What is the biggest mistake in stock trading? Undoubtedly, I bought Chinese stocks.
U.S. stocks closed on Thursday, with popular Chinese stocks plummeting en masse, with Yixian E-Commerce plunging 39.52 percent and its share price falling to $0.75, a record low. The reason for the volatility was that five Chinese stocks entered the US SEC's "scheduled delisting list", which caused panic in the market.
Since 2021, the US government has frequently taken measures against Chinese stocks, causing them to be hit hard. In particular, after the deterioration of Russian-Ukrainian relations, the imposition of financial sanctions by the West has further exacerbated market concerns about the prospects of Chinese stocks.
In this context, Yixian E-commerce has suffered a "knee cut" in its stock price in just one year.
The K line shows that Yixian e-commerce has entered a deep correction channel since it hit $25.47 on February 10, 2021. The latest closing price fell more than 97% compared to the high, and it is almost difficult for investors to see the hope of returning to the bottom.
At present, the total market value of Yixian E-commerce is only 473.8 million US dollars, about 2.996 billion yuan, and the valuation has fallen to the level of an ordinary small-cap stock in A shares.
In the scale shareholder group, some investors said, "Live for a long time, in this life and in this life, I will never dare to touch Chinese stocks again, it is too dangerous."
Some investors complained, "Since the bottom of the Chinese stocks, every day the mood is complicated, and the loss is going to leave blood and tears."
Another investor said, "A friend bought hundreds of thousands of Chinese stocks, and now there are almost only a fraction left in the account, this is the rhythm of bankruptcy, right?" ”
Yixian E-commerce has not been established for a long time, and in just a few years, its revenue has increased from 635.3 million yuan in 2018 to 5.840 billion yuan in 2021.
As of 2020, Yixian e-commerce has a market share of more than 8%, making it the largest domestic makeup company in China. Among them, its main brand Perfect Diary accounted for more than 6% of the market.
The rapid rise of Yixian e-commerce is due to three major favorable factors:
In recent years, there have been a total of 91 investment incidents in the beauty industry; second, consumers' recognition of domestic products has increased, and the rise of national tide culture; third, domestic beauty brands have seized the outlet of live broadcasting and short videos and enjoyed traffic dividends.
From the perspective of industry growth space, cosmetics have development potential. In 2020, the consumption scale of the beauty industry will exceed 300 billion yuan, and some institutions predict that it will exceed 500 billion yuan in the future. At present, the per capita consumption of cosmetics in China is 43 US dollars, which is lower than the consumption level of the United States, Japan and South Korea.
However, the domestic beauty industry also has shortcomings, that is, there are low added value of products, small enterprise scale, weak brands, most of the processing links, and low concentration of the foundry industry.
Back to Yixian E-commerce, the company went public in November 2020 and had a market capitalization of more than $16 billion (about 101.1 billion yuan).
As the first domestic beauty group to go public in the United States, Yixian e-commerce has always received market attention. One of the company's biggest features is that it has lost money for many years.
According to the data, from 2018 to 2021, the net profit attributable to the mother of Yixian E-commerce (RMB) was -40.12 million, 75.36 million, -2.688 billion and -1.541 billion, respectively, with a total loss of more than 4.1 billion yuan.
Huge marketing expenses are one of the "culprits" that cause performance losses.
In the period from 2018 to 2021, the sales expenses (RMB) of Yixian E-commerce were 309.3 million yuan, 1.251 billion yuan, 3.412 billion yuan and 4.006 billion yuan respectively, accounting for 48.68%, 41.27%, 65.2% and 68.59% of the revenue in the same period, respectively.
Some netizens once commented on the perfect diary of Yixian E-commerce, "marketing with heart, products with feet".
The current pressure on Yixian e-commerce also includes sluggish domestic consumer demand and fierce competition in the industry.
On the one hand, affected by the epidemic, the growth rate of the total domestic social zero is in a state of decline, and the growth rate of retail sales of beauty consumption has dropped from more than 45% in the first quarter of last year to less than 5%.
On the other hand, some international head brands have adopted the strategy of increasing investment + large discounts to accelerate the seizure of the domestic beauty market, and local brands have been further squeezed.
How the Yixian e-commerce market performs, we will continue to pay attention!