tearach
2021-03-15
Comment
Time To Buy These 2 Top Niche E-Commerce Stocks
免责声明：上述内容仅代表发帖人个人观点，不构成本平台的任何投资建议。
分享至
微信
复制链接
精彩评论
我们需要你的真知灼见来填补这片空白
打开APP，发表看法
APP内打开
发表看法
5
1
{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":322695519,"tweetId":"322695519","gmtCreate":1615800414431,"gmtModify":1703493141536,"author":{"id":3575256032463698,"idStr":"3575256032463698","authorId":3575256032463698,"authorIdStr":"3575256032463698","name":"tearach","avatar":"https://static.tigerbbs.com/861adeae93387d8335f9550889bafb00","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":18,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>Comment</p></body></html>","htmlText":"<html><head></head><body><p>Comment</p></body></html>","text":"Comment","highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":5,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/322695519","repostId":1199587015,"repostType":4,"repost":{"id":"1199587015","kind":"news","pubTimestamp":1615800246,"share":"https://www.laohu8.com/m/news/1199587015?lang=&edition=full","pubTime":"2021-03-15 17:24","market":"us","language":"en","title":"Time To Buy These 2 Top Niche E-Commerce Stocks","url":"https://stock-news.laohu8.com/highlight/detail?id=1199587015","media":"seekingalpha","summary":"SummaryE-commerce sales are expected to grow to ~$6.5 trillion by 2024, or about an 11% CAGR from 20","content":"<p><b>Summary</b></p><ul><li>E-commerce sales are expected to grow to ~$6.5 trillion by 2024, or about an 11% CAGR from 2020's $4.3 trillion.</li><li>Many e-commerce stocks surged during 2020 as pandemic tailwinds grew, and valuation resets in tech amid surging rates could provide some attractive entries.</li><li>Aside from global and regional e-commerce leaders, two niche e-commerce leaders provide strong forward growth outlooks: PDD and CHWY.</li></ul><p>As a result of the pandemic, e-commerce essentially shifted to a 'go-to' shopping method, witnessing a huge acceleration of growth across the globe. However, the industry remains highly fragmented, with global and regional leaders in the e-commerce focused space facing increased presence from brick-and-mortar establishments building out omni-channel capabilities to capture a piece of the growth from this shift in consumer spending. While there's no denying that Amazon (AMZN) arguably holds the reigns on the industry, other leaders have already cemented that status in their respective regions, like Alibaba (BABA) and JD.com (JD) in China, Coupang (CPNG) in Korea, MercadoLibre (MELI) in Latin America, and Shopee (SE) in Southeast Asia. While some of these names still provide solid potential, filling a niche in e-commerce and growing into a leader in that particular niche could provide a longer-term runway for growth: here, the two names that stand out are Pinduoduo (PDD) and Chewy (CHWY).</p><p><b>Broader E-commerce Trends</b></p><p>There's no doubt that the pandemic has provided a significant tailwind to e-commerce operations, but the segment still has some high expected growth over the next few years.</p><p>Global e-commerce sales were estimated at ~$4.28 trillion for2020, +27.6% on the year, with regions like Latin America seeing some outstanding growth. For 2021, e-commerce sales growth rate is expected to decline sequentially due to brick-and-mortar reopening and the pandemic pull-forward, to about 15% growth to $4.9 trillion for 2021.</p><p><img src=\"https://static.tigerbbs.com/09cb0da38ddca8be7397cce06b4ea9a8\" tg-width=\"640\" tg-height=\"340\" referrerpolicy=\"no-referrer\"></p><p>Graphic fromActivate</p><p>On a longer-term trend, e-commerce sales are expected to grow to ~$6.5 trillion by2024, or about an 11% CAGR from 2020's $4.3 trillion. At that projection, e-commerce would hold about 23% of total retail sales, up from ~18%. Categories with the highest (>50%) penetration - clothing/accessories, grocery, household products and beauty/personal care - are categories that have sustainable online growth and repetitive purchase rates, aided with higher adoption of new methods like buy-online, pick-up in store.</p><p>E-commerce growth looks set to continue at a quick pace even after a massive surge during 2020, leaving a lot of room for leaders and niche players alike to grow into; Pinduoduo and Chewy both sold off heavily over the past month and a half, and provide more attractive valuations to capture strong forward growth.