Q1 2021 Smart Share Global Ltd Earnings Call
[music].
Today's conference call the scheduled to begin the shortly please continue the standby. Thank you for your patients. Once again today's conference is scheduled to begin shortly please continue this time body. Thank you for your patients. Thank you.
[music].
Hello, and thank you for standing by for Energy Monsters, 2021 first quarter earnings conference call. At this time, all participants on listen only mode. After management's prepared remarks, there will be a question and answer session of today's conference is being recorded if you have.
Have any objections you may disconnect at this time.
I would now like to turn the meeting over to your host for today's conference call Director of Investor Relations at Hudson. She. Thank you. Please go ahead.
Thank you welcome to our 2021 first quarter earnings Conference call. Joining me on the call today on March High Energy Monster, Chairman and CEO and Barry <unk>, our CFO for today's agenda management will discuss business updates operation highlights and financial performance for the first quarter of 2.
'twenty 1.
Before we continue I refer you to our Safe Harbor statement in the earnings press release, which applies to this call as we will make forward looking statements.
Also the Cogs include the discussion of certain non-GAAP financial measures.
Please refer to our earnings release, which contains the reconciliation of non-GAAP measures for the most directly comparable GAAP measures.
Finally, please note that unless.
Unless otherwise stated all figures mentioned during the call are in RMB.
I would now like to turn the call over to our chairman and CEO of Marsh side for the business on operation highlights.
Thank you Hannah and good day everyone.
Welcome to energy loans to 2021 first quarter earnings call.
To start of I would love to give a quick introduction of energy amongst them.
We are a consumer tech company, providing mobile device charging service through our network of charging the cabinets, which are placed in high traffic locations such as entertainment venues restaurants shopping centers.
House transportation hubs and public spaces across China.
Users may use the use of our.
Our service by simply scanning the QR code about cabinet through RTP or wechat.
Our Pal of banks, and then return the power of banks to any energy amongst the cabinet across China.
Our service provide clear value proposition to both our users.
<unk> for seamless access to charging service on the go.
2 our location partners, providing for value added the service to their customers.
As of the end of March 2021, we have over 5 6 million power of banks in 716000 piece of lives.
As the number 1 player in China's fast growing mobile charging device industry.
$34 for market share in 2020, we will benefit from the fast growth of the industry.
According to Iresearch report China's mobile device charging for this industry is poised to grow at a CAGR of over 36% from 2022 2028.
The reaching a market size of over RMB $100 billion in 2028.
The growth of the industry is expected to be driven by growing demand for our service.
And the expanding supply through increased location coverage.
On the demand side the increase in smartphone penetration.
And the continuum that the increase in usage of smartphones, which reached.
168 hours per Chinese smartphone users per months.
Key drivers for growth.
The increase in total battery consumption will definitely make the GAAP figure between battery consumption and capacity.
Even to the beyond the current GAAP of 3000, and the etch per day.
And in turn this widening gap will continue to propel the demand for mobile device charging service.
The increasing adoption of <unk> smartphones is another major driver for demand.
Within the <unk> phones on 2 5 times more power consuming them for J devices.
Resulting in faster.
<unk> <unk>.
As a result.
Acquired more than 16 million newly registered unique users during the quarter.
Reflecting the growth demand for mobile device charging service and also our ability to capture this growth.
Now from a supply perspective, we continue to see massive opportunities penetrating into both existing and new of regions expanding.
Expanding into different location types and signing key accounts.
Based on industry research only less than 10% of the potential locations suitable for mobile device charging service is covered in China.
There continues to be large amount of coverage potential to be captured in the future.
Combining the opportunities on both the supply and demand side, we believe that the industry is steel index.
Early stages of development.
And if you filled with massive growth potential.
As the largest provider of mobile device charging service here in China with the strong growth and the resilient profitability, even during the year of COVID-19.
We believe that we are the best positioned provider of mobile device charging service to capture of the growth of the industry.
Now, let me walk you through our core strategies in expanding coverage, improving operational efficiency and exploring new initiatives for the quarter.
First is our coverage expansion strategy.
During the first quarter, we continue to make strides towards making our service more accessible for users across China.
We expanded our coverage in higher tier cities, while also developing our coverage in lower tier cities.
As of the end of the quarter, we covered more than 1600 cities and.
Income tax hearing China Cup from solid.
