Q2 2020 Bitauto Holdings Ltd Earnings Call
[music].
Hello sake, we stand in line for Bitautos second quarter 2020 earnings conference call at this time.
He said pets and these multi mode for the managements prepared remarks feel good question dances caching city spots insisting recorded.
He said any attention you may disconnect at this time.
Like the tend to meeting with your hosts for todays conference.
Thank you.
All those second quarter 20, <unk> earnings conference call speakers from the company today are Mr., John CEO Mr. being shoes CFO.
Before we proceed. Please note discussions today will contain certain forward looking statements made under the safe Harbor provisions of the U.S. Private Securities Litigation Reform Act.
Any.
Forward looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from our current expectations.
Central risks and uncertainties include but are not limited to those elements in our public filings with the FCC, including registration statement form F. One.
Auto does not undertake any obligations to update any forward looking statements, except as required under applicable law.
This call will include discussions of certain unaudited non-GAAP financial measures. Please refer to our earnings release, which was issued earlier today for reconciliations of these unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures.
As a reminder, this conference is being recorded.
In addition, a live and archived webcast and conference will be available on our website.
I'll now turn the call over to Andy John CEO.
Hello, everyone and thank you for joining us for our second quarter 2020 earnings call in the second quarter Chinas domestic automobile industry remain.
Alan Jean Wood sluggish retail passenger vehicle sales and the rising levels of dealer inventories.
Especially considering a resurgence of the cobot 19 outbreak in some major cities in June.
In June while these factors adversely impacted our business, we're confident that the gradual macro economic recovery across many industries will present, a strong opportunities will be auto in the month ahead.
Okay, our advertising and the subscription businesses weak vehicle sales and the increasing Lee fierce competition in Chinas online auto mobile advertising effect to put pressure on our advertising business during the second quarter.
However, our subscription business achieved mild revenue growth thanks to the slight increase in autos paying subscriber base.
Turning to our transaction services business during the quarter easing recorded about 69000 total transactions in the second quarter, representing a year over year decrease of approximately 49.9% decrease was primarily driven by using is more conservative risk control approach.
Looking ahead in response to the uncertainties in China's overall environment and the particularly the automobiles effect that we will stay focused on our core strategies is strategic initiatives first we will continue to upgrade and improve our content product offerings, which we believe will provide better value to autumn about consumers.
Our owners automakers and dealers customers second we continue focusing on our ongoing strategic brand building campaigns to further raised the autos branded recognition the order to expand our bayes user base any has user engagement.
Third easing will continue to optimize is conservative risk assessment methodology, and strengthens dealer financial institution partnerships to explore opportunities as chinas automotive as a market recovers. We believe our efforts will help strengthen the autos position as the leading provider of internet content and the marketing so.
And the transaction services for Chinas auto industry.
With that I'll turn the call works for me to go over the financials.
Thank you Andy good evening, everyone. Despite the gradual recovery of China's economy in the second quarter Twentytwenty automobile factor continued to underperform on the relative basis impacting on top line results. Additionally, we'll continue to see margin pressure during the quarter due to ongoing investments and.
Youth acquisition as well on its our strategic branding and marketing initiatives.
For the long run.
We believe these investments will form a solid foundation to attract more users to bid auto and enhanced our value proposition to automotive maker and dealer business partners now, let's look at our Q2, two Twentytwenty financial highlights. Please note that our referenced financial figures in RMB bid.
We reported revenue of RMB 1.96 billion in a second quarter of 2020 compared to RMB 2.79 billion in the corresponding period in 2019.
Revenue from the advertising and subscription business in the second quarter of 20 to 20 was RMB 1.3 billion, representing a 2.2% increase from RMB.
1.001 billion in the corresponding parenting Tonti 19.
Revenue from the transaction services business.
Second quarter of Twentytwenty was RMB 700, 738 million compared to RMB 1.9 billion in the corresponding period in 2019, mainly due to a week passenger vehicle sales falling the corporate 19 outward and more cautious underwriting standard impulse buy easy.
Revenue from the digital marketing solution business in the second quarter of Twentytwenty was on the 190.3 million compared to RMB 294.7 million in corresponding period in 2019.
Cost of revenue in the second quarter Twentytwenty was RMB.
654 million compared to RMB 1.12 billion in the corresponding period in 2019 cost of revenue as a percentage of revenue in the second quarter of Twentytwenty was 13.
33.4% compared to 40% in the corresponding period in 2019.
