The author is a researcher at the Alpha Workshop.

(The information in this report is derived from publicly available information and does not constitute any investment advice)

US Mission Review-W (HK:03690) Once the 2018 annual report was issued, many investors froze the pot:

Most of the evaluations are negative. "The loss is 100 billion yuan. This product may never be profitable. The cost brought by hundreds of thousands of riders can be crushed by the US group. It has already been said, and it is already hungry. It’s all good..."

Of course, the evaluation is also positive. The US group is very bullish, and now it is a valuation of the market sales rate, which has great value.

We believe that the pertinent evaluation of Mito must be split into business: O2O (to shop, hotel and tourism) is already a cash cow, and there is a trend in food and beverage delivery. These two business models are good; in terms of new business, The expansion within the capacity circle is fine, and the ability to open the road outside the capacity circle, if not restrained, may always suppress the valuation of the US group.

01 US two cash cows

In 2018, the US group's revenue was 65.227 billion yuan, a year-on-year increase of 92%, and the adjusted loss was 8.517 billion yuan, an increase of 198.6%. Let’s take a look at the income segment:

(1) The Thousand Regiments came to the fore, and O2O was a cash cow in good value.

The annual revenue was 15.84 billion yuan and the gross profit was as high as 14.095 billion yuan. The low price of the US group and the UGC (user-originated content) of the review propped up a broad moat, and the member marketing system further enhanced the merchant's stickiness.

With this part of the income increasing by 46% compared with 2017, the gross profit margin has actually increased slightly, which is enough to show the pattern of its exclusive victory.

(Click to see the big picture)

(2) O2O gave birth to a takeaway, when the cash cowboy grew up.

I have talked about it many times before, and all good companies are malleable, and those who do not seek the world are not in a hurry. Google from search to Android, driverless, AI; byte beats from today's headlines to vibrato, connotation, and Wukong question and answer. They always ran out of the second growth curve at the peak.

At the peak of O2O, the US Mission began to cultivate the second growth curve of the take-away business. We want to talk about the high-frequency business (takeaway, eat every day) to drive the low-frequency business (O2O, haircut, small sword every other time) , watching movies, KTV) logic.

In fact, the take-out business of the US group did indeed spur a bloody road from the encirclement of Baidu’s take-out and hungry.

The third-party data organization DCCI, the recently released report of the 2019 take-out industry, "Network Outsourcing Service Market Development Research Report" shows that the market share of the US group's take-out, hungry and hungry stars is 64.1% and 25% respectively. And 8.7%.

The US group has been selling in the industry at home and abroad and has become a market leader. It is likely to become another cash cow in the old road that O2O business has traveled.

All in all, the situation of O2O & takeaway business is a good one. But why, the US group's valuation is better than that of the US counterparts, but it is also the platform of Alibaba, and there are safe doctors?

02 Uncontrolled business philosophy

Unprofitable but profitablethe InternetCompanies generally use P/S (marketing ratio) to value. Compared with the peer Grubhub, the US group is still in a state of being smuggled compared with the similar models of Alibaba and Ping An.

The P/S of the US Mission is 3.64, the P/S of Grubhub is 7.09, the P/S of Alibaba is 9.22, and the P/S of Ping An Doctor is 11.9.

(Click to see the big picture)

What suppressed the valuation of the US group? ? ?

There is no doubt that it is a new business. Here we need to look at it in two. For example, the large platform of the US group has been expanding, from the beginning of the restaurant to the hotel's O2O, from O2O to take-out, from take-out to ERP (enterprise resource planning) and the food supply chain. These businesses are fine, they have synergies.

The synergy effect points to three aspects: the Metro Corps can be covered together, which can bring traffic to the business of the US Mission, and the flow output can be rewarded for new business.

I am afraid that I will be afraid of new businesses that have no synergy, such as bicycles and online cars.

Let's talk about cycling first. First of all, it doesn't need to be pushed. Secondly, the traffic is limited. Super APP WeChat can avoid borrowing cars. Who will use the US group APP to scan the code to borrow? Finally, the US group exported traffic to it, and it did not get a good commercial return. The reason is very simple. The bicycle damage and depreciation is too serious. It is not that the friends are deliberately destroying, that is, the sunshine and the rain are not good, not to mention the manpower. Scheduling costs.

When the income of a bicycle

Besides, the network about the car, the same does not need to push, in the crowd you do not know who is the "running the United States, running the drip" master. Secondly, although the network car is higher than O2O, but when it comes to aggregate traffic, this logic chain may be a bit long and it will take time to test. But the most important issue is that before you need to gather traffic, you can only divert O2O after doing the big network car business.

What conditions do you need to do to make a big network car business?

There is no other way than burning money. It is necessary to know that Didi has been a network of cars and rivers, accounting for 90% of the shares. And burning money may not be able to get good results. Compared with other defeats of the US team, the drops are also crawling out of the dead.

Mobike bicycles and network car, in fact, is the beginning of the expansion beyond the ability circle. In April 2018, the US group spent 2.7 billion yuan to buy Mobai, and for the rest of the year, Mobai contributed a loss of 4.55 billion yuan to the US group. In addition, the US Mission also spent 4.463 billion yuan on the network driver.

Wang Xing, the founder of the US group, said that there is a book that has a lot of influence on me - called "Limited and Unlimited Games." Limited games play within the boundaries, and infinite games are played with the boundaries, that is, with the "rules," exploring the boundaries themselves. There is actually only one infinite game, that is your life, and death is an insurmountable boundary. Other boundaries are less important than this.

In fact, the boundary of Didi is very important. If you forcibly cross this type of border, you can play unlimited games indiscriminately. It may not be beneficial to consume a large amount of the capital of the US group, resulting in a profitable period of nowhere. If there is such an expectation, the capital market has to give a lower valuation.

(Click to see the big picture)