</p><p><b>Pinduoduo and an Agricultural Niche</b></p><p>Although it remains focused on its agricultural niche, Pinduoduo is very much a leading e-commerce platform. The company generates about4% of global GMVacross all categories, making it the fifth largest marketplace per GMV, behind Alibaba's Taobao and Tmall.com, Amazon, and JD.com.</p><p>So how has Pinduoduo already established itself as a leading global player in just 5 years? The company took a traditional marketplace with offerings across nearly all categories, and revamped it through a social,team-buying model, originally targeting lower tier cities to attract price conscientious consumers. Instead of a search-based experience, it provides a catered, 'virtual bazaar' feed personalized to each user (a \"'you don’t know what you want but happy to discover'\" style).</p><p>Because of this unique model, Pinduoduo has an immense user base, with nearly 650 million MAU and over 730 million AAU, just shy of Alibaba but far ahead of JD.com on anAAU basis.</p><p><b>What makes Pinduoduo an interesting purchase, with shares down ~20%?</b></p><p>Aside from sharing a traditional marketplace with the unique team-buying model, Pinduoduo's leverage of its huge user base and connection with local farmers and grocers could be difficult to replicate at scale and at cost by JD.com, Alibaba, and Meituan, leaving the agri-commerce and produce niche mainly to Pinduoduo. China accounts for about one-third of theworld's e-commerce buyers, and over half of total e-commerce sales, leaving a huge market to capture.</p><p>Pinduoduo continues to find high engagement within its large community, with average annual spend per active buyer (on a TTM basis) up 27% to nearly RMB2,000 (US$294).Agricultural GMVdoubled for 2020, hitting over RMB270 billion (US$42 billion), ahead of an original RMB250 billion forecast from management. Translating growth in GMV to revenues and earnings shows bright potential for Pinduoduo, as it sees that \"digitalagricultureincreases the efficiency of the food supply chain and safeguards food security at the same time,\" solidifying its belief in the potential in the revolution of agriculture.</p><p>To expand its presence in connecting farmers to consumers, Pinduoduo launchedDuo Duo Maicaito provide next-day grocery delivery and fresh produce, competing with Meituan (HK:3690) in the space. The shift away from traditional wet markets has allowed grocery services like Maicai to fill this space, since customers can purchase as late as 11 PM and receive orders by 4 PM the next day. Through the app, customers have a large selection of fresh and local produce, and also can take advantage of the low-cost buying model.</p><p>Pinduoduo is on track to quadruple revenues to US$8 billion in just two years, from FY18 to FY20, and securing this niche while still offering the traditional marketplace should see revenues grow at a 40% CAGR through FY23 to US$22 billion, quite an impressive runway. By then, Pinduoduo could generate EPS of $2.50, giving it a forward PE of ~64x - while this does look quite high, it's worth noting that Pinduoduo still hasn't even reach out-and-out profitability, and should see a shift to ~$0.30 in EPS for FY21, thus giving EPS triple digit growth each year through FY23.</p><p>What further separates Pinduoduo from Alibaba and JD.com is its margin profile, albeit one that could face some impacts moving forward. Pinduoduo has tremendously strong gross margins, fluctuating between 72% (Q1 '20, where the pandemic heavily impacted operations) and 85.7% (Q2 '18). For comparison, Alibaba's gross margin is ~44%, while JD's is ~8.7%. With margins above 70%, Pinduoduo could see Q2 '21 (or possibly Q1) show gross profit exceed operating expenses, leading to the inflection to out-and-out profitability.</p><p>However, earnings could come under pressure from a recent initiative to further develop logistics infrastructure to be more suitable for perishable handling (increased costs to develop compared to leveraging third-parties), as well as continual increased expenditures in marketing/advertising and headcount/R&D in regards to AI research focused onimproving crop productivity.</p><p><b>Some risks do exist</b> even amid the selloff, as Pinduoduo still trades at a premium to Alibaba and JD.com: ~8.7x FY23 sales, compared to 3.6x and 0.7x respectively, and currently still unprofitable. However, rapid revenue growth and strong earnings leverage combined with the agri-commerce moat serve as a safety net to this valuation to a degree. Pinduoduo is on a strong upward trajectory aided by the pandemic, and could have a lot ahead in AI agricultural innovation.