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Coca-Cola to invest further in China
Ahmet Bozer, president of Coca-Cola International, poses beside a vending machine in Beijing/XINHUA
BEIJING, May 10 – The Coca-Cola Company announced here on Thursday that it will continue to increase investment levels in China.Ahmet Bozer, president of Coca-Cola International, said during an interview that he expects the business to continue to grow for many years to come.
Bozer said billion of investment will be added by 2014 in China explained that the investment is mixed with marketing assets like plants, transportation and retail outlets.
According to the Coca-Cola chief, the company will open a new plant in Shijiazhuang, capital of north China’s Hebei Province, in October.
It is also working to develop the markets in China’s second- and third- tier cities and its western areas.
Those cities may be at a different economic stage of development, Bozer said, but they are expected to have great potential.
As told by Bozer, Coca-Cola has been developing local partners and distribution systems to make the brand locally relevant.
According to Bai Changbo, vice president of public affairs and communications for Coca-Cola Greater China, Chinese people now drink an average of 39 bottle of Coke per year, which is still much fewer than the 400 bottles consumed in the United States.
“Thus, our products have broad growth space in China,” Bai said.
With that growth, Coca-Cola has to keep investing to satisfy the demand, Bai acknowledged.
“We want to make China our largest beverage market soon,” added Bozer.
The first shipment of Coca-Cola cans was shipped to China in 1978, so this year marks the brand’s 35th year in the country.
“Our business in China is a mirror of the progress of its opening-up policy,” said David Brooks, president of Coca-Cola Greater China and Korea.
Coca-Cola used to make the argument to the Chinese government that foreign tourists had to have Coke if the country wanted them to come in, disclosed Brooks.
The Chinese government approved Coca-Cola’s operation in the country in 1979.
Now, the beverage giant has established 42 plants all over China, with a total investment of billion, and 50,000 Chinese local employees.
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Best Buy hires new CEO for its China business
Best Buy Co. Inc. might not be done with China just yet.
Despite widespread speculation on Wall Street that Best Buy will pull back from international retail, the Richfield-based company Thursday named a veteran retail executive in Asia to run its Five Star business in the world’s most populous country.
In a statement, Best Buy said Meng “Max” Zhou is the new CEO in China, replacing Nicolas Wang, who resigned in March. Zhou, a Cornell University graduate, previously served as CEO for China of Central Retail Group, the largest retailer in Vietnam, and executive vice president and chief operating officer for China Paradise Electrical Limited, the third-largest electronics chain in China.
“Five Star has built a strong presence in the world’s largest and rapidly growing consumer electronics market,” Zhou said in a statement. “Our business has great opportunities, and we are determined to drive our performance by meeting the changing needs of our customers.”
Zhou’s hire comes at a time when analysts expect CEO Hubert Joly to pull back from international markets to focus on Best Buy’s core business in North America. Last month, Best Buy agreed to sell its 50 percent stake in Best Buy Europe to joint venture partner Carphone Warehouse for 5 million in cash and stock.
Analysts had speculated that Joly will soon sell the Five Star business. But the arrival of Zhou suggests that Best Buy may stick around, especially as China’s smartphone market continues to boom.
“Best Buy wants to keep a foothold in China,” said Laura Kennedy, an analyst with Kantar Retail consulting firm in Boston. “It seems that the company wants more time to realize some potential there.”
The country has overtaken the United States as the world’s largest smartphone market. Global shipments of smartphones grew 48 percent in the first quarter to 216.3 million units, much of that going to China, according to a recent report by technology research firm Canalys. Of the top five smartphone vendors in the world, two — Huawei and ZTE — are Chinese firms selling into their home country.
With Five Star, Best Buy seems uniquely positioned to benefit from this growth. Although the company has shut down its big-box stores in China, Best Buy has continued to open Five Star stores and is testing a Best Buy Mobile store-within-a-store concept in some Five Star locations.
Best Buy will develop “our e-commerce capabilities and enhance the shopping experience in physical stores, with a focus on fast-growing categories like mobile phones,” Zhou said in his statement.
However, some observers still believe Best Buy will jettison Five Star, which has been struggling of late. A source close to Best Buy China said Zhou’s hire probably means the company wants more time to boost the value of Five Star before finding a buyer for the right price.
Since Joly joined Best Buy last September, he has launched an extensive campaign to simplify the business, removing layers of management, reducing corporate expenses and ending noncore operations like venture capital, online tech support, and outside partnerships and alliances.
He seemed particularly skeptical about Best Buy International, which never generated the returns on capital Wall Street had expected.
“Retail is not the most global of businesses by any stretch of the imagination,” Joly told investors in New York last November. “China is not a goal unto itself. If we can’t find a way to make the business successful, then we shouldn’t be in China.”
In February, Best Buy closed 15 of its 230 big-box locations in Canada. A few months later, Best Buy ended its joint venture with Carphone Warehouse, including its Global Connect initiative in which the two companies would sell their mobile store expertise to retailers around the world.
With Joly keen to focus on revitalizing Best Buy stores in the United States, pulling out of international made sense, analysts said.
“While management will be rolling out initiatives to help stabilize performance, we believe there is significant opportunity to divest or restructure noncore assets that don’t have strategic value like Europe and/or China,” Peter Keith, an analyst with Piper Jaffray, wrote in a recent research note.
