consignment model.
The warehouse rental expenses.
I mean cuisine warehouse capacity to address additional growth opportunities.
The increase was partially upside by improvements vacancy.
Our cost control initiatives continue to drive operating efficiency improvement and optimization of being able to read resources.
As a percentage up yeah conveyed our fulfillment expense we issue.
Input to 3.7% from 4.3% a year ago.
My the fourth consecutive quarter definitely will achieve greater operating direct fulfillment.
Sales and marketing expenses increased to 648 meeting from 544 meeting last year.
And the as a percentage out yen Bay, our sales and marketing expense ratio improved to 3.6% from 4.5% a year ago.
The decrease in sales and marketing expenses as a percent Scott can they reflect the increase in battery.
One of our busiest girls to scale you, especially in the thing that Stacy then on the effectiveness of a mapping activity it moving up to singles day back into third quarter.
Technology on the continent expenses increased your 109 million from 84 meeting a year ago.
They continue to you that me no later than on the product ideas and yellow bar, if the plane oelkers, how the shoes streamline manner.
During the fourth quarter I'll choose on 19, our investments in innovation and the presentation Hotel fund hits the remaining.
Compared with 21 million last year.
Leveraging from expanding busy scale technology on the comp and take advantage as a percentage up Yeah me declined slightly from Europe on 6% from their 0.7% a year ago.
Yeah, Hey, fancy increased to 67 million from 43 meeting last year.
Teeth into increased spending in the me its fifth you corporate strategy and the be financed stop the business skills.
They also accrued a bad that along of nine meeting during the quarter.
A coffee table from one that's big brand partner in the basement clothing category, which began its liquidation in 2019.
During the quarter, we incurred at night.
Other operating loss for two meeting.
Which was mainly due to the lobby they do that third party verifier, all the 45.5, meaning that had amazing earlier.
All in all income from operations decreased to 196 mean from 230 meeting in the same quarter last year.
On the out in marketing expense was 7% from 10.4%.
Non-GAAP basis income from operations was 217 meeting a decrease of 12% from 200 <unk> He southern meeting last year.
Non-GAAP operating margin was 7.8% compared with 11.2 person in the same quarter of last year.
As a reminder, operating income as a margin during the quarter included.
45.5 meeting impact from the fire.
Outside the interest income interest expense totaled 6.8 million compared with 3.5 meeting a year ago.
They include interest then was mainly due to the insurers I'll call what football April 2019, which also embedded that accretion treatment, which is a noncash item based on the accounting treatment associated with see dependent.
Income tax expenses totaled 38 meeting and the way it had an effective tax rate of approximately 19%.
Compared with 13% last year non-GAAP basis.
The increase income tax wasn't many due to a higher effective tax rate as some tax incentive policy was applied to the same period last year.
In the fourth quarter net income attributable to ordinary shareholder sell Bolton totaled 141 meeting.
Basic and diluted net income attributable to ordinary shareholders Hot button for 80 ads.
Well two pounds 42 on the coupon 36, respectively, compared with three pontoon Kenai and the Super on 17, respectively. During the same period last year.
Non-GAAP net income attributable to ordinary shareholder Balkan totaled 161 meeting.
Basic and diluted non-GAAP net income attributable to ordinary shareholders know about them.
Well to fund 77, and the coupon 75, respectively.
Compared with three parts 50 night and the so called before do you see respectively for the same period of last year.
As of December 34th 2019.
I had two between cash and the cash equivalents shortcoming investments compared with 514 meeting as of December 34th 2018.
A significant improvement in cat was mainly attributable to a strong positive operating cash flow for full year 2019 are the result of working capital optimization has allowed our TB dependent Mbeki April 2019.
Turning to guidance they continued to closely monitor the ongoing and dynamic across the globe and now carefully evaluating its impact our business.
Oh since that her why the macroeconomic environment, that's not in Turin, whether we anticipate that he had made during the fourth quarter 2020, they'll go by at least 10% compared with the same period last year.
We expect total net revenues during the fourth quarter of Tucson Funky.
To be between 1.4 bidding on the onetime 45 bidding, which you got the girls straight up 9% he was 13% compared with the same period last year.
