唯品会（VIPS）：下半年增长动力持续改善；核心竞争力稳固

2023A2024A2025E2026E112,856.0108,420.8105,754.0106,978.09,509.99,032.58,950.09,050.0 Thomas Chong * | Equity Analyst852 3743 8016 | thomas.chong@jefferies.comZoey Zong * | Equity Analyst852 3743 8163 | zoey.zong@jefferies.com The Long View: VIPSInvestment Thesis / Where We Differ•Vipshop's competitive strengths are its brand recognition in discountretail and strong merchandising team that enable it to sustain profitablegrowth.•In 2025, Vipshop intends to continue focusing on strengthening tractionwith existing customers and acquiring new ones.•On logistics, single-order items are placed into third-party deliverynetworks vs. its own to enhance operating efficiency with similarcustomer experience.Base Case,$17.70, +25%•Vipshophasbeencoreapparel category,and leveraging itsmerchandising team.•We expect the strategic investment in ShanShan Outlets (five outlets in Ningbo, Taiyuan,Harbin,Zhengzhou,and Nanchang,withanother five in the pipeline) to make minimalcontribution to the company’s earnings in thenear term, given the small scale.•PT of USD17.7 based on a DCF valuation.Sustainability MattersTop Material Issue(s): 1) Customer Privacy/Data Security.VIPS has access to consumers’information, and it should comply with all the regulations regarding personal information protectionand strengthen security and compliance in data use.2) Product Design & Lifecycle Management.VIPS should invest in green packaging and prevent wastage of material and reduce carbon emissionsthroughout business procedures.3) Product Quality & Safety.VIPS mainly sells discounted apparel.It is important to ensure product quality and protect the rights of consumers.Company Target(s): 1)To reach peak carbon by 2030 and carbon neutrality by 2060, in line withChina's decarbonization goal.2)To improve the percentage of standardized products to 33% to offermore unique brands with competitive prices and high quality to consumers.Qs to Mgmt: 1)What are you investing in or what changes have you made to better protect consumerpersonal information?2)What level of costs can be saved and how much do you need to invest ingreen packaging?3)What steps have been taken to ensure product quality and customer experience?Please see important disclosure information on pages 6 - 11 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. re-emphasizing its Risk/Reward - 12 Month View242220181614121020252024$23.80, +68%usergrowthonsynergies with Tencent.•Stronger-than-expected GMV and revenuegrowth on solid execution.•Better-than-expected margin on solid cost•PT of USD23.8 based on a DCF valuation.Downside Scenario,$10.20, -28%•Weaker-than-expected user growth. Weaker-than-expected GMV and revenue growth.•Worse-than-expected margin on intensifyingcompetition.•PT of USD10.2 based on a DCF valuation.Catalysts•Stronger user growth•Deeper partnership with Tencent•Faster-than-expected margin expansion Upside Scenario,•Better-than-expectedcontrol. 2 (6)SVIP outlook.Management expects no of SVIP members to maintain double-digit YoY growthfor full year. VIPS aims to drive engagement of SVIP customers through exclusive sales. GMVfrom SVIP contributes about 51% of online spending in 1Q. In terms of operating metrics, it isrelatively stable. ARPU is dropping YoY mainly due to mix with new members. For SVIP (2-yearcohorts), ARPU experienced slight YoY decline. (7)Product returns.VIPS launches free returnswith consistent policies throughout the years. Product returns increase by about 2 pp YoY, whichis lower than other EC platforms. (8)Shareholder returns.It is committed to return no lessthan 75% of 2024 non-GAAP net income to shareholders. It returned USD400m to shareholdersYTD, which includes USD250m annual dividend and over 150m buyback program; (9)Trade inprogram.VIPS does not have much exposure in home appliances and the impact of trade-inprograms to GMV is 1%. (10)S&M ratio.S&M ratio is well controlled and LTV a key focus. It hasdiversified marketing channels which is evaluated based on ROI. (11) Shan Shan outlets.Outletis a proven business model, and application of REITs is under review. The funding can be used inexisting and new projects. (12)Comments on HK listing.VIPS is closely following capital marketdevelopment and evaluate internally. It will keep market posted if there is any progress.Valuation and risks.We maintain our Buy and adjust DCF-based PT of USD17.7 (prior USD18.3),factoring in the latest business developments. Risks include (1) macro headwinds leading tosofter-than-expected online shopping growth; (2) aggressive sales and marketing spending dueto competition; and (3) user growth coming in softer than market expectations.Please see important disclosure information on pages 6 - 11 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Exhibit 1 - VIPS US: Income Statement.RMB mnTotal RevenueYoY % changeCost of revenueGross profitGross marginFulfi