China appeared to be an ideal candidate for divestment. Best Buy big-box stores never caught hold in the country and Five Star results have started to slow in recent months.
Page 2 of 2 Previous
- Article by: THOMAS LEE , Star Tribune
- Last update: May 9, 2013 - 9:39 PM
But judging from the rhetoric from Best Buy officials surrounding Zhou’s hire, China may yet find a place in Best Buy’s future.
“The size and growth of the Chinese market and consumer demand for better technology solutions requires us to have a leader with a strong vision and proven ability to adapt to a rapidly changing marketplace,” Best Buy International chief Shari Ballard said in a statement. “I know how committed [Zhou] is to moving the business forward.”
Thomas Lee • 612-673-4113
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This Five Star store in Huaibei, Jiangsu province, opened in 2008, when Best Buy was aggressively expanding.
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Caterpillar Settles With Principals Of Troubled Chinese Acquisition
Ever since Caterpillar jolted investors in January with a 0 million write down of a troubled Chinese acquisition, questions have lingered over its debt obligations. Caterpillar alleged that Siwei, a mining-equipment firm in Zhengzhou, had falsely inflated its revenues over many years prior to the 2012 acquisition. Now comes news that Caterpillar has settled out of court with the former principals of Siwei. Caterpillar said Thursday that it would pay .5 million to the sellers in order to resolve all outstanding issues. This is considerably less than the 4.5 million that Caterpillar was contracted to pay to Emory Williams and James Thompson Jr., who controlled Siwei via a Hong Kong-listed entity, and two other parties. The agreement forestalls the possibility of litigation. But it doesn’t quite end the confusion over what Caterpillar did and didn’t know about Siwei before it signed on the dotted line.
As I reported in February, Caterpillar agreed last year to pay up to 6 million for Siwei using cash and loan notes. The notes were issued to directors of Siwei’s parent company, Hong Kong-listed ERA Mining. Williams and Thompson, the son-in-law of Williams’ business partner John Lee, accepted 60% of their payout in loan notes that were indexed to Siwei’s profits. The first payment was due in April 2013. That didn’t happen and now we know why: Caterpillar’s lawyers were negotiating a settlement. Thursday’s statement contains the following quote from Williams: ”We wish Caterpillar continued success in the China mining sector. We are pleased to conclude this matter and to continue our track record of building successful businesses in China.”
Caterpillar never accused the principals of involvement in the alleged fraud. Siwei’s CEO was fired in January and a Caterpillar executive was shown the door, but doubts remain over how such a massive fraud could have been perpetrated under the nose of experienced operators like Williams and Lee. Caterpillar said that inventory checks last November revealed a gaping hole in the accounts, spurring a top-to-bottom reevaluation. Sources close to the two men, who sold another mining equipment firm to Joy Global in 2010, claim that overeager Caterpillar overpaid for a loss-making asset and then tried to shift the blame. The truth may lie between the two assertions. But without a public airing in court we may never know.
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Dangdang Announces First Quarter 2013 Results
BEIJING, May 17, 2013 /PRNewswire/ -- E-Commerce China Dangdang Inc. ("Dangdang" or the "Company") (NYSE: DANG), a leading business-to-consumer e-commerce company in China, today announced its unaudited financial results for the first quarter ended March 31, 2013.
First Quarter 2013 Highlights
- Gross Margin in the first quarter of 2013 was 17.2%, the highest level since the second quarter of 2011, compared to 14.2% in the first quarter of 2012 and 13.4% in the fourth quarter of 2012.
- Net Loss for the first quarter of 2013 was RMB72.7 million (.7 million), representing 5.5% of total revenues, as compared with a net loss of RMB99.5 million in the first quarter of 2012 representing 9.2% of total revenues and a net loss of RMB122.1 million representing 7.6% of revenues in the fourth quarter of 2012.
- Gross Merchants Value ("GMV") of the marketplace in the first quarter of 2013 were RMB584.1million (.0 million), a 193% increase from the corresponding period in 2012.
"We are pleased to report another quarter of solid financial and operational results with better than expected sales, highest gross margin since the second quarter of 2011, and better operating efficiency," said Ms. Peggy Yu Yu, Dangdang's Executive Chairwoman. "Books and media sales grew by 24% in this quarter, which allows us to maintain dominant market share in online media sector. Dangdang's marketplace program once again demonstrated outstanding growth momentum, as marketplace GMV grew at 193% year-over-year in the first quarter. Sales from general merchandise, which include both self-procurement and marketplace, exceeded sales from books and media for the second consecutive quarter."
"We are confident that Dangdang's transition from online bookstore to an integrated online shopping mall is well under way. Our strategy of placing more emphasis on third party marketplace continues in 2013. Going forward, we will undertake more business initiatives to drive marketplace growth, bringing in more merchants and providing more fulfilment support to them, and to ensure that Dangdang customers enjoy rich selections, competitive pricing and seamless shopping experience," Ms. Yu continued.