Even though is the popular science of the recovery of our business. There are many I know or to the duration and the severity of the pen timing.
We have insight into a temporary basis ban who you're not revenue guidance until we have greater visibility.
This concludes our prepared remarks, thank you.
Operator, we're now ready to begin to rise session sat.
Certainly ladies and gentlemen, we will now begin to question and answer session. If you wish to ask a question. Please press star one on your telephone and wait for wanting to be announced if you wish to cancel your question. Please press about asking.
Once again, if you wish to asked a question you May press star one on your telephone bad.
Your first question comes from the line.
Did you say, yes. Please ask your question.
Hi, Good evening management, thank for taking my questions and reaching all route and safe.
I have couple of questions number one in sad Oh, no. Despite the impact from the virus.
He thinks that the night at 13% net revenue guidance is actually not too bad and.
That's a big color in terms soft the GMP given you actually have a high phase.
Sure.
If I understand correctly last year that well see hadn't kept friend that was dropped out of three Q <unk>.
Be 10 separate and what would be one Q GMB growth looks like and then on your revenue guidance could you give us some colors in comes off the breakdown software product revenue versus the service revenue growth.
And what the bread category that actually have market their fleet, a fact that more doing these outbreak pita bread and what Frank categories actually sit there and see.
He moms are on track thank you.
Okay, Lisa it's Robin.
I'm facing the I I'm bearing the faith the fifth Mark So it's not to maybe not very clear, but I tried to speak loudly.
Yeah about to the Q1, Aldo cut the Guy that I think at the Port scrapping is there another about the category Yeah, we do see some ah negatively impact on the inside of him his closing because you know.
Oblast or has been close on that the people say that though there is no much de mob about to above they stop.
Fortunately lately in the meantime, they see the suppose there is not bad at all on the also with the newly added right away at up in the.
Second hop off last year. It looks that are for the Tia Maria and also for the revenue I think a pretty in line with yeah make girls.
That's the overall picture about about a kiss a lot.
So there wasn't any the non apples to apples comparison under GMB growth rate.
Or about to I mean bother the I think about the offense side you know a as I remember the pattern is a you know we have lately operated at two times inside a in a lot Q1.
And ER. Other this year, you know primarily focused on the wireline side, but the the girls self defense as is pretty strong since the last Q4 under continuing the growth in Q1. So you. So I think a you know a prime or eight offense I think there's no big change from a lot to under this cool.
The the Japanese side.
I see I think and then if I may.
You know in comes off the machines outflow for one Q given the impact on revenue could you give us some colors in terms of how we should think about for once your margin. Thank you, yes, our margin they'll be a there'll be drop you know because you know way how last year.
Revenue growth I know, we have some some cost associated that you know with Oh, there's a fixed the park. So our our modular be dropped about to definitely devalued up hub capable right. It's not a is not going back to market.
Okay, great. Thank you.
Thank you.
[noise] once again, if you wish to asked a question you May press star one on your telephone keypad and please limit yourself to one question. If you wish to ask a question again, you May press star one on Yankee back again to get back on thank you.
Your next question comes from the line of Thomas Chong of Jefferies. Please ask your question.
Hi, Good evening fashion management, taking my questions.
[laughter] question about the yeah.
She actually and go back to new trends.
Launch that they said that call I'll be submitted he's at the moment.
Management, Hawaii, some action a 40% 50.
First off the G.M. equal weight.
An acceleration.
In Q2 and.
The margin trends or should we expect.
It will be somewhat like stabilizing in Q3 and margin expansion happening truthful.
Well get that quantity <unk> at this time, but any quantitative caught up would be great. Thank you.
Okay, Hey, the is the is the Robbie and again I mean, it's very hard to a killer app made off for let's say that trend or you know based on our internal trend on the base you know what's the estimated in the you know a in the recovery in May.
Mark you know, we think away are you know a still very positive about our can they and their revenue growth for this year I know, we hope you know a that ER corner virus outbreak can be you'll know a you know can be.
No.
If the scared again very soon I know, we will get back to the the governor girls trends.
About the margin definitely you know because the way have something to that.
That's typically about our business you know are suppose there's no moxy for evening and upgrades you know definitely there where do you believe Javier.