Gross profit in the second quarter Twentytwenty was RMB 1.3 billion compared to RMB 1.7.
Six 7 billion in the corresponding period in 2019.
Selling and administrative expenses in the second quarter Twentytwenty won the 1.8 billion, representing a 10.1% increase.
From the corresponding period in 2019, the increase was primarily due to increasing provision for credit losses of the receivable related to issue and the increasing marketing expenses associated with the companys branding and marketing efforts.
Partly offset by the degree decreasing amortization of intangible assets.
Related to the strategic cooperation with JV dot com and decreasing expenses related with person now.
Product development expenses in the second quarter of Twentytwenty were RMB 147 billion, representing a 3.7% increase from the corresponding period in 2019.
Share based compensation, which was allocated to relative related operating expense items.
It was RMB 55 million in the second quarter Twentytwenty compared to RMB.
100 million in a corresponding period in 2019 non-GAAP loss from operations in the second quarter Twentytwenty was on the 594 million compared to non-GAAP income from operations of RMB 200, 215 million in the corresponding period in 2019 net loss in the second call.
Total Twentytwenty was RMB 536 million compared to net loss of RMB 136.
Merely corresponding period in 2019 net loss attributable to that auto in the second quarter of 2020 was RMB 369 million compared to net loss attributable to bid auto of RMB 146 million in a corresponding period in 2019.
Non-GAAP net loss in the second quarter of 20 to 20 was RMB 447 million compared to non-GAAP net income of RMB one.
$216 million that second quarter of 2019th non-GAAP net loss attributable to Bill also in the second quarter 2020 was RMB 334 million compared to RMB net income attributable to Bill auto of RMB 155 million in the corresponding period in 2019.
Basic and diluted net loss per adss.
Each representing one ordinary share in the second quarter of Twentytwenty amounted to RMB.
Five point 15, and RMB five point 15, respectively.
[noise] net net non-GAAP basic and diluted net loss for Mds in the second part of Twentytwenty amounted to RMB 4.6.
Hi, and.
On the 4.65.
Respectively as of June Thirtyth, Twentytwenty, the company had cash and cash equivalent and restricted cash RMB 8.6 billion.
Cash used in operating activities cash provided by investing activity and cash usage financing activities in the second quarter 2020 were RMB 831 million RMB 3.3 billion in RMB 2.2 billion respectively. In addition.
Given eating scale and significance to get auto I would also like to share with you. Some of you. She was operating and financial highlights for Q2 2020.
But out of control subsidiary Shing approach a primary operator of the company's transaction service business facilitated approximately 69000 finance transactions for the three months ended.
June Thirtyth twentytwenty, representing a year over year decrease of approximately 49.9%. The decrease was primarily driven by eating more conservative risk control methodology.
The total aggregate finance X amount facilitated through 18th losses patient services and self operated financing business was approximately approximately RMB five point.
Three 8 billion amidst the challenging macroeconomic environment eating continued to adopt conservative risk control methodology and to focus on is known for the patient services for the three months ended.
June Thirtyth 2020 eating facilitated approximately 53 per thousand 50, 53000 finance transactions, representing a year over year decrease of 21% and approximately.
77% of eating total financing transactions the told in the second quarter of 2020 on the U.S. gap Inc. total revenue were RMB 745 million, representing a year over year decrease of 50%.
Nucor, New core services revenue, which includes.
Revenues from low for visitation transactions and a new our self operated financing leaf transactions facilitated by you think during the period were RMB 258 million, representing a year over year decrease of.
57% as of June Thirtyth, 20, 2090 days past has to ratio and 180 days.
As you ratio for all financed the transactions were 2.46% and a 1.4% respectively.
On the U.S. gap Inc. provision for credit losses, our financial receivables.
Third quarter of 20 to 20 was RMB 321.4 million.
With that I'd like to.
Starting with you in his section.
Operator. Please go ahead question.
Yes, it a question answer session.
Ladies and gentlemen.
We wish to ask questions, let's take one question.
All right.
More than one question. Please request to join the question again.
Yes.
If you have questions. Please press star one and your telephone keypad.
Once again for your question. Please press star the number one on your telephones.
Well, she Indiana the conference call I'll now turn the color.
Yes.
For closing remarks.
Oh and again, thank you for joining us today, if you have any further questions. Please contact our IR team, Thank you and Tonight.
Thank you for your participation in today's conference. This concludes the presentation.
Good day.
[music].
[music].
[music].
Hello, and thank you extended life or beat autos second quarter 2020 earnings conference call at this time.