</p><p>Unlike JD.com and Alibaba, and other larger e-commerce platforms, Pinduoduo's niche does not offer seamless transitions to cross-border transactions, and could serve as a barrier to that, keeping Pinduoduo confined to China. This could ultimately cap outright user growth, leaving Pinduoduo reliant on more transactions or more spend per buyer in a long-term forecast (>5 years). However, Pinduoduo is likely safe from potential antitrust proceedings that are hitting Tencent (OTCPK:TCEHY), Baidu (BIDU), and 10 others - it doesn't have a fintech arm and doesn't have the same amount of presence/sway as those involved.</p><p>Margins also provide a risk to Pinduoduo's profitable inflection likely ahead this fiscal year. Although it does have a superior margin profile, dedication to constantly spend more on marketing/advertising and offering more promotions/discounts all can cut into earnings, and if expenses grow more than 18-20% each quarter, the profitability picture could be cut nearly 30% lower to $1.80 by FY23.</p><p><b>Chewy and a Pet Niche</b></p><p>Similar to Pinduoduo, Chewy is currently geographically limited to the US, and while it does seem to be an unconventional, heavily-pandemic aided e-commerce name, it has established itself as a leading player in pet-related products and is expanding product offerings into telehealth and eventually D2V (direct-to-vet) pharma.</p><p>The pet-care and pet-related product industry has not traditionally utilized e-commerce as a sales channel, instead of relying on brick-and-mortar stores to drive sales.E-commerce penetrationof pet food/treats/related products likely hovers at around one-quarter of the market, putting it at about $14 billion in sales through the channel. As such, Chewy could still command about half of the market, with Amazon close behind at nearly 40% share. However, this is still a more speculative (riskier) play.</p><p><b>So what makes Chewy an interesting buy as shares are down ~26%?</b></p><p>Pole position atop its segment is a large positive, as other pet product related brick-and-mortar stores don't have the same depth of online presence or leverage of such a strong customer base - while Amazon does present a growing threat, Chewy still has the giant beat, with strong growth in customers and retention through Autoship, as well as a brand moat with over 2,000 brands offering 60,000 products.</p><p>Chewy saw some impressive growth rates in revenues as \"traffic, conversion, orders, and customer retention all strengthened from September into October as customers shifted their shopping behavior this year.\" Revenues rose 45% for Q3 to $1.78 billion and 46% for the 9M period to $5.1 billion, with the company on track for $7 billion this fiscal year.</p><p>Customer growth remains strong, with Chewy seeing active customers grow 40% to 17.8 million from 12.7 million last year. Customer retention, assessed through Autoship sales, still hovers at about 69%, dipping slightly lower during Q3 (although that is likely due to the large influx of customers, as $ of Autoship sales per active customer rose slightly). Dollar spend per active customer rose just over 4% to ~$100 per active customer, up from $96.</p><p>From a long-term perspective, Chewy should be able to grow revenues by ~$2 billion annually through FY23, reaching approximately $11 billion in sales, putting it at ~3x revenues at the current valuation. Consistent growth in revenues at this rate (~20% YoY per quarter on average) will be derived from customer retention remaining at around 67-70%, or through >20% YoY growth in new customers each quarter through FQ4 '23.</p><p>One sign for maintenance of that retention rate is percentage ofconsumablesper total sales, which sits at just about 70%. Consumables are likely the key driver for Autoship and continual purchases, as these items (foods/treats/etc.) are much more constant needs than toys/beds/etc.</p><p>Chewy is also seeing net losses shrink, with a net loss of just $7.7 million, adjusted for share-based compensation. EBITDA has grown to $33 million, very small, but pointing to signs of profitability by late FY22. Because gross margin is small, just 25.5%, Chewy is unlikely to see rapid EPS leverage, with just $0.35 in EPS possible by FY23. Thus, Chewy trades at quite a high forward PE, but given its position atop the pet-care e-channel, could sustain this premium with relatively little competition.