Investment income lights up the financial report of Yum and meituan
According to the logic of the blog, as Yum China, meituan and ideal automobile hold shares at different levels, the great increase in sales of ideal cars will indirectly transmit, which will push up the stock prices of meituan and Yum China. However, yum China and meituan can perfectly realize the perpetual motion machine closed loop only by purchasing the ideal cars.
On October 29, yum! China (9987. HK), which operates catering brands such as KFC and pizza hut, released its third quarterly report. The financial report showed that the companys net profit increased by 96% year-on-year to USD 439 million, mainly due to the growth of operating profit and the equity investment income of meituan.
Interestingly, on November 30, the third quarter report of meituan (3690. HK) showed that meituan also made a large investment income in the third quarter. According to the financial report, meituan achieved a net profit of 6.7 billion yuan in the third quarter, a year-on-year increase of 374%, including 5.8 billion yuan of income from changes in fair value invested in listed entities. The return on the investment is related to ideal car, which owns 14.5% of the shares and 5.8% of the voting rights, according to Li. Os prospectus.
In recent months, new energy vehicles have begun to rise. The stock price of ideal automobile has risen by more than 142% since the beginning of September, which has brought huge investment income to meituan.
However, meituans share price broke through HK $338 in early November, and temporarily surpassed ICBC to become the third listed company in Hong Kong stock market value, with an increase of more than 30% from the beginning of September to the peak.
So, what about sales of ideal cars? The companys third quarter financial report showed that 8660 vehicles were delivered in the third quarter, with revenue of 2.511 billion yuan higher than expected.
So a sure win strategy came out. Some netizens jokingly said that Yum and meituan can each spend 1 billion yuan to buy 3000 ideal cars, which can be used for delivery. On the other hand, the ideal car sales doubled to attract U.S. investors, and the stock price doubled again, driving the net profit and market value of Yum and meituan to increase.
Is perpetual motion machine so simple? Of course not!
According to the prospectus of Yum China, the company subscribed for 8.4 million shares of meituan common stock with a price of $74 million in September 2018, and sold 4.2 million shares in the second quarter of 2020 to obtain $54 million in cash.
The reporter carefully read the three quarterly reports of Yum! China and found that among the net profits of Yum! Chinas three quarterly reports, the income from investment in meituan was not the largest. Although the groups net income of $12.06 billion in the same period last year was only $12.06 billion, according to the same period of last year, the groups net income was only $12.04 billion. The main income came from the acquisition of 25% equity of KFC Suzhou during the period. After re measurement of fair value, non cash income of USD 239 million was recorded, accounting for 54.4% of the current net profit.
After adjustment, the net profit of Yum China in the third quarter was 263 million US dollars, an increase of 17% over the same period of last year. If the investment income of meituan is removed, it will increase by 10% on a year-on-year basis.
In fact, while investing in meituan, yum is also using takeaway and digital methods to earn more revenue. According to the financial report, takeaway revenue accounted for about 28% of KFC and Pizza Huts revenue in the third quarter, and digital orders (including takeaway orders, mobile phone orders and self-service ordering machine orders) accounted for about 78% of the revenue of the two restaurants.
In the financial report, yum also raised its performance target for fiscal year 2020. It is expected to open more than 900 new stores in the year. By the end of the third quarter, it had 10150 restaurants in China.
For meituan, expanding new business to increase revenue is also imminent. According to the financial report, meituans growth on both sides of supply and demand has approached the ceiling. The number of trading users and active businesses has increased by less than 10% for three consecutive quarters. The average annual number of transactions of users in the third quarter of this year only increased by 0.9% to 26.8.
Wang Xing, CEO of meituan, said at the financial report meeting that meituan focuses on expanding new business, increasing users and using stickiness, and that new business will expand more markets in low-level cities, among which meituans preferred choice of community group buying mode is the key.
Meituans new business sector grew the fastest among the three businesses, with revenue increasing by 43.5% in the same ring in the third quarter. However, this part of the business is still in the loss stage, with a loss of 2 billion yuan in the third quarter, a year-on-year increase of 39%. Meituan will continue to invest in improving the supply chain in the next few quarters, which will also lead to losses in the new business sector in the next few quarters. Wang said.
In fact, the market also knows that investment income is not a stable source of profit. Recently, the rapid rise of new energy plate into the adjustment period. Ideal auto has fallen from a high of $47.7 a share on November 24 and has fallen more than 20% in six trading days. As of the latest closing, ideal car had a market value of $29.1 billion at $34.75 per share.
In a shares, there is also a bet on the ideal car venture capital God - Leo shares.
The third quarter of the companys earnings statement light up. According to the financial report, Leos net profit in the third quarter reached 3.08 billion yuan, up 865% year-on-year. However, the companys full year net profit in 2019 is only 300 million yuan.
Leo invested in the ideal car relatively early and was the leader of round A. at present, it has achieved good investment income. When the stock price of ideal automobile was at a high point in the early stage, Leos book floating profit was close to 10 billion yuan, which was amazing in terms of single project investment income, Zhang Xubo, vice president of Leo, told the securities times that the early investment in ideal cars was mainly optimistic about smart power Whats more important is that the team that is optimistic about the ideal car can make it. Now, they are still optimistic about this company for a long time.
Although Leo shares have obtained huge book income on ideal automobile, from the perspective of its stock price performance, in October and November, when the stock price of ideal automobile soared (the cumulative increase reached 170%), the stock price of Leo stock increased by 30%. Basically, the profit of Leo shares on the ideal car, the price given by the market, is only twice the price to book ratio.
PS: in the history of global stock market, the case of perpetual motion machine appeared in Japan in the 1980s. At that time, the phenomenon of cross shareholding among Listed Companies in Japan was very common. With the rising of the Nikkei index, the profits and share prices of listed companies also rose. But there is no real perpetual motion machine in the world. When the tide recedes, the Japanese stock market also ushered in a painful lost 30 years.