"We are pleased with the strengthening financial results in the first quarter, making it a robust start of the fiscal year. As we continued to grow sales and drive operational efficiencies, our gross margin increased to 17.2%, an improvement of 300 basispoints over the same period last year. Our net loss narrowed to RMB72.7 million, or negative 5.5% of total net revenues, representing improving margin for the third quarter in row," said Mr. Jun Zou, Dangdang's Chief Financial Officer. "Likewise, cash flow from operations increased by 51% year-over-year, mainly due to better working capital management."
First Quarter 2013 Results
Dangdang's total net revenues in the first quarter of 2013 were RMB1,333.8 million (4.7 million), a 23% increase from the corresponding period in 2012.
Media product revenue for the first quarter of 2013 was RMB863.9 million (9.1 million), representing a 24% increase from the corresponding period in 2012. General merchandise revenue for the first quarter of 2013 was RMB411.7 million (.3 million), a 12% increase from the corresponding period in 2012, representing 31% of total net revenues, as compared to 34% in the corresponding period in 2012. Other revenue including revenue from third-party merchants for the first quarter of 2013 was RMB58.1 million (.4 million), representing a 194% increase from the corresponding period in 2012.
Dangdang had approximately 7.4 million active customers including approximately 2.4 million new customers in the first quarter of 2013, representing a 21% and 24% increase from the corresponding period in 2012. Total orders for the first quarter 2013 were approximately 14.8 million, a 21% increase from the corresponding period in 2012.
Cost of revenues was RMB1,104.9 million (7.9 million), representing 82.8% of total revenues, as compared to 85.8% in the corresponding period in 2012. The decreased cost of revenues as a percentage of total revenues was primarily due to the execution on the strategic category mapping to move certain categories to the marketplace and economies-of-scale in some of Dangdang's self-procurement categories. Gross margin in the first quarter of 2013 was 17.2%, as compared to 14.2% in the corresponding period in 2012 and 13.4% in the fourth quarter of 2012. The year-over-year increase was primarily due to the increase of other revenue, representing the sustained scaling of the marketplace, as well as improved self-procurement margin due to economies of scale. The quarter-over-quarter margin improvement was primarily due to increased margin of self-procurement business as a result of better category selection and commercial terms with suppliers.
Fulfillment expenses which include warehousing and shipping expenses, were RMB184.6 million (.7 million), representing 13.8% of total revenues, compared to 16.2% in the corresponding period in 2012 and 12.0% in the fourth quarter of 2012. The year-over-year decrease was primarily due to consistent operating leverage and improved warehousing management systems.
Marketing expenses were RMB43.2 million (.0million), representing 3.2% of total revenues, compared to 2.7% in the corresponding period in 2012. The increase was primarily due to increased spending in navigation website and other targeted marketing campaigns related to our membership program.
Technology and content expenses were RMB49.3 million (.9 million), representing 3.7% of total revenues, compared to 3.0% in the corresponding period in 2012. The increase was primarily due to increased engineering headcount and investment in IT facilities.
General and administrative expenses were RMB32.4 million (.2 million), representing 2.4% of total revenues, compared to 2.5% in the corresponding period in 2012. General and administrative expenses remained in line with the expansion of the business year-over-year.
Share-based compensation expenses, which were allocated to related expense line items, were RMB2.6 million (
BEIJING, May 17, 2013 /PRNewswire/ — E-Commerce China Dangdang Inc. (“Dangdang” or the “Company”) (NYSE: DANG), a leading business-to-consumer e-commerce company in China, today announced its unaudited financial results for the first quarter ended March 31, 2013. First Quarter 2013 Highlights Gross Margin in the first quarter of 2013 was 17.2%, the highest level since the second quarter of 2011, compared to 14.2% in the first quarter of 2012 and 13.4% in the fourth quarter of 2012. Net Loss for the first quarter of 2013 was RMB72.7 million ($11.7 million), representing 5.5% of total revenues, as compared with a [...]
.4 million) in the first quarter of 2013, compared to RMB2.8 million in the corresponding period in 2012,representing a 7% decrease.Dangdang recorded an operating loss of RMB80.4 million (.9 million) in the first quarter of 2013, as compared with an operating loss of RMB107.2 million in the corresponding period in 2012, primarily due to increase of gross margin and consistent operating leverage.
Operating loss excluding share-based compensation expenses (non-GAAP) was RMB77.8 million (.5 million), as compared with an operating loss excluding share-based compensation expenses (non-GAAP) of RMB104.4 million in the corresponding period in 2012.
Net loss was RMB72.7 million (.7 million), as compared with a loss of RMB99.5 million and RMB 122.1 million in the first and fourth quarters of 2012 respectively, primarily due to our efforts to increase gross profit and operating leverage.
Net margin was negative 5.5%, as compared with a negative net margin of 9.2% in the corresponding period in 2012.
Net loss excluding share-based compensation expenses (non-GAAP) was RMB70.1 million (.3 million), as compared with a net loss excluding share-based compensation expenses (non-GAAP) of RMB96.7 million in the corresponding period in 2012.
As of March 31, 2013, Dangdang had cash and cash equivalents, restricted cash, and short-term time deposits of RMB1,584.7 million (5.1 million), as compared to RMB1,634.6 million as of December 31, 2012.
Capital expenditures for the first quarter of 2013 were RMB24.3 million (.9 million), including RMB11.8 million spending on the construction of Tianjin warehouse.