500 <unk>.
As of the end of 2020.
We strengthened the network partner of investment during the quarter to acquire new high potential network partners to drive the expansion in lower tier cities.
It gives us.
On the network partners more room to quickly reach scale and to see results early on which further aligns the interest between on network partners and us.
By utilizing our operational know how and the big data capabilities that we have refined through our established offline network in the years of experience.
We can drive for the delivery of sustainable and profitable expansion of coverage, while developing value both for our network partners and for energy monitor.
Our investment and commitment to our network partner model look spend and the calculate a larger and stronger distribution network.
Our direct model coverage also expanded as we offer our service to more high quality location partners.
Further propelling our py coverage growth.
The number of <unk> increased from 664000.
As of the end of last year to 715000 as of the end of the first quarter 2021.
Through a balanced expansion of coverage, both new and existing regions.
Our <unk> composition continues to be diversified as we move our service into newer types of venues such as office buildings and retail outlets.
On the <unk> front, we are able to sign a number of important key accounts with extensive offline presence of significant brand awareness during the first quarter of 2021.
Notably we are pleased to announce the signing of KFC the largest restaurant chain here in China.
The signing of KFC gives us stronger coverage across China.
And also give us a strong brand endorsement for energy Master.
With <unk>, such as <unk> group, Shanghai, Disneyland and KFC.
Work closely with them to integrate our service directly into the K 8 themselves.
Allowing their users to seamlessly access mobile device charging service during the visits.
We believe the signing of this case is a testament of our ability to deliver a comprehensive package of service to top national case, reflecting.
Reflecting the quality of our hardware our service and our brand.
It is important to note that the majority of large case with significant offline presence remain untapped here in China.
Going forward, we believe our ability to deliver the most comprehensive package will allow us to attract more case, enabling us to create a stronger network effect.
Next it is about efficiency.
Energy amongst the is by far the leader within the industry in terms of efficiency.
Our power bank yield the highest revenue in any given period.
Our profitability and our growth profile remained consistent.
Our revenue to employee headcount ratio leads the industry.
These achievements and attributes or due to our relentless pursuit of operational excellence.
Our enduring management philosophy here at <unk> is to drive both growth and profitability.
Is it requires us to always make improvements to our incentive and management system to ensure the delivery.
For our BDC and network of partners, we continue to refine the incentive scheme during the first quarter to make sure that we are able to continue expanding to <unk> that generate positive economics.
For the first quarter I have to mention that it is a low season for the business since many locations are closed.
And people intend to stay at home for gatherings during the months of Chinese new year.
On the other side during the quarter, we see strong recovery of revenue propel bank per day on a year over year basis as the impact of COVID-19 dwindled.
But on a quarter on quarter basis the.
Outbreak of COVID-19, and a number of regions such as Beijing Shanghai.
Good day, and also north eastern regions of China.
You bet.
So it will result in a decline in revenue in these areas and also the revenue propel bank per day during January and February.
Despite the impact our operations normalized starting in March when the partial outbreaks were fully contained.
Another part of our efficiency comes from our long term commitment to invest in both software and hardware technology.
For software, we made improvements to our BD tools by implementing new features that further streamline the day to day operations of our employees to improve efficiency.
Allowing each BD to better manage more.
And more power banks with greater efficiency and quality.
In terms of hardware, we have identified additional areas to improve our cabinets and also the power of banks.
In both quality and cost.
We believe our continuous improvement of our operational efficiency and technology will further differentiate and the monster from the other industry peers peers.
Yes.
Lastly, I would love to touch upon new initiatives.
And it's amongst the has accumulated a massive online and of our network since our inception.
We have over 236 million unique registered users and 715000 locations across all provinces of China.
Combined these channels.
On a unique opportunity for us to leverage and to create new products and services.
We are already exploring consumer goods that I can't utilize our online and offline networks for distribution.
Also we are exploring other Iot industries that can leverage an EBIT extend our existing networks.
Going forward, we believe our current set of networks, we have give us a unique advantage in incubating new initiatives from energy amongst them and of creating a company that can truly energized everyday life for all aspects of life.
Overall, we delivered solid results for the first quarter of 2021, despite of Q1 being a low season.
The COVID-19 few having original outbreaks in January and February.
Our core advantages in market leadership industry, leading operational efficiency.
