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Vipshop Holdings Limited (VIPS)
NYSE:VIPS
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Vipshop
(NYSE:VIPS)
78Outperform
Positive Factors
Financial Strategy
Management has communicated that they will return no less than 75% of FY2024 non-GAAP net income to shareholders in FY2025, translating to ~12% of its current market cap.
Membership Growth
SVIP members reached 7.5 million in 3Q24, up from 7.4 million in 2Q24, contributing positively.
Sales Performance
Singles Day promotion was longer with 28 days vs 20 days last year, and GMV growth was solid at 20% yoy.
Negative Factors
Consumer Demand
VIPS noted despite decent Singles Day performance, it remains cautious as consumer demand remains challenging and winter is likely to be warmer than last year.
Market Competition
Soft apparel demand and competition continue in the second half, impacting topline and margins.
Revenue Decline
Revenue is expected to decline 10% year-over-year, dragged down by a double-digit decline in standardized products and lackluster apparel demand.
Vipshop (VIPS) vs. S&P 500 (SPY)
Market Cap
$8.35B
Dividend Yield2.52%
Average Volume (3M)4.48M
Price to Earnings (P/E)8.2
Beta (1Y)0.83
Revenue Growth-5.47%
EPS Growth-2.19%
CountryUS
Employees14,638
SectorConsumer Cyclical
Sector Strength48
IndustrySpecialty Retail
Share Statistics
EPS (TTM)1.99
Shares Outstanding435,525,900
10 Day Avg. Volume3,483,217
30 Day Avg. Volume4,479,349
Financial Highlights & Ratios
PEG Ratio0.46
Price to Book (P/B)N/A
Price to Sales (P/S)0.57
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$17.28Price Target Upside5.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Vipshop Business Overview & Revenue Model
Company DescriptionVipshop Holdings Limited operates online platforms for various brands in the People's Republic of China. It operates in Vip.com, Shan Shan Outlets, and Others segments. The company offers women's apparel, such as casual wear, jeans, dresses, outerwear, lingerie, pajamas, and maternity clothes; men's apparel comprising casual and smart-casual T-shirts, polo shirts, jackets, pants, and underwear; and skin care and cosmetic products, including cleansers, lotions, face and body creams, face masks, sunscreen, foundations, lipsticks, eye shadows, and other cosmetics-related items. It also provides shoes and bags, which comprises casual and formal shoes, purses, satchels, luggage, duffel bags, and wallets; handbags; apparel, gears and accessories, furnishings and decor, toys, and games for boys, girls, infants, and toddlers; sportswear, sports gear, and footwear for various sporting activities; home furnishings, such as bed and bath products, home decor, kitchen and tabletop items, and home appliances; and consumer electronic products. In addition, the company offers food and snacks, beverages, fresh produce, and pet goods; beauty products; and internet finance services, including consumer and supplier financing, and microcredit. Vipshop Holdings Limited provides its branded products through its vip.com and vipshop.com online platforms, as well as through its internet website and cellular phone application. Further, it offers warehousing, logistics, product procurement, research and development, technology development, and consulting services; software development and information technology support solutions; and supply chain services. Vipshop Holdings Limited was founded in 2008 and is headquartered in Guangzhou, the People's Republic of China.
How the Company Makes MoneyVipshop makes money primarily through the sale of discounted branded products on its e-commerce platform. The company operates a flash sales model, where it purchases excess inventory from brands at a discount and resells these products at competitive prices to its customers. This model allows Vipshop to offer significant discounts, attracting a large customer base. Revenue is generated from the markup on these discounted products. Additionally, Vipshop benefits from strategic partnerships with various international and domestic brands, enhancing its product offerings and expanding its customer reach. The company's logistics and supply chain efficiency also contribute to its profitability by minimizing overhead costs and ensuring timely delivery of products.