Adjusted EBITDA loss (non-GAAP) in the first quarter of 2013 was RMB65.1 million (.5 million), as compared with an adjusted EBITDA loss of RMB94.8 million in the corresponding period in 2012.
Outlook for Second Quarter 2013
Dangdang expects total net revenue in the second quarter of 2013 to be around RMB1,486 million representing year-over-year growth of around 23%. We also expect GMV from our marketplace to grow at a rate of 175% year-over-year in the second quarter of 2013. This forecast reflects Dangdang's current and preliminary view, which is subject to change.
Filing of Annual Report on Form 20-F
On April 10, 2013, the Company filed its annual report on Form 20-F for the fiscal year ended December 31, 2012 that includes its audited financial statements with the Securities and Exchange Commission. The annual report is available on the Company's investor relations website at http://ir.dangdang.com. Holders of the Company's securities may request a hard copy of the Company's annual report free of charge.
Conference Call Information
Dangdang's management will host an earnings conference call at 8:00 AM on May 16, 2013 U.S. Eastern Time (or 8:00 PM on May 16, 2013 Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as follows:
US:
+1-718-354-1231
Hong Kong:
+852-2475-0994
International:
+65-6723-9381
Please dial-in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "Dangdang earnings call."
A replay of the conference call may be accessed by phone at the following number until May 23, 2013:
International:
+61 2 8199 0299
Passcode:
70532296
Additionally, a live and archived webcast of this conference call will be available at http://ir.dangdang.com/ until November 30, 2013.
About Dangdang
E-Commerce China Dangdang Inc. ("Dangdang" or the "Company") (NYSE: DANG) is a leading business-to-consumer e-commerce company in China. On its website dangdang.com, the Company offers more than 900,000 books and other media products as well as selected general merchandise products including beauty and personal care products, home and lifestyle products, baby, children and maternity products, apparel, digital and electronics products. It also operates the dangdang.com marketplace program, which allows third-party merchants to sell their products alongside products sourced by the Company. Dangdang's nationwide fulfillment and delivery capabilities, high-quality customer service support and scalable technology infrastructure enable it to provide a compelling online shopping experience to customers.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the outlook for the second quarter 2013 and quotations from management in this announcement, as well as Dangdang's strategic and operational plans, contain forward-looking statements. Dangdang may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Dangdang's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Dangdang's growth strategies; its future business development, results of operations and financial condition; its ability to attract and retain new customers and to increase revenues generated from repeat customers; its expectations regarding demand for and market acceptance of our products and services; trends and competition in China's business-to-consumer e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of the Chinese business-to-consumer e-commerce market; Chinese governmental policies relating to Dangdang's industry and general economic conditions in China. Further information regarding these and other risks is included in Dangdang's annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. Dangdang does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release and in the attachments is as of the date of this press release, and Dangdang undertakes no duty to update such information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Dangdang's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), we use the following measures as the non-GAAP financial measures defined by the SEC: non-GAAP operating loss, non-GAAP operating margin, non-GAAP net loss and adjusted EBITDA loss (collectively referred to as the "Non-GAAP Financial Measures" thereafter). We define non-GAAP operating loss, non-GAAP operating margin and non-GAAP net loss as operating loss, operating margin and net loss excluding the impact of share-based compensation expenses respectively; we define adjusted EBITDA loss as loss before interest, taxes, depreciation, amortization, other non-operating income, and share-based compensation expenses. We review the Non-GAAP Financial Measures together with net loss or income to obtain a better understanding of our operating performance. We believe that these Non-GAAP Financial Measures provide meaningful supplemental information regarding the Company's performance and liquidity. However, a limitation of using the Non-GAAP Financial Measures as an analytical tool is that they do not include all items that impact our net loss for the period. In addition, because they are not calculated in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider the Non-GAAP Financial Measures in isolation from or as an alternative to net income/loss prepared in accordance with U.S. GAAP.
For information on the reconciliation between the Non-GAAP Financial Measures and the GAAP financial measures presented in accordance with U.S. GAAP for the periods presented, please see the table captioned "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP financial measures" at the end of this release.
For investor and media inquiries, please contact:
Allie Du
Investor Relations Department
E-commerce China Dangdang Inc.