It's a healthy margin on the also.
We thinking though is that there's no or is that there's not a bad thing even worse. They are within marketing this year could be in the mid upon between 7% on a person the basically they'll be recovered from the last year.
Thank you.
Thank you.
Your next question comes from the line of Pina long of Credit Suisse. Please ask your question.
Hi, Thank you manage for taking my question My question is actually.
Hi.
Hi.
And also what kind of teaching the distribution.
Fusion and also we noted that in the fourth quarter distribution model revenue actually.
So based on the brand.
Having for 2020 <unk>, how should we look had revenue mix gross margin. Thank you.
Uh Huh I think I can I couldn't give you some a number of Robyn a under then I think he can pop out there you'll about the Aldo coupled with year.
Yeah, We you know a wait till you know a or I should say oh were not intentionally to develop I'll give you both in model on the way how we have a worry tariff with blacks in process, you know to decide which ones they tend to be built in.
So but back in the history I think given all the way we came to allow patterns to be trend that is built on the nonsensical children from both yeah me on the revenue.
Balance.
And regarding the Brad I think the Inc. in Q1, you know, we add up or something like a home furnishing birthday Mercy you know global for corn can Brian and also the domestic a brand about in the.
In the in the house Kurt I.
Well they bought a unfortunately, oh I mean Q1, obviously, that's the though because they sent out the brown. The because you know Oh, we cannot see and they'll go out for two to its got the with the or with a plan that the partner.
So I think they too are they will affect the whole years.
Neil Brian I could they said speed.
Yeah. So let me go back to you regarding the a pipeline question. So.
I love that cautiously optimistic that comes off the pipeline growth. So are there are some kind of pocket aside from the called in 19 stuff. So a more and more aggressive <unk> that are getting online and getting digital lighter art. This is getting more imports. So we had been rich and touching more and more problems.
A lot of brat, some off a very stop right there when I switched GRP since 2000, and so and develop brands are going suggests it went up there all I business with that so we're seeing a very strong ipi and then I can hear company and that we are very Oh this coming up.
[noise] [noise], thank you I how about.
They just model like distribution.
Thank you.
[noise] peptide savvy, and though we carefully black that it's still can model, but the I mean, the way it's about balancing the hit that you'll kind of take that as Oh.
Are you know a I think they know about like a 90% yeah may come in from down you feel kind of 10% from a 10% get made from to field and his colleagues.
A you know the print publication.
Okay got it thank you very much.
Okay.
[noise] [noise] once again to give more people opportunity to US question. Please keep yourself to no more than one question at a time and you May Press Star. One again, if you have a follow up question. Thank you.
Your next question comes from the line of the.
Natalie Wu of <unk>. Please ask your question.
Oh, Hi management. So thanks for taking my question.
Hi, John on behalf of Natalie.
We see the outbreak, it's becoming a global issue if that's really our overseas brands are shutdown, a what difference impact and the financial impact where we have a and my second question is into club. My remarks are you mentioned that the company is positive free cash flow has reached a record high or would you could share more color I'm Holden.
Free cash flow out for example is it because we are having less capital expenditure them before or we are having more elaborate just on the balance sheets and how should we expect direction going forward. Thank you.
Right.
Yeah, Let me Oscar the first part of a question and then robbing with some follow up on three of questions.
Oh, we keep a very close communication with our client base and.
So far there's not a big worry I'm concerned about the supply side.
I think the part of the reason is that most of the supply chain steroid though in.
China and also Asia region, especially China. So we are seeing quite constant supply off the products.
And the there's no.
Big signal from the brunt side.
Telling us about the difficulty potential give go this office supplies seamless even near future.
But anyway, we will be a closely watching the situation and that just.
You know sales tactics.
Along with that yeah, so that up almost like okay. Yeah, Let me get the second question about the positive cash flow. Yeah, we do have a lab or capital expenditure in take until sometime do is up I like a 50 million last but to our free cash flow over 100 million.
I mean, it's you know you know way how far it strong operating cash flow positive operating type of wage you'll know drive through the free cash flow positive.
I mean, that's what we eat for the whole year last year. For example, you know what would I remember we have maintained about you know how we can you know a rapid edged up a the collection process. You know on the also the automatic or you know the bidding system and the volatility how Oh I guess.