Vipshop Financial Statement Overview
Summary
Vipshop demonstrates strong financial performance with significant revenue growth, improved margins, and robust cash flow. However, fluctuations in revenue growth and asset and liability levels pose potential risks.Income Statement
Vipshop has demonstrated a strong financial performance in the income statement. The company showed a significant increase in revenue from 103.15 billion CNY in 2022 to 112.86 billion CNY in 2023, indicating robust growth. The gross profit margin is healthy at approximately 22.8%, and the net profit margin improved to around 7.2%. Both EBIT and EBITDA margins have shown improvements, reflecting enhanced operational efficiency. However, the revenue growth has been somewhat volatile over the years, which could pose a risk if it continues.85
Very Positive
Balance Sheet
The balance sheet of Vipshop reveals a solid financial position with a strong equity base. The debt-to-equity ratio is very low at approximately 0.06, indicating minimal leverage risk. The return on equity has improved to about 21.9%, showcasing effective use of equity capital. The equity ratio stands at around 51.1%, suggesting a stable balance sheet. A potential area of concern is the fluctuating levels of total assets and liabilities, which may indicate varying degrees of risk exposure over time.78
Positive
Cash Flow
Vipshop's cash flow statements depict a healthy cash-generating capability. The free cash flow has grown from 7.42 billion CNY in 2022 to 9.18 billion CNY in 2023, indicating strong cash flow growth. The operating cash flow to net income ratio is favorable, showing that the company is efficiently converting its earnings into cash. The free cash flow to net income ratio further supports this view. Nevertheless, the investing and financing cash flows suggest variability that could affect liquidity management.80
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 111.96B | 112.86B | 103.15B | 117.06B | 101.86B | 92.99B | Gross Profit |
| 26.50B | 25.72B | 21.62B | 23.11B | 21.29B | 20.68B | EBIT |
| 10.19B | 9.10B | 6.20B | 5.58B | 5.86B | 4.77B | EBITDA |
| 11.12B | 11.53B | 6.96B | 6.25B | 6.31B | 5.98B | Net Income Common Stockholders |
| 8.41B | 8.12B | 6.30B | 4.68B | 5.91B | 4.02B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 23.53B | 27.90B | 23.53B | 21.68B | 19.32B | 9.63B | Total Assets |
| 65.48B | 72.32B | 65.48B | 62.29B | 58.94B | 48.58B | Total Debt |
| 3.66B | 2.34B | 3.66B | 3.21B | 2.70B | 2.89B | Net Debt |
| -18.28B | -23.07B | -18.28B | -13.08B | -9.29B | -3.69B | Total Liabilities |
| 31.40B | 33.76B | 31.40B | 28.46B | 29.56B | 26.33B | Stockholders Equity |
| 32.75B | 36.96B | 32.75B | 32.63B | 28.50B | 21.83B |
| Cash Flow | Free Cash Flow | ||||
| 0.00 | 9.18B | 7.42B | 3.17B | 9.55B | 8.01B | Operating Cash Flow |
| 0.00 | 14.41B | 10.52B | 6.74B | 11.82B | 12.29B | Investing Cash Flow |
| 0.00 | -5.16B | 1.05B | -2.33B | -6.70B | -8.24B | Financing Cash Flow |
| 0.00 | -6.15B | -5.57B | -58.79M | -20.84M | -6.26B |
Vipshop Technical Analysis
Positive
16.41
Price Trends
15.20
Positive
14.47
Positive
14.28
Positive
Market Momentum
0.45
Positive
53.06
Neutral
15.32
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VIPS, the sentiment is Positive. The current price of 16.41 is below the 20-day moving average (MA) of 16.46, above the 50-day MA of 15.20, and above the 200-day MA of 14.28, indicating a neutral trend. The MACD of 0.45 indicates Positive momentum. The RSI at 53.06 is Neutral, neither overbought nor oversold. The STOCH value of 15.32 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VIPS.
