Am I reading this right? They are saying in the first quarter, they increased their total number of branded stores by over one half their previous number????? Wow!
Unreal. Here it is:
[The Comapany} today announced that the number of independently-owned, Yongye branded stores selling the Company's Shengmingsu products increased 52% over the first three months of 2010 to approximately 13,880 stores from 9,110 stores as of December 31, 2009.
Not a misprint. Many of us have anticipated that their store expansion would accelerate even more because they know the key to their torrid sales growth is in driving up the number of branded stores and in advertising and promotion blitzs. Look at their 4th quarter. 275% sales growth YoY; that was not an accident.
At this rate, they will hit their target of 20,000 stores not by year end but by July. 30,000 stores by year end is a stretch but certainly not out of the question. I have said many times that management tend to underpromise and overdeliver, and will up guidance through the year. The first up guidance came last month, from 50% growth to 65% growth. Wouldn't you also expect that if the stores keep growing at this rate they could easily grow 75%, even 100% for the year?
I am very confident that the Q1 numbers next week will be yet another blowout (see our discussions from two weeks ago concerning Q1 numbers), like Q4. The question is, with Q1 being a low volume quarter like Q4, would the market be impressed?