We're recognized brand and reliable hardware and software technologies have allowed us to consistently achieve strong performance and unparalleled unit economics within the industry.
We believe that we can continue expand our existing advantages and to provide comprehensive solutions to more locations and users.
Our long term commitment both growth and profitability will allow us to continue to expand our market share in chinas mobile device charging service industry and to deliver long term value for all of our shareholders.
Now I would turn the call over to Murray of seeing.
Our chief financial Officer for the financial highlights.
Thank you Maher.
Pleased to deliver solid results for the fourth quarter of 2000, the taking the 1 lastly, the achieved strong revenue growth well continue to be profitable. Despite the impact of call. It early 2010 for <unk>.
Recovering in March.
<unk> continually D D, where strong growth goal for the second quarter update of the year.
Now, let me walk you through the financial lease out on greater detail for.
The first quarter of 2021.
Revenue for it.
And what is a quite in the <unk>.
Weekly then will the habit at 62 point of 5%.
Great.
As for mobile device charging business.
160 for quite flat price.
Yes Henry.
6 of <unk>, 8 more and the accounting for let's say what percentage of total level for the quarter the <unk>.
The increase was primarily on back of the impact of COVID-19 on fourth quarter of 2020, and what how do you build it by the oil growth in numbers of appeal.
And of Apple for us part of that.
Revenues from pop ups out of 129, 2% a year.
2 of 25 level and the accounted for 3% of our total of rattle off for the quarter.
1 of the primarily on the back of the impact of COVID-19 on the first quarter of 2020 and the was contributed by the increase the number of <unk>.
And available for use power back.
Other revenues were up.
71, 5% 2 5 for the 1 <unk>.
A copy of the for their appliance the percent of.
Our total of that all the increase was primarily on the back of the empower <unk> on the fourth quarter of 2000 of tiny.
Cost of revenues were up by 14, 5% year on year 2 of 120 for a 0.6 many for the fourth quarter of 2000 the type of 1.
The increase of cost of revenues was primarily due to the increase in the tennis Cup caused the pop ex out and the depreciation.
Gross profit was up 200, and the 37, 7%.
For 2 722 3 million.
For the fourth quarter of 2021 of the increase was primarily due to the increase in revenue from mobile device charging business.
Operating expenses for the fourth quarter of 2021, or 600, and the 98% for billing.
Hundreds of 3 6% year on year, excluding share based compensation non-GAAP operating expenses was 600 and the Nike supply 3 meeting we presented on a year of EBITDA increase of 100 of 4 8%.
Research and the development expenses for the fourth quarter of 2021 or 'twenty 6 needle.
After 24, 2% year on year.
The increase was primarily due to the increase in personnel related expenses.
So on the marketing expenses for the first quarter of 2000 type of 1 or 600, and it's the clean 1 7 million on 107, 4%.
The increase was the primary due to the increased incentive fees paid to the location pattern and that's what pattern for.
The increase in mobile device charging business traveler.
Okay.
Yes.
General and administrative expenses or kind of mistake, 1 8 million in the fourth quarter of 2021.
35, 9% year on year, the increase was primarily due to the increase in personnel related expenses and the spare parts of it expenses.
The expenses.
Income from operations was 2.
93, <unk> compared to a loss from operations of <unk>.
And the type of <unk> in the same period last the year operating margin for the fourth quarter of 2000, the type of 1 or 2 8%.
Net loss was.
<unk> in the fourth quarter of 2 other types of 1 compared to a net loss of 100 and the $37 5 million in the same period last year.
Net Margaret for the fourth quarter of 2021 or 1 8%.
Non-GAAP net income, which excludes share based compensation expenses was $23 2 million in the fourth quarter of 2000, the types of 1 compared to a non-GAAP net loss of 131 1 million in the same period last year.
As of March.
The 31 2021 the <unk>.
How many head of cash and the cash equivalents.
The cash and its all kind of investment of $2 2 billion.
Cash flow generated from operations for the fourth quarter of 2021, or the 100 and the $31 2 million.
Capital expenditures for the fourth quarter of this year, well 100, and the $38 million.
And of the Master credit, we expect to generate 940 million to 900, and the say $70 million of revenue for the second quarter of 2021.
Please note that the forecast the reflects the end it is most of the credit and the preliminary reveal the IND.
And if the operations.