Vipshop Risk Analysis
Vipshop disclosed 81 risk factors in its most recent earnings report. Vipshop reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Vipshop Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $319.45B | 19.00 | 11.97% | 0.72% | 4.28% | 28.42% | |
81 Outperform | $177.93B | 12.14 | 45.06% | ― | 84.13% | 122.96% | |
78 Outperform | $66.63B | 11.30 | 17.55% | 1.75% | 5.20% | 77.60% | |
78 Outperform | $8.35B | 8.17 | 20.12% | 2.52% | -5.47% | -2.19% | |
76 Outperform | $106.22B | 56.62 | 51.50% | ― | 43.56% | 91.72% | |
73 Outperform | $2.15T | 36.81 | 24.29% | ― | 10.99% | 91.61% | |
59 Neutral | $12.50B | 11.24 | 1.20% | 3.72% | 1.27% | -20.93% |
* Consumer Cyclical Sector Average
Performance Comparison
VIPS
Vipshop
16.41
-0.19
-1.14%
AMZN
Amazon
203.26
23.55
13.10%
MELI
Mercadolibre
2,134.31
584.24
37.69%
JD
JD
42.57
16.50
63.29%
BABA
Alibaba
134.48
64.52
92.22%
PDD
PDD Holdings
128.12
8.25
6.88%
Vipshop Earnings Call Summary
Earnings Call Date: Feb 21, 2025 | % Change Since: 12.94% | Next Earnings Date: May 15, 2025
Earnings Call Sentiment Neutral
While Vipshop showed strong growth in its apparel category and Super VIP membership, it faced challenges with a decrease in total net revenues, increased operating expenses, and declining margins. The financial outlook for Q1 2025 suggests continued challenges with expected revenue declines.Highlights
Apparel Category Growth
Apparel categories were up 2% from the year ago, accounting for 75% of total GMV. This helped Vipshop achieve RMB200 billion in total annual sales.
Super VIP Membership Growth
Active Super VIP members increased by 50% in Q4 year over year, contributing to 51% of online spending.
Gross Margin Achievement
Gross margin for the full year reached an eight-year high of 23.5%, benefiting from a strong apparel business contribution.
Non-GAAP Net Profit
Vipshop recorded over RMB9 billion in full-year non-GAAP net profit, with a solid margin of 8.3%.
Capital Return to Shareholders
In 2024, approximately $770 million was returned to shareholders through annual dividends and buybacks.
Lowlights
Decrease in Total Net Revenues
Total net revenues for Q4 2024 were RMB33.2 billion, compared to RMB34.7 billion in the prior year, a decrease of about 4.3%.
Operating Margin Decline
Operating margin for Q4 decreased to 8.6% from 10.6% in the prior year period.
Increase in Operating Expenses
Total operating expenses increased to 15.2% of total net revenues in Q4 2024, up from 14.0% in the prior year period.
Net Income Decline
Q4 net income attributable to Vipshop's shareholders was RMB2.4 billion, compared to RMB3.0 billion in the prior year period.
Revenue Guidance for Q1 2025
Vipshop expects total net revenues for Q1 2025 to decrease by approximately 0% to 5% year-over-year.
Company Guidance
During the Vipshop Holdings Limited Fourth Quarter and Full Year 2024 Earnings Conference Call, the company provided guidance and insights into their performance and strategy. Vipshop reported total net revenues of RMB33.2 billion for Q4 2024, with a gross margin of 23.0%, slightly down from 23.7% in the prior year period. The apparel category showed a 2% year-over-year growth, accounting for 75% of the total GMV, contributing significantly to the RMB200 billion in total annual sales. The company's Super VIP membership saw a 50% increase in active members in Q4, contributing 51% of online spending. Despite a challenging year, Vipshop achieved a non-GAAP net profit attributable to shareholders of RMB9 billion for 2024, maintaining a solid margin of 8.3%. Looking forward, Vipshop anticipates net revenues for Q1 2025 to range between RMB26.3 billion and RMB27.6 billion, reflecting a potential year-over-year decrease of up to 5%. The company remains focused on expanding its merchandising capabilities and leveraging AI to enhance efficiency and customer experience.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.