</p><p>The pet food/treat/care products market doesn't exhibit a rapid forward growth runway, placed in the high-single digits; working with the prior $14 billion figure, 2023 sales through e-commerce could reach just under $18 billion in a rudimentary estimate. Therefore, leveraging other channels, like D2V pharma, and free telehealth visits for Autoship customers, could be vital in driving engagement and spend per customer higher, which are necessary for revenue growth projections.</p><p>Although Chewy does have good potential as the leader in pet-focused e-commerce, it has<b>some major risks.</b>Chewy'sbalance sheetis underwhelmingly weak, as the company had been technically insolvent through Q3, with $56 million less in assets than liabilities (this could be subject to change during Q4, with revenues near $2 billion likely allowing some more cash to be added which would resolve this issue). But with just over $500 million in cash, raising capital is most likely already booked in the future, either through debt or dilution.</p><p>Margins also present a risk, as revenue growth isn't extremely rapid, and inflection to profitability with high EPS leverage also isn't likely. As such, margins will need to be maintained above in the mid-20% range to ensure consistent profitability in the long-run, as utilization of free telehealth visits could crimp margins with some excess incurred costs relative to increased revenue generation.</p><p>Even though Chewy is a segment leader, the pet-care industry hasn't been a wide adopter of e-commerce, and such a pull-forward from the pandemic could fizzle out, and disappointing growth in customers moving forward would shift revenue projections down by ~10% to around $10 billion, as that would likely be met with lower-than-expected Autoship sales.</p><p><b>Overall</b></p><p>E-commerce growth is undeniable, and global, regional, and niche leaders alike have positive runways ahead with increased e-commerce penetration relative to total retail and large dollar gains in sales. While it's hard to argue against outright leaders, niche players Pinduoduo and Chewy offer good potential for forward growth due to occupancy of the pole position within their respective niches of agri-commerce and pet products. Both are still quite pricey, but have sold off pretty heavily with the tech-selloff, thus providing more attractive entry points after valuation resets. Pinduoduo has some rapid room for revenue growth amid surging GMV and could see strong EPS leverage amid a shift to out-and-out profitability in the near future. Chewy's segment doesn't boast the highest growth rates, but large market share combined with good retention bode well for future revenue growth consistency. As such, both of these niche leaders could be attractive purchases after the recent routs.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Time To Buy These 2 Top Niche E-Commerce Stocks</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nTime To Buy These 2 Top Niche E-Commerce Stocks\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-03-15 17:24 GMT+8 <a href=https://seekingalpha.com/article/4413752-time-to-buy-2-top-niche-e-commerce-stocks-pdd-chwy><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryE-commerce sales are expected to grow to ~$6.5 trillion by 2024, or about an 11% CAGR from 2020's $4.3 trillion.Many e-commerce stocks surged during 2020 as pandemic tailwinds grew, and ...</p>\n\n<a href=\"https://seekingalpha.com/article/4413752-time-to-buy-2-top-niche-e-commerce-stocks-pdd-chwy\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"CHWY":"Chewy, Inc.","PDD":"拼多多"},"source_url":"https://seekingalpha.com/article/4413752-time-to-buy-2-top-niche-e-commerce-stocks-pdd-chwy","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1199587015","content_text":"SummaryE-commerce sales are expected to grow to ~$6.5 trillion by 2024, or about an 11% CAGR from 2020's $4.3 trillion.Many e-commerce stocks surged during 2020 as pandemic tailwinds grew, and valuation resets in tech amid surging rates could provide some attractive entries.Aside from global and regional e-commerce leaders, two niche e-commerce leaders provide strong forward growth outlooks: PDD and CHWY.As a result of the pandemic, e-commerce essentially shifted to a 'go-to' shopping method, witnessing a huge acceleration of growth across the globe. However, the industry remains highly fragmented, with global and regional leaders in the e-commerce focused space facing increased presence from brick-and-mortar establishments building out omni-channel capabilities to capture a piece of the growth from this shift in consumer spending. While there's no denying that Amazon (AMZN) arguably holds the reigns on the industry, other