Qeeka Home Half-year net Profit RMB 35 mn, Material Supply Chain be the New Profit Point

Qeeka Home released its interim financial report on the Aug 20, the report displayed that revenue of the first half year of 2019 was RMB 366 million, an increase of 33% over the same period of last year. The adjusted net profit was RMB 35 million, 16.5% year-on-year growth. Among them, the online platform business continued growth trend, increasing 57.1% to RMB 224.6 million comparing with the corresponding period of last year.

Except for to the online platform business, self-operated interior design and construction business, economic observer reporters also noted that, Qeeka Home listed the material supply chain business as the company's third business by the first time.

As for the change in the interim report, Deng Huajin, chairman and CEO of the company responded "list the material supply chain separately, hoping to see the operation of each of our business more clearly when we expand the scale in the future.

In fact, Qeeka Home has been building the material supply chain system since last year. As early as on the eve of the listing to the HKex, Deng Huajin said in the internal letter that the company would invest more capital and energy in the integrations of supply chain. Looking back to the past year, in order to integrate the upstream and downstream of interior design and construction industry, Qeeka Home not only launched the "Qijia Quality Supply Chain Alliance" plan, but also cooperated with Zhibang Home, Meida and Tubao in the household subdivision. It also announced "SSF Strategy", to increase the opening up of the platform, and to force in the service provider side and user side simultaneously, to further improve the supply chain overall layout.

According to the interim report, the revenue of the material supply chain business in the first half year was RMB 28.9 million, an year on year increase of 66.8%, and the gross profit margin increased from 9.6% to 13.6%, this business is becoming a new profit point. " If we do not improve the operational efficiency between material supply chain and IDC service providers, the supply chain model itself is of no value. " In Deng Huajin's view, the current supply chain business is not the most efficient mode , but by optimizing the process and cooperation mode, the model can reflect the efficiency.

However, Deng Huajin stressed that Qeeka Home did not simply pursue the scale of the material supply chain," has been running and testing". He revealed that Qeeka Home will expand it's scale when the supply chain model matures.

In addition to continuing to maintain revenue growth of the core business, Qeeka Home is also looking for other ways of monetization. "Saas and Paas will bring new revenue growth in the future." Deng Huajin pointed out that this requires to invest lots of resources in improving the operational efficiency, conversion efficiency, collaborate material suppliers and IDC service providers. Furthermore, the current exceptionally hot short video also let Deng Huajin see possible opportunities, he believes that the introduction of relevant video content, can bring a certain amount of traffic growth for Qeeka Home.