With that or do you.
You know even inside the company to exercise the practical so that's really no makes the results you'll know turned to the cloud deal for the capital.
Thank you.
Your next question comes from the line of Sally Chen F.C.L. Sai. Please ask your question.
Yes, Hello, Good evening management and thanks for taking my questions I wish everyone. Good health doing just curious I actually I have two questions. Maybe I just go over the first one especially is actually on the monetization trend change at all since Wednesday.
I agree with management that you know the overall take rates probably not meaningful because you know it's very heavily impacted by category makes and then brand makes et cetera. I'm. Just wondering say if we look at does on a more granular level say on the Petrobras basis, a first time away, we negotiate contracts with Neal brands on the old renegotiate you renew.
Well with existing brands, how do you see our brand partners value out of new value added services like the tools. We just bought a show like new delivery services stayed how even called do you think potentially going forward we could.
If we could that enhance these kind of a they added services offerings, we could we see a patent monetization or take rate up right.
If so how should we think about the timeline when we could start to see meaningful contribution from the monetize sensation of these new new tools.
This is my first question.
Oh, Okay. Robyn you know people around two across that they give you more color positive creates a flood or for the last kill for you know a maybe when you do the very quick math, you'll see there I like to 2% job in the take rate around fuel person shop.
We have about 1.5% to come in from the pricing change as we mentioned the way how US where you say you know a in creating a you didn't kill for Gen Bay and a another there are part of 5% coming from even the almost even if <unk> last marketing spending and also a lot.
No. The two surveys due to the slowdown of the men's and women's closing so definitely like a full picture of the take rate change in Q4, and also regarding 60 years or take rate you know we eat away. Thank you know, we still have very good potential to improve while the take rate.
And also about the monetization you know for example, you know the the revenue guidance what kind of gave you which is a in the is doing the girls I seem to sex for our logistic service. You'll know we can provide more service to the partners. You know a then the either you know competitor.
Hers, so and also for the new brand say no. We are gravity I'll walk you made them for the new idea service, including both or do you think said that digital marketing services. For example, I know we wait using could you know with how quickly they show to improve for this year. Thank you.
Thank you might hear sorry, how about another quick question actually is to follow up on the solo <unk> guidance for this year given the impact from the outbreak I guess my tracking it seems that the January Oh, well file plans look quite healthy and that in February we saw a moderate and not that big decline can be.
Gross well keep brands and then it seems that for the much I saw that the eight eight much promotions period sales force them off I'll keep my it's actually rebounded very strongly so I'm just wondering if nice make could share you know how you have seen the recovery trends so far as people gradually get back to work and that supply side frustration.
So like logistics also you know continued to recover a it's probably not a after February yeah and much. Thank you.
Okay. Sorry. This is so let me go back to you about the question in the Q1. So in January we get pretty well, so we dramatically between kind of talking here. So the whole Saturday. It wasn't that are actually you know the total that kind of the cold in lighting stuff. So really just you know a lower down like a mounting and lower down.
Communication efficiency, something like that so and from the beginning of March, especially from the big happening like we say you mentioned about eight March so most of our key brands are recovering very well. So I can say I never covering about 80% their normal or when they back to that while why are you know a in the same campaign.
And we are seeing a cautiously optimistic about you know that you, Andy and well keep growing in the coming quarters.
Before the virus.
Any kind of importing.
So now I'd just like the Robbie just mention it there.
With a lot of knowing how to be a part shadow space on the important virus active. So so yes, we can say that most all keep rent are recovering very well the marches, leading pretty well, we can see and Ah we consciously optimistic about water. So did the mounting has recovered.
Essentially 100% and the supply you know we have more and then try them all part of putting a life. So yes, so everything is getting better.
Right that's good to hear thank you.
Your next question comes from the line of John Chile off Die well. Please ask your question.
Oh, Hey, I'm. Thank you very much for taking my question on my a couple of questions. Your first of all on could you kind of.
You know talks about the latest development of many programs on both the contribution to your overall, but it seems like that I'm. You know many programs has been doing pretty well over the past year just quickly on a follow up on the operating margin I think Robin you mentioned I hopefully you can reach youre.