The subject to change.
Thank you for listening we are now ready for your questions operator.
Secondly.
The question and answer session of this conference call will start from the moment.
The to be for all callers, who wish to ask questions. We will take 1 questions at the time from each caller. If you have more than 1 question. Please.
The request you to join the question queue again. After your first question has been addressed.
You asked the question you will need to press star 1 on your telephone and wait for your name to.
To be announced if you wish to cancel your request please press the pound or hash key.
Keith.
The star followed by 1 asked the question. Thank you.
We have the first question from the line of.
<unk> Li from Citigroup. Please go ahead.
Some could even the management thanks for taking my questions and congrats on the successful IPO. My question is related to the competition landscape. So resorts on news that some small players consolidate and other industry players to aim to go public to the.
Management see any change in carbon competition landscape and on the common condition well management provide some color about the churn of revenue sharing with partners in fiscal 2021. Thank you.
Thanks for the question.
We do not see a significant change in competitive landscape.
During the first quarter.
Our core advantage in the network scale operational efficiency in the brand and technologies of <unk>, leading the market.
And we will see that.
We are still gaining share with more locations in cities on board.
So we are confident that if we stick to the strategy that we drive both growth and profitability and focus on the customer satisfaction. So we can get more <unk> users in cities or in a network of partners on board. So we are very confident.
So so far at the conclusion of there is no major change in the dynamics.
Okay.
I saw your country on regarding the revenue sharing percentages.
So and then the direct model for your sense of you'll see that we pay to the location has a nurse.
Black are comparable with the last quarter. So the incentive fee that true network partners increased slightly in the first quarter of this year due to the launch of the net pardon the campaign to have op expense whether into the untapped larger cities.
But unfortunately, we do know Turkey with guidance on this of the percentage.
Yes.
Thank you.
Thank you. Thank you for your question we've had for Nyx.
Thank you.
Our next question from the line of Lucy Li from Goldman Sachs. Please go ahead.
Hi, This is Lucy Yu from Goldman. Thank you for taking my question. So my question is on.
The the post COVID-19 impact so can management share with us for more details on the impact of COVID-19, giving the first corner and the possible impact going forward to the startup.
On a piece.
Thanks for the question.
In early 2021 of the resurgence of COVID-19 occurred in Beijing Shanghai.
And on the.
The northeastern regions of China.
And if we look at the regions that were affected by the outbreak. The gross revenue of these regions in January and February of 2021 were actually down approximately 25% compared to December 2020 levels.
And the other regions.
Not happening in this way so in March of the COVID-19 has been contained and we see a full recovery in terms of gross revenue for these regions.
Affected regions stayed flat during this major or minor outbreaks, meaning.
The impact of COVID-19, our first quarter revenues would have been 8% to 10% higher even if we just.
Make it in a normalized situation the whole national revenue were up 8% to 10%, but unfortunately due to some of the minor of breaks some regions are down 25%.
And we hope that the.
The.
The situation getting much much better than stable, but we do see that in the past weeks.
The province like.
<unk>.
Still have some minor outbreaks and the for example, the city of coffee.
The period were down about 5% to 10%, but I think it's just.
For a moment.
We will have experience to make the business recover even faster.
And then the Opex itself, so that will be the <unk>.
Introduction of the year.
The impact of the COVID-19.
Yeah.
Thank you can we move to the next question. Please.
Okay.
We have a next question.
We have the next question from the line of Ryan <unk> from China Renaissance. Please go ahead.
Good morning, and for your questions. The first of all things that give us more color on the new pure ice cover on this quarter.
The January for.
So it is.
How much percentage of our once through the direct model.
Hang on.
Thank you.
Yes, thanks for the question.
We actually expanded our <unk> coverage.
By more than 50000.
During the quarter. So the total number is increasing and both in higher tier cities and lower tier cities.
Due to we are having the.
Strategy to drive faster of the network partner model. So we witness increase of revenue from the network partner model.
From about 30 or the way growth towards <unk>. So we see some of the <unk>.
The news happening there.
While we're still focusing on the operational excellence on no matter, where we go no matter how many locations mode. At all we are still very confident to make it profitable at the time that we are entering this market on locations.
Yeah, it was carrying that percentage.
<unk>.
Thank you.
Once again, if you wish to ask the question. Please press star 1 on the kind of food and wait for me to.