+86-10-5799-2257
duwenwen@dangdang.com
Caroline Straathof
IR Inside
+31-6-54624301
info@irinside.com
E-Commerce China Dangdang Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share related data)
As of
December 31,
2012
As of
March 31,
2013
RMB
RMB
US$
(Audited)
(Unaudited)
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
432,703
383,722
61,783
Restricted cash
709,417
708,521
114,079
Time deposits with original maturities exceeding three months
492,445
492,412
79,283
Inventories
1,485,579
1,449,911
233,450
Accounts receivable, net
56,610
70,720
11,387
Prepaid expenses and other current assets
203,294
189,266
30,474
Amounts due from related parties
320
320
51
Total current assets
3,380,368
3,294,872
530,507
Fixed assets, net
116,391
110,065
17,722
Construction in progress
4,883
55,613
8,954
Prepaid land lease payments
44,209
43,986
7,082
Prepaid expenses and deposits
37,275
9,633
1,551
Total assets
3,583,126
3,514,169
565,816
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term bank loans
600,000
300,000
48,303
Accounts payable
1,563,787
1,858,914
299,303
Deferred revenue
228,765
183,293
29,512
Accrued expenses and other current liabilities
414,776
471,780
75,961
Amounts due to related parties
2,333
2,333
376
Total current liabilities
2,809,661
2,816,320
453,455
Non-current liablities
33,966
32,155
5,178
Total liabilities
2,843,627
2,848,475
458,633
Shareholders' equity:
Class A common shares (par value of US
BEIJING, May 17, 2013 /PRNewswire/ — E-Commerce China Dangdang Inc. (“Dangdang” or the “Company”) (NYSE: DANG), a leading business-to-consumer e-commerce company in China, today announced its unaudited financial results for the first quarter ended March 31, 2013. First Quarter 2013 Highlights Gross Margin in the first quarter of 2013 was 17.2%, the highest level since the second quarter of 2011, compared to 14.2% in the first quarter of 2012 and 13.4% in the fourth quarter of 2012. Net Loss for the first quarter of 2013 was RMB72.7 million ($11.7 million), representing 5.5% of total revenues, as compared with a [...]
.0001 per share,686,505,790 shares authorized, 268,919,350 and 268,931,850
shares issued and outstanding as of December 31, 2012 and
March 31, 2013, respectively)
200
200
32
Class B common shares (par value of US
BEIJING, May 17, 2013 /PRNewswire/ — E-Commerce China Dangdang Inc. (“Dangdang” or the “Company”) (NYSE: DANG), a leading business-to-consumer e-commerce company in China, today announced its unaudited financial results for the first quarter ended March 31, 2013. First Quarter 2013 Highlights Gross Margin in the first quarter of 2013 was 17.2%, the highest level since the second quarter of 2011, compared to 14.2% in the first quarter of 2012 and 13.4% in the fourth quarter of 2012. Net Loss for the first quarter of 2013 was RMB72.7 million ($11.7 million), representing 5.5% of total revenues, as compared with a [...]
.0001 per share,313,494,210 shares authorized, 131,916,660 shares issued
and outstanding as of December 31, 2012 and March 31, 2013)
103
103
16
Additional paid-in capital
1,855,164
1,857,766
299,119
Accumulated other comprehensive loss
(92,066)
(95,763)
(15,419)
Accumulated deficit
(1,023,902)
(1,096,612)
(176,565)
Total shareholders' equity
739,499
665,694
107,183
Total liabilities and shareholders' equity
3,583,126
3,514,169
565,816
E-Commerce China Dangdang Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except share related data)
Three Months Ended
March 31,
2012
March 31,
2013
March 31,
2013
RMB
RMB
US$
(Unaudited)
(Unaudited)
(Unaudited)
Net revenues
Product revenue
1,063,855
1,275,610
205,386
Media
695,976
863,898
139,096
General merchandise
367,879
411,712
66,290
Other revenue
19,769
58,144
9,362
Total net revenues
1,083,624
1,333,754
214,748
Cost of revenues
(929,287)
(1,104,891)
(177,898)
Gross profit
154,337
228,863
36,850
Operating expenses:
Fulfillment
(175,530)
(184,590)
(29,721)
Marketing
(29,589)
(43,232)
(6,961)
Technology and content
(32,071)
(49,320)
(7,941)
General and administrative
(26,831)
(32,414)
(5,219)
Government grants
2,445
329
53
Total operating expenses
(261,576)
(309,227)
(49,789)
Loss from operations
(107,239)
(80,364)
(12,939)
Interest income
6,437
8,859
1,426
Interest expense
(366)
(4,480)
(721)
Other income, net
1,645
3,275
527
Loss before income taxes
(99,523)
(72,710)
(11,707)
Income tax expenses
-
-
-
Net loss
(99,523)
(72,710)
(11,707)
Net loss attributable to common shareholders
(99,523)
(72,710)
(11,707)
Net loss per common share
- Basic
(0.25)
(0.18)
(0.03)
- Diluted
(0.25)
(0.18)
(0.03)
Net loss per ADS
- Basic
(1.25)
(0.91)
(0.15)
- Diluted
(1.25)
(0.91)
(0.15)
Net loss allocated to common shareholders used in net loss per
share/ADS calculation
- Basic
(99,523)
(72,710)
(11,707)
- Diluted
(99,523)
(72,710)
(11,707)
Shares used in net loss per common share computation:
Class A common shares:
- Basic
265,306,426
268,924,378
268,924,378
- Diluted
397,223,086
400,841,038
400,841,038
Class B common shares:
- Basic
131,916,660
131,916,660
131,916,660
- Diluted
131,916,660
131,916,660
131,916,660
ADSs used in net loss per ADS calculation
- Basic
79,444,617
80,168,208
80,168,208
- Diluted
79,444,617
80,168,208
80,168,208
Other comprehensive loss
Foreign currency translation adjustment, net of taxes
(1,416)
(3,697)
(595)
Comprehensive loss attributable to common shareholders
(100,939)
(76,407)
(12,302)
Share-based compensation
(In thousands, except share related data)
Three Months Ended
March 31,
2012
March 31,
2013
March 31,
2013
RMB
RMB
US$
(Unaudited)
(Unaudited)
(Unaudited)
Share-based compensation expenses included are as follows:
Operating expenses:
Fulfillment
480
424
68
Marketing
83
81
13
Technology and content
248
262
42
General and administrative
1,981
1,830
295
Total
2,792
2,597
418
(1) This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.2108 to USBEIJING, May 17, 2013 /PRNewswire/ — E-Commerce China Dangdang Inc. (“Dangdang” or the “Company”) (NYSE: DANG), a leading business-to-consumer e-commerce company in China, today announced its unaudited financial results for the first quarter ended March 31, 2013. First Quarter 2013 Highlights Gross Margin in the first quarter of 2013 was 17.2%, the highest level since the second quarter of 2011, compared to 14.2% in the first quarter of 2012 and 13.4% in the fourth quarter of 2012. Net Loss for the first quarter of 2013 was RMB72.7 million ($11.7 million), representing 5.5% of total revenues, as compared with a [...].00, the noon buying rate on Mar 29, 2013 in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York.