leaders have already cemented that status in their respective regions, like Alibaba (BABA) and JD.com (JD) in China, Coupang (CPNG) in Korea, MercadoLibre (MELI) in Latin America, and Shopee (SE) in Southeast Asia. While some of these names still provide solid potential, filling a niche in e-commerce and growing into a leader in that particular niche could provide a longer-term runway for growth: here, the two names that stand out are Pinduoduo (PDD) and Chewy (CHWY).Broader E-commerce TrendsThere's no doubt that the pandemic has provided a significant tailwind to e-commerce operations, but the segment still has some high expected growth over the next few years.Global e-commerce sales were estimated at ~$4.28 trillion for2020, +27.6% on the year, with regions like Latin America seeing some outstanding growth. For 2021, e-commerce sales growth rate is expected to decline sequentially due to brick-and-mortar reopening and the pandemic pull-forward, to about 15% growth to $4.9 trillion for 2021.Graphic fromActivateOn a longer-term trend, e-commerce sales are expected to grow to ~$6.5 trillion by2024, or about an 11% CAGR from 2020's $4.3 trillion. At that projection, e-commerce would hold about 23% of total retail sales, up from ~18%. Categories with the highest (>50%) penetration - clothing/accessories, grocery, household products and beauty/personal care - are categories that have sustainable online growth and repetitive purchase rates, aided with higher adoption of new methods like buy-online, pick-up in store.E-commerce growth looks set to continue at a quick pace even after a massive surge during 2020, leaving a lot of room for leaders and niche players alike to grow into; Pinduoduo and Chewy both sold off heavily over the past month and a half, and provide more attractive valuations to capture strong forward growth.Pinduoduo and an Agricultural NicheAlthough it remains focused on its agricultural niche, Pinduoduo is very much a leading e-commerce platform. The company generates about4% of global GMVacross all categories, making it the fifth largest marketplace per GMV, behind Alibaba's Taobao and Tmall.com, Amazon, and JD.com.So how has Pinduoduo already established itself as a leading global player in just 5 years? The company took a traditional marketplace with offerings across nearly all categories, and revamped it through a social,team-buying model, originally targeting lower tier cities to attract price conscientious consumers. Instead of a search-based experience, it provides a catered, 'virtual bazaar' feed personalized to each user (a \"'you don’t know what you want but happy to discover'\" style).Because of this unique model, Pinduoduo has an immense user base, with nearly 650 million MAU and over 730 million AAU, just shy of Alibaba but far ahead of JD.com on anAAU basis.What makes Pinduoduo an interesting purchase, with shares down ~20%?Aside from sharing a traditional marketplace with the unique team-buying model, Pinduoduo's leverage of its huge user base and connection with local farmers and grocers could be difficult to replicate at scale and at cost by JD.com, Alibaba, and Meituan, leaving the agri-commerce and produce niche mainly to Pinduoduo. China accounts for about one-third of theworld's e-commerce buyers, and over half of total e-commerce sales, leaving a huge market to capture.Pinduoduo continues to find high engagement within its large community, with average annual spend per active buyer (on a TTM basis) up 27% to nearly RMB2,000 (US$294).Agricultural GMVdoubled for 2020, hitting over RMB270 billion (US$42 billion), ahead of an original RMB250 billion forecast from management. Translating growth in GMV to revenues and earnings shows bright potential for Pinduoduo, as it sees that \"digitalagricultureincreases the efficiency of the food supply chain and safeguards food security at the same time,\" solidifying its belief in the potential in the revolution of agriculture.To expand its presence in connecting farmers to consumers, Pinduoduo launchedDuo Duo Maicaito provide next-day grocery delivery and fresh produce, competing with Meituan (HK:3690) in the space. The shift away from traditional wet markets has allowed grocery services like Maicai to fill this space, since customers can purchase as late as 11 PM and receive orders by 4 PM the next day. Through the app, customers have a large selection of fresh and local produce, and also can take advantage of the low-cost buying model.Pinduoduo is on track to quadruple revenues to US$8 billion in just two years, from FY18 