Able tweets, 78% you know this year.
Walk us through whether that will be driven by more on a faster on top line growth into second half or pretty much more on the operating leverage on the offer expense I just want to have a.
A brief sense on how you guys already been able to try it out after things Tom do normalize. Thank you.
[noise], but you always Robyn.
For the meaningful Graham Yeah, I think we made a great progress you know are especially in the corner virus outbreak.
You know you sound right tools to being could be to an online to offline. Some of the partners come to us to us up to you know tool provides surveys you know for their outlet stores, so that they can't use it equal our lives.
But the in both T.N. Magid revenue I think compared with the total number of about two and a the meaningful or I mean do very mature I know, we don't to pay much attention to the jet may add the revenue contribution is that even though we just want to capture the based model. So that you know we have.
I think all the way all we can ramp up our services you know a true the brand partners at the set up that Brian E Commerce or system in a in immediate program ecosystem. So that's kinda like our main focus and she's not focus on generally and the revenue compared with our the.
Total number.
So that's a fourth question and about the ER operating profit margin I think you youre right a weight both drive a this one by improving our revenue resources from our existing or the new Brian on the also we have a worry tied to you know cost control at the.
ER efficiency improvement you know are applied our company. So that we can you know a drive hopped operating margin.
Your next question comes from the line and how off Th capital. Please ask your question.
Hi, Thank you management. So my question is fish, so there's no comment.
And just before and I'm sure there's lots of things change them. So from a youre from my side to look at your like a prime side.
I wonder.
Uh huh they and.
You know, how well you communicate with them do they have.
You know eat in terms of brand strategy do you do they have any new thoughts about you know in the future.
She was you know a you know track a guy what presentation there Brent.
In the us consumer side, so as you mentioned at your remark.
Yeah. The apart rose said that you know yet in the you know him back in that area and Jay package, but not yet so I wonder what's changed in the consumer side and so going forward. What do you see can be the trends and Sally mines the supply side. So why.
You know consumption side. Thank you.
Okay.
So those are very good question. So are the first one is related to the rent site. So we see we communicated with a lot of I'll keep my partners and they are being very positive to the digital especially here all I visit.
Several initiatives the aren't going to.
Approach the first one as they are stress and a lady are not precise on that digitalizing, the our business and realize that.
Commerce are becoming more important, especially under this overall situation not country, and which means that you want to just lay more episodic and that there are putting more strategic efforts into I decided to mid stepping down there, but the second part is in trucks off the a part of inventory allocation. So most of our key brands are.
Hello, Kitty a lot of API, especially our exclusive offline product to be.
Because as you can see that and again it has several monster off like this it happened facing a lot of problems and challenges so putting your offline resources to online is really helping all I feel that the second.
Our part is more about allocating.
Brett walking strategy and that Youre walking study, so they realized that especially a long ways of development properties of the marketing like a light sweet Kale and we'll see some boy more brands you feel like that and wanting to invest more on content management and a a rich and they're all like you know a constant developments provide more accurate.
In constant to the right consumers.
Right I think they're more and more digital marketing spending so I'll be very lucky reallocated to online. So that's all three approaches from that Brett side. So from the consumer side and we haven't seen a lot of behavior change from the consumer side. If you can you just you know beauty apparel category dropping down not because they are.
Great. Thank God.
So it doesn't make any sense for more women and men purchase a new apparel, because youre thing I call. So maybe that was just about all their kind of the.
Under the a big environment for now and that we haven't seen any kind of changes you know from the consumer part. So we foresee when everything is getting better consumers can just freely go to the street and back to your normal life and normal lifestyle, I think that category mix and older consuming our volume recovery.
Uh huh.
Okay.
Thank you so much thank you.
Once again to give more people the opportunity to ask questions. Please keep yourself to no more than one question at a time.
Your next question comes from the line of be lung of high Tong International. Please ask your question.
Hi management. Thanks for taking my question I, just I'm questioning on when I ask is related to what have been some mentioned during the prepared remarks on hits Vincent said, the 2025 kids will be on X celebrate a brand portfolio just wanted to know what what that meant you know does that mean that we should expect more brand partners. So you know brand partners would be.