He said pessimism only mode for the managements prepared remarks, there will be question answer session. Today's conference is being recorded.
He said that objections you may disconnect at this time.
Instead of meeting over the host for todays conference.
Thank you.
Welcome to auto second quarter 20, <unk> earnings Conference call speakers from the company today are Mr., Randy Johnson CEO Mr. makes you yep.
Before we proceed. Please note that discussions today will contain certain forward looking statements made under the safe Harbor provisions of the U.S. Private Securities Litigation Reform Act.
Forward looking statements are subject to risks and certainties, which may cause actual results to differ materially from our current expectations.
Central risks uncertainties include but are not limited to those out.
Well I like to be a PC.
Who the registration statement form F. One.
The auto does not undertake any obligations to update any forward looking statements, except as required under applicable law.
This call will include discussions of certain unaudited non-GAAP financial measures. Please refer to our earnings release, which was issued earlier today for reconciliations of these unaudited non-GAAP measures and to the most directly comparable unaudited GAAP measures.
As a reminder, this conference is being recorded.
In addition, a live and archived webcast conference will be available on our website I.
Well now turn the call over to Andy John CEO.
Hello, everyone and thank you for joining us for our second quarter 2020 earnings call in the second quarter Chinas domestic automobile industry remain.
Alan Jain with sluggish retail passenger vehicle sales and the rising levels of a dealer inventory.
Especially considering a resurgence of cobot 19 outbreak in some major cities in Jill.
Hi, Jim while these factors adversely impacted our business, we're confident that the gradual macro economic recovery across many industries will present, a strong opportunities with the auto in the months ahead.
Okay, our advertising and subscription businesses weak vehicle sales and increasing Lee fierce competition Chinas online auto mobile advertising effect, Oh pressured our advertising business during the second quarter.
However, our subscription business achieved mild revenue growth thanks to the slight increase in the autos paying subscriber base.
Turning to our transaction services business during the quarter easing recorded about 69000 total transactions in the second quarter, representing a year over year decrease and brought some 49.9% decrease was primarily driven by Asia is more conservative risk control approach.
Looking ahead in response to the uncertainties in China's overall environment, and the particularly the automobiles et cetera.
We will stay focused on our core strategies of strategic initiatives first we will continue to upgrade and improve our content product offerings, which we believe will provide better value to autumn about consumers car owners automakers and dealer customers second well continue focusing on our ongoing strategic blend building.
Campaigns to further raised the autos branded recognition the order to expand our bayes user base any has user engagement.
Third you she will continue to optimize its conservative risk assessment methodology, and strengthens dealer financial institution partnerships to explore opportunities of Chinas automotive market recovers. We believe our athletes will help strengthen the autos position as the leading provider of internet content and the marketing.
Uh huh.
Transactional services for Chinas auto industry.
With that I'll turn the call works for me to go over the financials.
Thank you Andy good evening, everyone. Despite the gradual recovery of China's economy in the second quarter of Twentytwenty automobile sector continues on the fall on the relative basis impacting our topline results. Additionally, it will continue to see margin pressure during the quarter due to ongoing investment in youth.
That position us well, that's our strategic branding and marketing initiatives.
For the long run.
We believe these investments will form a solid foundation to attract more uses to bid auto and enhanced our value proposition to automotive maker and dealer business partners.
Now, let's look at our two to two Twentytwenty financial highlights. Please note that I will reference financial figures in RMB Bitauto reported revenue of RMB 1.96 billion in a second quarter 2020 compared to RMB 2.79 billion and the corresponding period in 2019.
Revenue from the advertising and subscription business in the second quarter 2020 was RMB 1.03 billion, representing a 2.2% increase from RMB.
1.001 billion in the corresponding parity on T. 19.
Revenue from the transaction services business.
Second quarter Twentytwenty was RMB 700, 738 million compared to RMB 1.9 billion in the corresponding period in 2019, mainly due to a week passenger vehicle sales falling that 90 outward and more cautious underwriting standards imposed by eating.
Revenue from that digital marketing solution business in the second quarter Twentytwenty whats on the 190.
3 million compared to RMB 294.7 them it in and corresponding period in 2019.
Cost of revenue in the second quarter Twentytwenty was RMB.
654 million compared to RMB 1.12 billion in the corresponding period and continuing cost of revenue as a percentage of revenue in the second quarter Twentytwenty was setting.
These 3.4% compared to 40% in the corresponding period on Tonight.