to FY20, and securing this niche while still offering the traditional marketplace should see revenues grow at a 40% CAGR through FY23 to US$22 billion, quite an impressive runway. By then, Pinduoduo could generate EPS of $2.50, giving it a forward PE of ~64x - while this does look quite high, it's worth noting that Pinduoduo still hasn't even reach out-and-out profitability, and should see a shift to ~$0.30 in EPS for FY21, thus giving EPS triple digit growth each year through FY23.What further separates Pinduoduo from Alibaba and JD.com is its margin profile, albeit one that could face some impacts moving forward. Pinduoduo has tremendously strong gross margins, fluctuating between 72% (Q1 '20, where the pandemic heavily impacted operations) and 85.7% (Q2 '18). For comparison, Alibaba's gross margin is ~44%, while JD's is ~8.7%. With margins above 70%, Pinduoduo could see Q2 '21 (or possibly Q1) show gross profit exceed operating expenses, leading to the inflection to out-and-out profitability.However, earnings could come under pressure from a recent initiative to further develop logistics infrastructure to be more suitable for perishable handling (increased costs to develop compared to leveraging third-parties), as well as continual increased expenditures in marketing/advertising and headcount/R&D in regards to AI research focused onimproving crop productivity.Some risks do exist even amid the selloff, as Pinduoduo still trades at a premium to Alibaba and JD.com: ~8.7x FY23 sales, compared to 3.6x and 0.7x respectively, and currently still unprofitable. However, rapid revenue growth and strong earnings leverage combined with the agri-commerce moat serve as a safety net to this valuation to a degree. Pinduoduo is on a strong upward trajectory aided by the pandemic, and could have a lot ahead in AI agricultural innovation.Unlike JD.com and Alibaba, and other larger e-commerce platforms, Pinduoduo's niche does not offer seamless transitions to cross-border transactions, and could serve as a barrier to that, keeping Pinduoduo confined to China. This could ultimately cap outright user growth, leaving Pinduoduo reliant on more transactions or more spend per buyer in a long-term forecast (>5 years). However, Pinduoduo is likely safe from potential antitrust proceedings that are hitting Tencent (OTCPK:TCEHY), Baidu (BIDU), and 10 others - it doesn't have a fintech arm and doesn't have the same amount of presence/sway as those involved.Margins also provide a risk to Pinduoduo's profitable inflection likely ahead this fiscal year. Although it does have a superior margin profile, dedication to constantly spend more on marketing/advertising and offering more promotions/discounts all can cut into earnings, and if expenses grow more than 18-20% each quarter, the profitability picture could be cut nearly 30% lower to $1.80 by FY23.Chewy and a Pet NicheSimilar to Pinduoduo, Chewy is currently geographically limited to the US, and while it does seem to be an unconventional, heavily-pandemic aided e-commerce name, it has established itself as a leading player in pet-related products and is expanding product offerings into telehealth and eventually D2V (direct-to-vet) pharma.The pet-care and pet-related product industry has not traditionally utilized e-commerce as a sales channel, instead of relying on brick-and-mortar stores to drive sales.E-commerce penetrationof pet food/treats/related products likely hovers at around one-quarter of the market, putting it at about $14 billion in sales through the channel. As such, Chewy could still command about half of the market, with Amazon close behind at nearly 40% share. However, this is still a more speculative (riskier) play.So what makes Chewy an interesting buy as shares are down ~26%?Pole position atop its segment is a large positive, as other pet product related brick-and-mortar stores don't have the same depth of online presence or leverage of such a strong customer base - while Amazon does present a growing threat, Chewy still has the giant beat, with strong growth in customers and retention through Autoship, as well as a brand moat with over 2,000 brands offering 60,000 products.Chewy saw some impressive growth rates in revenues as \"traffic, conversion, orders, and customer retention all strengthened from September into October as customers shifted their shopping behavior this year.