(2) Each ADS represents five common shares of the Company.
Non-GAAP operating loss, operating margin and net loss
(In thousands)
Three Months Ended
March 31,
2012
March 31,
2013
March 31,
2013
RMB
RMB
US$
(Unaudited)
(Unaudited)
(Unaudited)
Loss from operations
(107,239)
(80,364)
(12,939)
Share-based compensation expenses
2,792
2,597
418
Non-GAAP operating loss
(104,447)
(77,767)
(12,521)
Operating margin
-9.9%
-6.0%
-6.0%
Impact due to share-based compensation expenses
0.3%
0.2%
0.2%
Non-GAAP operating margin
-9.6%
-5.8%
-5.8%
Net loss
(99,523)
(72,710)
(11,707)
Share-based compensation expenses
2,792
2,597
418
Non-GAAP net loss
(96,731)
(70,113)
(11,289)
Adjusted EBITDA
(In thousands)
Three Months Ended
March 31,
2012
March 31,
2013
March 31,
2013
RMB
RMB
US$
(Unaudited)
(Unaudited)
(Unaudited)
Loss from operations
(107,239)
(80,364)
(12,939)
Add back：
Depreciation and amortization
9,626
12,626
2,033
Share-based compensation expenses
2,792
2,597
418
Adjusted EBITDA
(94,821)
(65,141)
(10,488)
SOURCE E-commerce China Dangdang Inc.
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Fresh protests over Kunming plant
Protesters have taken to the streets of Kunming in China for the second time this month over plans for a refinery.
The government says the plant, set to produce gasoline and petrochemicals including paraxylene, or PX, is essential to the local economy and will meet environmental standards.
But protesters fear it will end up polluting air and water.
Photos on weibo, China's version of Twitter, show people wearing masks and waving banners amid tight security.
The China National Petroleum Corporation plans to build the refinery in the nearby town of Anning. It would produce gasoline, diesel and fertilisers as well as PX.
But not all are in favour of the plan, with some residents asking for the project's environmental review to be made public.
"The refinery is too close to Kunming," a protester was quoted by the South China Morning Post newspaper as saying. "We don't want the refinery."
Reports said several hundred protesters were involved. An estimate by the Associated Press news agency put the number at about 2,000.
On 4 May, hundreds of people also protested against the plant, with some carrying posters warning against the dangers of a PX spill.
A petition has also been posted on the White House website asking the US government to "remonstrate with [the] Chinese government" over the refinery. To date it has over 14,000 signatories.
The petitioners said they feared the plant would "jeopardise human health" because reliable "scientific assessments" had not been made, and PX was potentially carcinogenic.
Two years ago, protests against a PX factory in the city of Dalian forced the city government to close the plant, though it reportedly re-opened later.
China's rapid industrialisation has brought serious environmental concerns - but in recent years public protests have forced some projects to be reconsidered.
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Nike’s Beijing Flagship Store Replaced By H&M
April 29, 2013 | By ChinaRetailNews.com Editor | Print | Email
Nike's flagship store in Beijing Wangfujing's shopping area, which is the company's first flagship store in China, will be reportedly closed when its lease expires, and H&M will be the new lessee of this site.
According to reports in Chinese local media, Nike's Wangfujing flagship store was opened in 2007. With an area of 1,100 square meters, the store has three floors. Nike's sales are not bad and the company is reportedly willing to continue the rental. However, the local owner apparently prefers young and fashionable brands like H&M.
Industry watchers in local media said that the Chinese sportswear market is still depressed and its attraction to consumers has decreased, even for first-class international brands. Nike's report for the second financial quarter of 2013 showed that from September to November 2012, its sales in China decreased by 11%, representing the largest decrease among its global markets.
Prior to this, Nike announced plans to open 40 to 50 factory stores in 2013 and products sold in these stores will be discounted up to 70%. Adidas also said that their development focus for 2013 would be store expansion in medium- and small-sized cities in China. The company will open 800 new stores in China in 2013 and two-thirds of them will be in medium- and small-sized cities.
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HK dockworkers accept pay offer, end 40-day strike
Hong Kong dockworkers have accepted a 9.8 percent pay increase, ending a 40-day strike that slowed traffic at one of the world's busiest ports.
