How Did Jingdong Lose Its 580 Million Huge Deficit?

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Xiaobian net to introduce to you is Jingdong's 580 million huge loss is how to make it?

After the Jingdong's first earnings report, the media got a lot of money: whether it was a year-on-year growth of 64% to 28 billion 600 million yuan net revenue, or doubled to 63 billion of the total merchandise trade (GMV).

However, the most notable concern is that the Jingdong expanded 1957% over the previous quarter, a huge loss of up to 582 million 500 thousand yuan.

According to the explanation given by Jingdong, "the year-on-year increase in net losses is mainly due to assets involved in the strategic agreement with Tencent.

Amortization expenses of intangible assets arising from business acquisitions. "

Is this really the case?

How did the loss come?

According to the earnings report, Jingdong's net revenue grew by 64% over the same period last year. From a certain perspective, the growth rate of over 64% of all expenses in Jingdong can be regarded as the cause of huge losses.

The total revenue cost of Jingdong is 25 billion 500 million yuan, up 60% compared to the same period last year. It is not the chief culprit of the loss expansion.

Executive expenditure (procurement, warehousing, express delivery and customer service expenditure) was 2 billion yuan, an increase of 105% over the same period last year, which is part of the expansion of the deficit.

Marketing expenditure was 1 billion 66 million yuan, up 149% from last year's 428 million yuan; according to Jingdong, this growth was mainly due to the amortization expense of intangible assets arising from strategic cooperation with Tencent.

Technology and content expenditures were 420 million yuan, up 92% from last year's 218 million 200 thousand yuan, and the reason for the increase was the increase in technical personnel after the cooperation with Tencent.

The general administrative expenditure was 455 million yuan, an increase of 184% over the same period last year of 160 million yuan. The increase was due to the amortization of intangible assets and equity incentives caused by cooperation with Tencent.

Compared with the cost of amortization of intangible assets caused by cooperation with Tencent, how much equity incentive has Jingdong issued this quarter?

209 million: a neglected number.

According to Jingdong's earnings report, a huge loss of 582 million 500 thousand yuan is a product of the US general accounting standards. The net loss in the same period last year was 28 million 320 thousand yuan. Instead of the US general accounting standards, Jingdong's net loss in the two quarter was 11 million 840 thousand yuan, and the net profit in the same period last year was RMB 37 million 500 thousand yuan.

What is the relationship between 582 million 530 thousand and 11 million 840 thousand yuan?

Jingdong's financial report shows that when calculating the net profit of non accounting general guidelines, it removed 361 million 760 thousand yuan based on equity incentive and the amortization expense of intangible assets caused by assets and business acquisitions.

Compared with the 62 million 620 thousand yuan equity incentive in the same period last year, the 208 million 930 thousand yuan equity incentive has increased by 234%, and the absolute value has increased by 146 million 310 thousand yuan.

This is not a negligible figure.

Appendix: Jingdong's two quarter earnings report

Jingdong reported a net profit of 28 billion 600 million yuan (US $4 billion 600 million) in the second quarter of 2014, an increase of 64% over the same period last year, and a net loss of 582 million 500 thousand yuan (US $93 million 900 thousand).

Jingdong's total merchandise trade (GMV) in the second quarter was 63 billion yuan (US $10 billion 200 million), an increase of 107% over the same period last year.

The number of active users of Jingdong in the second quarter was 38 million 100 thousand, up 94% from 19 million 600 thousand in the same period last year.

Jingdong's orders in the second quarter were 163 million 700 thousand, up 126% from 72 million 600 thousand in the same period last year.

Among them, the proportion of mobile terminal orders in total orders is about 24%.

Jingdong CEO Liu Qiangdong said, "Jingdong has achieved strong quarterly growth, exceeding our target and gaining market share growth.

As the leader of China's online direct selling market, we are pleased to see that Jingdong is becoming China's most popular and trusted purchase website. We also have first-class customer service, based on the convenient and fast distribution service with its last mile distribution network.

He added, "in the future, we will focus on strengthening Jingdong's market leadership by expanding the product and service category of our platform, and optimizing our mobile products and infiltrating into the rapidly growing underdeveloped cities.

We believe that these strategic actions, coupled with the trend of the B2C electricity market as a whole, will lay a solid foundation for our long-term growth. "

"Our robust performance in the second quarter reflects our current efforts to provide the best customer service and enhance operational efficiency."

Huang Xuande, chief financial officer of Jingdong, said: "with the support of strong balance sheet and free cash flow, we will continue to invest in strategic logistics infrastructure, technology and new business projects to further strengthen our leading position in China's direct B2C e-commerce market."

Summary of second quarter results

Jingdong's total merchandise trade (GMV) in the second quarter was 63 billion yuan (US $10 billion 200 million), an increase of 107% over the same period last year.

GMV from online direct sales and market businesses were 39 billion 200 million yuan and 23 billion 800 million yuan respectively, up from 23 billion 600 million yuan and 6 billion 900 million yuan in the same period last year.

GMV from electronic home appliances is 34 billion 800 million yuan, up from 20 billion yuan in the same period last year, and GMV from daily goods and other commodities is 28 billion 200 million yuan, up from 10 billion 500 million yuan in the same period last year.

The GMV ratio of general merchandise and other commodities was 44.8%, up from 34.6% in the same period last year.

The Jingdong achieved a net revenue of 28 billion 600 million yuan (US $4 billion 600 million) in the second quarter, an increase of 64% over the same period last year.

The growth of GMV and net revenue is mainly due to the growth of active users and the growth of orders.

Net revenue from online direct sales increased by 60% over the same period, and net revenue from services and other businesses grew by 186% year-on-year, mainly due to increased revenue from the company's rapidly expanding online platforms and advertising services.

The operating cost is 25 billion 500 million yuan, which is 60% higher than that of 15 billion 900 million yuan in the same period last year.

This is mainly due to the growth of the company's direct selling business.

The cost of logistics is 2 billion yuan, which is 105% higher than that of 1 billion yuan in the same period last year.

The cost of marketing is 1 billion 100 million yuan, which is 149% higher than that of 400 million yuan in the same period last year.

The cost of technology and content is 420 million yuan, which is 92% higher than that of 218 million 200 thousand yuan in the same period last year.

The general management fee is 455 million 400 thousand yuan, which is 184% higher than that of 160 million 600 thousand yuan in the same period last year.

Jingdong second quarter net

582 million 500 thousand yuan (US $93 million 900 thousand), up from 28 million 300 thousand yuan in the same period last year.

The expansion of losses is mainly due to the amortization of intangible assets caused by the acquisition of assets and business related to strategic cooperation with Tencent.

Without the US GAAP, the net loss of Jingdong in the second quarter was 11 million 800 thousand yuan (US $1 million 900 thousand), compared with 37 million 500 thousand yuan in the same period last year.

The net loss per share of ADS in the second quarter of the Jingdong was 5.86 yuan (US $0.94), up from 0.57 yuan in the same period last year.

Excluding the US GAAP, the net loss per share of ADS was 0.01 yuan, compared with 0.04 yuan per share ADS in the same period last year.

Cash flow and working capital

As of June 30, 2014, Jingdong held cash and cash equivalents, limited cash and short-term investments totaling 35 billion 200 million yuan, up from 14 billion 600 million yuan as of December 31, 2013.

2014 third quarter performance outlook

Net revenue in the third quarter is expected to be between 28 billion yuan and 29 billion yuan, up 55% to 61% over the same period last year.