\" Revenues rose 45% for Q3 to $1.78 billion and 46% for the 9M period to $5.1 billion, with the company on track for $7 billion this fiscal year.Customer growth remains strong, with Chewy seeing active customers grow 40% to 17.8 million from 12.7 million last year. Customer retention, assessed through Autoship sales, still hovers at about 69%, dipping slightly lower during Q3 (although that is likely due to the large influx of customers, as $ of Autoship sales per active customer rose slightly). Dollar spend per active customer rose just over 4% to ~$100 per active customer, up from $96.From a long-term perspective, Chewy should be able to grow revenues by ~$2 billion annually through FY23, reaching approximately $11 billion in sales, putting it at ~3x revenues at the current valuation. Consistent growth in revenues at this rate (~20% YoY per quarter on average) will be derived from customer retention remaining at around 67-70%, or through >20% YoY growth in new customers each quarter through FQ4 '23.One sign for maintenance of that retention rate is percentage ofconsumablesper total sales, which sits at just about 70%. Consumables are likely the key driver for Autoship and continual purchases, as these items (foods/treats/etc.) are much more constant needs than toys/beds/etc.Chewy is also seeing net losses shrink, with a net loss of just $7.7 million, adjusted for share-based compensation. EBITDA has grown to $33 million, very small, but pointing to signs of profitability by late FY22. Because gross margin is small, just 25.5%, Chewy is unlikely to see rapid EPS leverage, with just $0.35 in EPS possible by FY23. Thus, Chewy trades at quite a high forward PE, but given its position atop the pet-care e-channel, could sustain this premium with relatively little competition.The pet food/treat/care products market doesn't exhibit a rapid forward growth runway, placed in the high-single digits; working with the prior $14 billion figure, 2023 sales through e-commerce could reach just under $18 billion in a rudimentary estimate. Therefore, leveraging other channels, like D2V pharma, and free telehealth visits for Autoship customers, could be vital in driving engagement and spend per customer higher, which are necessary for revenue growth projections.Although Chewy does have good potential as the leader in pet-focused e-commerce, it hassome major risks.Chewy'sbalance sheetis underwhelmingly weak, as the company had been technically insolvent through Q3, with $56 million less in assets than liabilities (this could be subject to change during Q4, with revenues near $2 billion likely allowing some more cash to be added which would resolve this issue). But with just over $500 million in cash, raising capital is most likely already booked in the future, either through debt or dilution.Margins also present a risk, as revenue growth isn't extremely rapid, and inflection to profitability with high EPS leverage also isn't likely. As such, margins will need to be maintained above in the mid-20% range to ensure consistent profitability in the long-run, as utilization of free telehealth visits could crimp margins with some excess incurred costs relative to increased revenue generation.Even though Chewy is a segment leader, the pet-care industry hasn't been a wide adopter of e-commerce, and such a pull-forward from the pandemic could fizzle out, and disappointing growth in customers moving forward would shift revenue projections down by ~10% to around $10 billion, as that would likely be met with lower-than-expected Autoship sales.OverallE-commerce growth is undeniable, and global, regional, and niche leaders alike have positive runways ahead with increased e-commerce penetration relative to total retail and large dollar gains in sales. While it's hard to argue against outright leaders, niche players Pinduoduo and Chewy offer good potential for forward growth due to occupancy of the pole position within their respective niches of agri-commerce and pet products. Both are still quite pricey, but have sold off pretty heavily with the tech-selloff, thus providing more attractive entry points after valuation resets. Pinduoduo has some rapid room for revenue growth amid surging GMV and could see strong EPS leverage amid a shift to out-and-out profitability in the near future. Chewy's segment doesn't boast the highest growth rates, but large market share combined with good retention bode well for future revenue growth consistency. As such, both of these niche leaders could be attractive purchases after the recent routs.","news_type":1},"isVote":1,"tweetType":1,"viewCount":178,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":7,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/322695519"}
精彩评论