About 90 percent of the workers voted late Monday in favor of the offer from four middleman contractors that provide staff to a container terminal operator controlled by Hong Kong billionaire Li Ka-shing.
The strike was the longest in years in the former British colony, now a semiautonomous Chinese city that retains a reputation as a stronghold of laissez-faire capitalism. It raised questions about the competitiveness of the city's port amid intensifying competition from regional rivals.
About 450 workers went on strike March 28. They originally demanded a raise of up to 23 percent to make up for pay cuts in previous years. They later said they would settle for a double-digit percentage increase.
Lawmaker and union leader Lee Cheuk-yan said the offer was a face-saving compromise but members are happy because the increase is for all workers, not just those who went on strike. The offer also addresses complaints about working conditions, with provisions for lunch and bathroom breaks, he added.
Striking crane operators had complained about being forced to eat and relieve themselves in their control pods because they didn't have enough time to make the long trip to use the facilities. They expressed their anger by camping out in front of a skyscraper in Hong Kong's financial district owned by Li, Asia's richest person.
Li's port operator business, Hutchison Port Holdings, said it can now "focus on restoring the port to its full operational capabilities."
"It's back to work as normal," Lee said, but he added that workers would not stop camping out at Li's tower until 100 crane operators who lost their jobs after contractor Global Stevedoring Service Co. went bust during the strike, are offered work by the other contractors taking up the slack.
The strike delayed cargo being moved on and off ships at the terminal, resulting in a backlog of 80,000-90,000 containers at the port during the strike, according to the Hong Kong Association of Freight Forwarding and Logistics.
Hutchison said last month that it was operating at 80-90 percent of capacity and that 100 ships had reportedly skipped the port because of delays. Some shipping companies chose to bypass Hong Kong in favor of nearby Shenzhen in mainland China or other ports in Asia.
Other vessels berthed at terminals in Hong Kong not controlled by Hutchison. The company operates 12 berths at four of Hong Kong's nine container terminals and two others with a joint venture partner.
Hong Kong is a major transshipment hub for goods moving in and out of mainland China. It was the world's busiest port for years, handling shipments of jeans, shoes and toys manufactured in southern China's Pearl River Delta for export to consumers in the West. But it has been overtaken by Shanghai and Shenzhen in recent years.
___
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China factories should adopt point-of-use inventory
by Dr. Mark McKay
Last month I wrote about the need to learn how successful manufacturers in the past dealt with rising labor costs and changing global business conditions. This month I want to think about one of those successful strategies: supply chain partnerships.
I will describe a supply strategy that I see again and again. I almost always recommend against this strategy because really it is just a bad habit that is hard to break. Then I will describe how to make a better supply strategy.
In your factory, do you use some kind of commodity as a raw material? Maybe it is steel, copper, cotton, lumber or something else. Do you try to “beat the market” by buying large quantities when costs are low so that you will be well-stocked when costs are high? Please stop that. In the long run, it is a losing strategy. The most successful companies in advanced manufacturing do not use this strategy.
This may be a surprise, but you would likely be much better off purchasing materials only when they are needed, and from a highly qualified supplier.
Commodities trading is an industry in itself. In London, Hong Kong, New York, Dubai and 100 other financial centers around the globe, highly trained traders work constantly to win the commodities game. They buy low and sell high. They understand how to use complicated options to hedge their bets. They are supported by entire teams of analysts in buildings full of supercomputers. Are you really that good? You need to be brutally honest with yourself about this. Can you really beat those guys at their own game? If you can, then congratulations. Maybe you should be closing your factory so you can spend all your time in commodities.
But maybe you are not that good. Maybe professional commodity traders see you the same way a professional card player sees the tourist in the casino. If you are not that good in your commodity bets, you should be trying to make money with the value adding you perform in manufacturing. Stop trying to finance cash flow needs by winning at such a risky game. It is gambling, there is no other name for it, and it would not be much different if you told yourself that a trip to Las Vegas or Macau was a business investment.
So what is the alternative?
Find a vendor that will absorb the commodity risk for you and deliver these raw materials in small quantities ready-to-use. Instead of buying a month’s worth of materials, imagine buying materials enough only for one day. Imagine the material being delivered ready to use, exactly as your worker needs it. Imagine the delivery driver bringing raw materials all the way into the factory, right up to the machine where you will first do something with it.
We call this "point-of-use" delivery and it has many advantages. Here are just a few:
- You will free up all the cash you now have tied up in raw material inventory.
- You will gain flexibility with your customers because you will not be trying to push them into buying the old stuff in the warehouse. You can move with agility as demand moves from one product type to another.
- You can demand perfect quality from your vendor because you will immediately see whether raw materials meet requirements.
- Your vendor can perform the low-margin and low-skill value adding to the raw material that is not profitable for you. (I call these the "commodity activities.")
- You can focus your management expertise on the core business where you really earn your money.
- You can simplify communication on the factory floor and back to your vendor. When everyone sees exactly what should be done, the boss no longer has to tell them to do it. Or to make another example, when the delivery driver sees what materials need to be delivered, you will not need a purchasing manager to tell him to do it.