Gross profit.
In the second quarter Twentytwenty was RMB 1.3 billion compared to RMB 1.7.
7 billion in the corresponding period in 2019.
Selling and administrative expenses in the second quarter, probably 21 1.8 billion, representing a 10.1% increase from the corresponding period in 2019. The increase was primarily due to increasing provision for credit losses of the receivable related to <unk> and the.
Increasing marketing expenses associated with the company branding and marketing effort.
Partly offset by the degree decreasing amortization of intangible assets.
Related to the strategic cooperation with JP dot com and decreasing expenses related with person now.
Product development expenses in the second quarter Twentytwenty were RMB 147 billion, representing a 3.7% increase from the corresponding period in 2019.
Share based compensation, which was allocated to relative related operating expense item.
Well its RMB 55 million in the headquarters 2020 compared to RMB.
100 million in the corresponding period in 2019 non-GAAP loss from operations in the second quartile Twentytwenty was on the 594 million compared to non-GAAP income from operations RMB 200, 215 million in the corresponding period in 2019 net loss independent.
Auto Twentytwenty or RMB 536 million compared to net loss RMB 136.
Mainly in the past bonding period in 2019 net loss attributable to that auto it hasn't caught up 2020 was RMB 369 million compared to net loss attributable to bid auto of RMB 146 million in a corresponding period in 2019.
Non-GAAP net loss in the second quarter of 2020, with RMB 447 million compared to non-GAAP net income of RMB one.
Hundred 16 million that second quarter of 2019, non-GAAP net loss attributable to but also in the second quarter 2020.
It was RMB 334 million compared to RMB net income attributable to bid author of RMB 155 million in the corresponding period being taught the 19th basic and diluted net loss per adss.
Each representing one ordinary share in the second quartile 2020 amounted to RMB.
Five point 15, and RMB five point 15 spectacular.
[noise], netting net non-GAAP basic and diluted net loss in.
In the second part of 2020 amounted to RMB 4.6.
Hi, and.
On the 4.65.
Respectively as of June Thirtyth tied to talk to the company had cash and cash equivalent unrestricted cash RMB 8.6 billion cash using operating activities cash provided by investing activity and cash using financing activities in a second quarter 2020 RMB 800.
31 million RMB 3.3 billion in RMB 2.2 billion, respectively. In addition.
Given eating scale and significant stupid, although I would also like to share with you. Some of you. She was operating and financial highlights for Q2 2020.
It off controlled subsidiary Shing approach a primary upgrade to the Companys transaction service business facilitated approximately 69000 finance transactions for the three months ended.
June Thirtyth twentytwenty, representing a year over year decrease of approximately 49.9%. The decrease was primarily driven by eating more conservative risk control methodology.
The total aggregate finance amounts facilitated through 18th losses of the patient services as self operated financing business less approximate approximately RMB five point.
The 8 billion.
The challenging macroeconomic environment, you should continue to adopt conservative risk control methodology and to focus on is known for the patient services.
For the three month ended.
June Thirtyth 2020, he can facilitate at approximately 53 per thousand 50, 53000 finance transactions, representing a year over year decrease of 21%.
And approximately.
77% of eating total financing transactions and the told in the second quarter of 2020 on the U.S. GAAP <unk> total revenue.
745 million, representing a year over year decrease up 50%.
New core new core services revenue, which includes.
Revenues from loan participation.
Is that a new all self operated financing leaf transaction facilitated by using during the period, well RMB 258 million, representing a year over year decrease of.
57% as of June Thirtyth, 20, 2090 days past past few ratio and 180 days.
After ratio for all financed the transactions were up 2.46% and a 1.4% respectively.
On the U.S. GAAP <unk> provision for credit losses of financial receivables.
Quota of 20 to 20 was RMB 321.4 million.
With that I'd like to.
Starting with two in a fashion.
Operator. Please go ahead of question.
Yes, it a question answer session.
Ladies and gentlemen in order to <unk>.
We wish to ask questions, let's take one question time, let's call them. If you have more than one question. Please request to join the question again.
That's right.
Canada. If your question. Please press star one your telephone keypad.
Yeah.
Once again for your question. Please specify the number one.
Sounds.
We now approaching the end of the conference call I'll now turn the color, but soon to be autos CFO mixes.
Thanks.
Oh once again, thank you for joining us today, if you have any further questions. Please contact our IR team, Thank you and Tonight.
Thank you for your participation in today's conference. This concludes the presentation.
Now disconnect.