Vipshop (VIPS) 4Q16 Results: Solid Performance Beats Estimates, on Jump in Active Customer Base and Expansion of Logistics Service

Executive Summary

• Vipshop reported 4Q16 revenue of ¥19.0 billion, up 36.5% year over year, beating consensus by 4%. This was primarily driven by the increase in the number of total active customers and total orders.
• The operating margin decreased to 4.9% during the quarter, from 5.8% in 4Q15, while the gross margin decreased by 60 basis points to 23.5%. GAAP basic EPS was ¥6.6, up 51.0% year over year.
• The number of active customers in 4Q rose by 38.9% to 27.5 million, while total orders also grew 26.3% year over year to 82.0 million.
• The company guided for 1Q17 revenue growth of 26%–30% year over year. It expects capex to stay flat in 2017–2018 and decline significantly in 2019, and to maintain gross margin at 23.5% in 2017.