China Youzan (8083 HK) 21Q1 result missed expectation, while the structure mix of new paying merchants optimized June 3, 2021 68

PSR Recommendation: BUY Status: Maintained
Target Price: HKDHKD3.04

Investment Summary
The company’s 1Q21 result missed market expectation
The company announced its 1Q21 result on May 10, and the result missed market
expectations. The 21Q1 GMV was RMB 23.6 billion (+13.5% YoY), which was lower than
market expectations. The GMV growth in the past few quarters have maintained at a high
level (the average YoY growth rate of GMV in the past four quarters is roughly 75.9% YoY).
Therefore, compared with the past data, the deceleration of the 21Q1 GMV growth was
relatively obvious. The slowdown in GMV growth was mainly due to the drop in GMV from
Kuaishou. The GMV from Kuaishou fell by 43.4% YoY to RMB 4.7 billion. We expect the GMV
growth will resume rapid growth in 21H2. The company’s management maintains their
previous target YoY GMV growth rate of 50% in 2021 and expects that the GMV contribution
from Kuaishou will drop to 10% by the end of 2021 (Kuaishou GMV accounted for 40% of total
GMV in 2020)

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