[Direct News Network Beijing May 9th] (no fashion Chinese network) After delivering the expected first-quarter results, direct selling giant Nu Skin Enterprises, Inc. (NYSE: NUS) such as the new stock price rose nearly 30% on Wednesday.

 

As of the first quarter of March 31, such as new net profit increased by 21.0% to $43.002 million, compared with $35.539 million in the same period of fiscal year 2018, earnings per share increased from $0.64 to $0.77, far exceeding Zacks' expectations of $0.71; 1.2% to 623.6 million US dollars, far exceeding Zacks's forecast of 615.4 million US dollars, the same period in 2018 was 616.2 million US dollars, the fixed exchange rate calculation 1-3 months, such as new income growth of 7%.

 

The first quarter revenue growth was mainly led by the market's worried mainland China market. The revenue during the period increased from US$197.5 million to US$208.5 million, and the fixed exchange rate increased by 12%. The actual increase was about 6%.

 

 

At the end of 2018, Quanjian Group suffered a crusade against the whole people. The 20 billion empire headquartered in Tianjin not only collapsed, but the founder of the group, Shu Huihui, was also arrested at the beginning of the year. Earlier this year, the Chinese government clearly tightened the approval of the direct selling industry.

 

In view of the previous involvement in the MLM survey in early 2014, the company was questioned by Stifel analyst Mark Astracha at the end of March and downgraded its rating from “hold” to “sell”. Analyst Mark Astracha said that the current uncertainty of China's direct selling companies is increasing, and in the middle of February, the newly announced fourth-quarter results show that its largest mainland China market sales unexpectedly recorded a 2% decline in October-December. The US$222.3 billion fell to US$217 million, a sharp increase in the 31% growth in the third quarter. However, the Utah-based direct selling giant blamed it on the high base of the same period last year. In the whole year of 2018, the mainland China market sales increased by 24% to 88.65 million US dollars, and the fixed exchange rate increased by 21%.

 

At the analyst conference call after the performance meeting, the questions and answers of analysts and new management are basically around China.

 

For example, Ritch Wood, the new CEO, also spent a minute at the performance meeting to update the current status of health care products in the Chinese mainland market, including 13 ministries and commissions including the State Administration of Markets and Regulations, starting from January 8th, nationwide. Launched a 100-day “health” market chaos and joint rectification campaign. He pointed out that special actions have restricted the holding of meetings, but if 70% of the sales in the Chinese mainland market come from personal care, the action has now ended and the Chinese government has also held a press conference presentation.

 

According to Ritch Wood, the mainland China market is one of the largest and fastest growing direct selling markets in the world, and the business environment is full of vigor. I believe the company has a bright future in this market and, as always, follow the government's guidance to the company over the past 17 years. Although the supervision is expected to continue in the second quarter, the restrictions on the meeting are expected to be relaxed. In response to questions from analysts, he maintained an annual growth target of 7-10% in the Chinese mainland market.

 

Group President Ryan S. Napierski said at the performance meeting that he had just returned from China to China a few days ago. In mainland China, he met with several Chinese government officials, media people and new sales representatives, and expected the mainland China market in 2019. It will grow further because, as in the past 17 years, it will move forward in a dynamic Chinese business environment.

 

According to the latest quarterly report, although the number of sales leaders in the first quarter of the Chinese market dropped slightly from 27,045 to 26,986, the number of customers (such as new products purchased directly from new and not new sales staff in the past three months) increased. It surged 36%, from 200,231 to 272,053.

 

Ritch Wood explained in an analyst conference call that the difference between the two key metrics is that sales leaders (because of regulation) can't work as they have in the past, but customer growth is expected to spur the growth of sales leaders back on track in the second half.

 

The above data shows that although at the end of March, if a new Beijing salesman was suspected of drinking the company's products and was killed by the delay in treatment, the number of customers of the US giant was not affected in the first quarter. The growth of 17% of customers in the Mainland and Southeast Asia markets has stimulated a total of 1,193,206 customers in the new quarter, compared with 1,085,564 in 1018.

 

Ritch Wood praised the positive performance of Greater China and East Asia in the earnings report, as well as 10% customer growth in the quarter. He pointed out that he is confident in the current growth of FY 2019 and will continue to invest in technology to increase productivity while better supporting the company's sales leadership, expanding the global beauty equipment system through product introduction and product line expansion, and optimizing the rapid sales compensation plan.

 

Chief Financial Officer Mark Lawrence said that LumiSpa's performance in mainland China was strong in the first quarter of last year, and this year's new product launch will be in the second half of the year, so the performance in the second half will be better than the first half. He also said that LumiSpa is currently a new NO.1 product, with sales of up to $75 million in the first quarter.

 

Benefiting more than expected quarterly results and significant growth in mainland China customers, as well as the end of regulatory special actions, Nu Skin Enterprises, Inc. (NYSE: NUS), such as the new stock price closed at $64.32 on Wednesday, soared 26.44%, and before Wednesday, as of the end of April, The stock plunged about 17% and fell 29% in the past 12 months.

 

For the current second quarter, such as the new expected income of 6.60-6.80 billion US dollars, representing a 3-6% increase, EPS is expected to be 0.91-0.98 US dollars; the annual EPS is expected to be 3.80-4.05 US dollars, the income is expected to be 27.6-28.1 billion US dollars, representing 3- 5% increase.