Obviously, you need a vendor you can trust to adopt this strategy. Find one. As China moves into higher-skill processes, the companies that try to play the supply game the old way will soon find themselves left out in the cold.
Know your skill and focus on that skill. It is your core competency. Do not be envious when you hear about someone who earned millions by placing all the right bets on aluminum, plastic, chromium or whatever. Of course there will be a lucky few, just as there are a lucky few who hit the jackpot at the casino. But those beautiful casinos did not get built without suckers who lost at the game. Have you ever seen how beautiful are the offices of a big-city commodities trader? Don’t be the sucker at that game either.
Dr. Mark McKay is the owner of the MJMcKay Corp., a consultancy that does strategic training and tours for global family-owned businesses. He is also the Associate Dean and Professor for the School of Business at Trinity Western University in Vancouver, Canada. You can read his strategy blog Sense out of Confusion and contact him at info@mjmckay.com
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Hangzhou Welcomes First Sam’s Club
May 8, 2013 | By ChinaRetailNews.com Editor | Print | Email
Sam's Club, the membership store of Wal-Mart, has opened its ninth China outlet with a new site in Hangzhou.
Located in Hangzhou's Xixi In-City, the new Sam's Club has an area of over 20,000 square meters. It provides about 4,600 kinds of well-selected products, including fresh food, dry goods, home appliances, household supplies, and apparel. Meanwhile, to meet local consumers' demands for high-end products, the new Sam's Club offers various imported products, accounting for 25% of all products sold in this site.
The membership warehouse-style business model of Sam's Club allows Hangzhou people to enjoy quality products, a comfortable and spacious shopping environment, as well as 1,200 free parking spaces.
Andrew Miles, senior vice president of Wal-Mart China and chief operating officer of Sam's Club, told local media that Sam's Club is one of the successful business models of Wal-Mart and it is a focus for Wal-Mart's future development in China. Over recent years, China experienced rapid growth and people have more disposable income, which brings unprecedented development opportunities to Sam's Club. The company is confident in the development of China. Following the opening of Hangzhou Sam's Club, they plan to soon open another outlet in nearby Suzhou.
In 1996, the first Chinese Sam's Club store opened in Shenzhen. With the opening of the new Hangzhou Sam's Club, the brand now has nine outlets in seven cities in China.
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Chrysler moves closer to restarting Jeep production in China
SHANGHAI, CHINA — Chryslers Jeep is moving closer to resuming production in China for the first time since 2009, but that production will not reduce or substitute for Jeep production in the U.S., Jeep CEO Mike Manley said.
In fact, the brand is boosting production in Detroit, Toledo or Belvidere, Ill., where it is adding 4,000 this year.
More China sales means a healthier Chrysler, Manley said.
For us to continue the growth of the Jeep brand and therefore be successful because of that, you need to produce locally for the local market, Manley said in a group interview at the Shanghai Auto Show.
Chrysler signed a deal in January with Guangzhou Auto Group to establish a joint venture. Although the company needs Chinese government approval, Manley said hes optimistic production can start by the end of 2014.
Jeep is well-known in China because it was the first U.S. automaker to sell vehicles there. Former owner American Motors launched the Beijing Jeep joint venture in 1979 with government-owned Beijing Auto Works. Production began in 1985.
Chrysler bought American Motors in 1987 and continued running Beijing Jeep until early 2009. Cerberus Capital Management, the private equity fund that owned Chrysler, then exited the venture shortly before Chryslers U.S. taxpayer-backed bankruptcy.
Two weeks before the U.S. presidential election last year, Jeep was sucked into what turned out to be one very big misunderstanding. Republican candidate Mitt Romney repeated rumors that Jeeps plan to resume making SUVs in China would come at the cost jobs in Toledo and Detroit. Chrysler CEO Sergio Marchionne clarified that any production in China would be in addition to Jeep output in the U.S.
Jeep did export 46,000 vehicles in 2012 to China, which surpassed Canada as Jeeps second-biggest market, Manley said.
Sales in China are limited without local production. Tariffs imposed on imported vehicles and powerful engines, the majority of Jeeps in China cost more than 0,000, Manley said.
A fresh wave of Chinese consumers are flocking to crossovers and sport-utility vehicles. Yale Zhang, managing director of Automotive Foresight Shanghai, said the SUV segment will grow from about 15% of Chinas market today to 20% in 2015, or from 2 million last year to 3.5 million by 2015.
Competitors are flooding the market with SUVs and crossover vehicles. General Motors recently started selling the Buick Encore, and Ford is introducing the Ford Kuga (Escape) and EcoSport vehicles.
This week at the Shanghai Auto Show, Mercedes-Benz showed the GLA concept vehicle.
For Jeep, Chinese production would reduce shipping costs and bring prices into a competitive range.
Manley said the new Cherokee, which will go on sale in the U.S. by late September, likely will be Jeeps first vehicle produced in China.
Manley said he hopes to expand Jeeps China dealer network from about 150 today to 200 by the end of the year. In addition, Jeep already has more than 200 licensed retail stores selling Jeep merchandise, including the Jeep Spirit line of sport clothing.
Owners of Cherokees purchased in the years before the 2009 Beijing Jeep shutdown have formed Jeep clubs, proving that its legacy resonates.
"Awareness of the brand is huge," Manley said.
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