The larger that's my first question and just a housekeeping question could management share.
You know de amounts of JMP that was from existing or same store clients for quarter, one guidance in quarter four thank you.
Oh, Yes citizen you my prepared script, but I think you heard the other person to answer the question Oh Yeah.
The portfolio and locker, Brad potentially so yes are we missing a very strong pipeline in the year 20 is funny and a according to our existing.
They are being more qualified so this year that our strategy is very clear we are changing quantified yet so.
Only.
On the poly Jenny or Jamie.
Quality knowledge, Dnbi revenue and profit Robuchon meeting from the Brett.
As far as we can see in Q1, you Brad we can route in dollar, including a very large spending in the home furnishing anyway are very high quality, Brad you know and our bodies and in our strong hi Fi well see a laptop the same kind of qualified Brent coming up yes.
Yeah, I just took.
Sorry, sorry, just took effect when you say high quality does that mean, it's a larger scale as Brent mentioned sorry. Thank you.
Oh, yes about national quantify the deep breath, which means that we had a better take rate we have a wider range of the scope of work we have more stickiness, what the bread partnership we have a longer term.
Okay.
Yeah, Hi, quality girls I think it that's kinda like or a different fit in a different scenarios you named the top line just as a June fly expense on the into in the coffee internally, we have a worry a strong you know a cost reduction initiatives.
And Ah you know to create the efficiency and the you know and make all come our comp cost structure more healthy about it. So that's kinda like a you know different scenario. So we are working now.
The back to your last question I think you ask about that same store sales growth is a 51% seemed those same store sales grew up gross in Q4.
Thank you and what was the assumption for quite a bunch M. B, how much coming from same store sales growth.
We don't disclose in number yet and Oh, we are how what kind of in the next or.
Thank you that's really helpful.
Okay.
Your next question comes from the line of Joyce Zhou of Bank of America. Please ask your question.
Oh, it means and James robbing Wendy.
Oh, my concern with or without a lot to that's pretty good question I actually just wanted to clarify cost it's.
Actually the first half an hour in Grand probably it's going to suffer a like you're not shock. So shall we act more our growth actually good I.
And I know, Brad, Let's say you know we know we launched a hub.
It's quite right actually accurate Hi, Merit late.
Your new grant will contribute bigger chunk of T.N. compared to last year, and you'll get a qualitative color I'll.
Probably take rate on margin profile of this new brands and there's more follow up is I. Once you just get it right.
During the call run a virus like you're at a time, we know basically all at Oh.
Brad or like merchants kind of stuff, where they financial pressure I, we know.
Well they are giving like.
Oh rebate to Alexion I'm, just wondering from our service provider.
Are we going to Exterran Packer intense Oh no.
That's it or like you know services I talked a yet any qualitative color what how thanks a lot.
Yeah, it's robin.
By the or ports question I think you know we wait you expiring some kinda like a slowdown in the mens and womens a power a apparel continuously in Q1, you, especially in favour eight but also lease expired. The you know the delay up the.
New store opening.
For the new brands you know a so are you embedding the you know with leasing Q, though it's really a pent up you know the so I think the brands, who enjoy what growth rate in Q1 or the downturn being in Q1, but in general I will say you know out or do you have moved it was still.
You know or at least 10% you know or you know the also that's partially contributed by the new brands that we acquired a in the last year Richardson a lesson Carl mouse.
The the second question drop the yeah, we do.
See some financial crisis in some of our brands, but not at all and at this moment I think a you know we like either spares anything about the term change or something because you'll know they rely more on the oh the online sales to drive.
What happens there, although you know a crisis.
Additionally, about a service they know what she's accounts receivable you know at this moment to be see some delay up the payment by the way closely monitor you know the collection process and a up till now a we think that's pretty normal except when things happening.
Somebody they payments by the by the partners. Thank you.
Oh right now I would like to hand, the call back to Ms. Wendy Center for the closing remarks.
Thank you operator.
On behalf of 2019 I'd like to thank you for your participation on today's call is doing what anybody formation I teach immediately I think I'm not I don't know thinking about doing that today. This concludes your call.
Ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all disconnect.
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