News Analysis: Feb 2022 GMV surged 87% y-o-y, above market expectations
What’s New
– HKTV (1137 HK) announced its Feb operating statistics on Friday after morning trading session.
– GMV in Feb 2022 increased by 87% y-o-y and 22% m-o-m to HK$854m, above market expectations, thanks to increasing demand for online shopping amid fifth wave of Covid-19.
– GMV y-t-d grew by 52% y-o-y to HK$1,553m. The growth rate is way higher than market expectations of c.20% for FY22 full year.
– Average daily order number in Feb 2022 reached 59,300 orders, increased by 77% y-o-y or 25% m-o-m.
– Average order value increased by 6% y-o-y or 8% m-o-m to HK$515.
– Number of unique customers who make purchases increased by 52% y-o-y or 7% m-o-m to 582k.
– In terms of operation, the company mentioned that they are facing operating challenges on order fulfilment as 20% of frontline talents are under quarantine due to COVID-19.
– The company expects the order cancellation ratio will increase from current 2.5%, if pandemic condition continues to deteriorate and frontline labor shortage cannot be resume in short term.
– Besides, the company will postpone the plan to enable 90-95% orders meeting “2 days delivery” in 2022 due to pandemic impact. It will review the plan after the fulfillment capacity resumes to normal.
Our View:
– We expect the market to react positively to the strong Feb GMV growth.
– We believe that the GMV could sustain strong growth in next few months.
– While labour shortage is potential risk in the near-term, as long as GMV growth remains strong, the market should view HKTV as a beneficiary in fifth wave of the pandemic.
– The company has added 17% extra frontline workforce by recruiting unemployed workforce and drivers to cope with the surge in orders.
– We currently rate BUY on the counter with TP of HK$10.