To be announced.
Okay.
Once again, if you wish to ask a question. Please press star 1 on your telephone.
We are now approaching the end of the conference call I will now turn the call over to energy Monsters CFO.
For closing remarks, thank you.
Once again, thank you for joining us today are placed on the headsets to contact US. If you have any further questions. Thank you for you on continuous PA and the we look forward to speaking with the in the coming months. Thank you.
Thank you very much.
Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day. Thank you.
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Hello, and thank you for standing by for Energy Monsters, 2021 first quarter earnings conference call. At this time, all participants on listen only mode. After management's prepared remarks, there will be a question and answer session of today's conference is being recorded.
Have any objections you may disconnect at this time.
I would now like to turn the meeting over to your host for today's conference call Director of Investor Relations at Hudson Street. Thank you. Please go ahead.
Thank you welcome to our 2021 first quarter earnings Conference call. Joining me on the call today of our March High Energy Monster, Chairman and CEO and Barry <unk>, our CFO for today's agenda management will discuss business updates operation highlights on financial performance for the first quarter of 2.
Also on 'twenty 1.
Before we continue I refer you to our Safe Harbor statement in the earnings press release, which applies to this call as we will make forward looking statements also on this call includes the discussion of certain non-GAAP financial measures.
Please refer to our earnings release, which contains the reconciliation of non-GAAP measures to the bulk of directly comparable GAAP measures.
Finally, please note that unless otherwise stated all figures mentioned during this call on R&D.
I would now like to turn the call over to our chairman and CEO Mark side for the business on operation highlights.
Thank you Henry and good day, everyone and.
Welcome to energy amongst the 2021 first quarter earnings call.
To start of I would love to give a quick introduction of energy loans.
We are a consumer tech company, providing mobile device charging service through our network of charging cabinets, which are placed in high traffic locations, such as entertainment venues restaurants shopping centers hotels transportation hubs and public spaces across chime.
Anna.
Users may use debt.
Our service by simply scanning the QR code of our cabinet through RTP or wechat to borrow our power of banks and then return the power banks to any energy amongst the cabinet across China.
Our service provide clear value proposition to both our users allow.
Allowing for seamless access to charging service on the go.
And to our location partners, providing for value added service to their customers.
As of end of March 2021, we have over 5 6 million power banks in 716000 <unk>.
As the number 1 player in China's fast growing mobile charging device industry.
$34 for market share in 2020, we will benefit from the fast growth of the industry.
According to <unk> Research report Chinas mobile device charging service industry is poised to grow at a CAGR of over 36% from 2020 to 22008, reaching.
Reaching a market size of over RMB $100 billion in 2028.
The growth of the industry is expected to be driven by growing demand for our <unk>.
Service.
And the expanding supply through increased location coverage.
On the demand side the increase in smartphone penetration.
And the continued lack of increase in usage of smartphones, which reached.
168 hour per Chinese smartphone users per months.
Key drivers for growth.
The increase in total battery consumption will definitely make the debt figure between battery consumption and capacity.
Moving to be beyond the current GAAP of 3000, and the etch per day.
And in turn this widening gap will continue to propel the demand for mobile device charging service.
The increasing adoption of <unk> smartphones is another major driver for demand.
Chips within <unk> phones are 2 5 times more power consuming than the <unk> devices.
Resulting in faster at week <unk>.
As a result, we are.
Acquired more than 16 million newly registered unique users during the quarter.
Reflecting the growth demand for mobile device charging service and also our ability to capture this growth.
Now from a supply perspective, we continue to see massive opportunities penetrated into both existing and new of regions.
Expanding into different location types and signing key accounts.
Based on industry research only less than 10% of the potential locations suitable for mobile device charging service is covered in China.
There continues to be large amount of coverage potential to be captured in the future.
Combining the opportunities on both the supply and demand side, we believe that the industry is still in its early stages of the investment.
And if you filled with massive growth potential.
As the largest provider of mobile device charging service here in China with the strong growth and the resilient profitability, even during the year of COVID-19.
We believe that we are the best positioned provider of mobile device charging service to capture the growth of the industry.
Now, let me walk you through our core strategies in expanding coverage, improving operational efficiency and exploring new initiatives for the quarter.
First is our coverage expansion strategy.
During the first quarter, we continue to make strides towards making our service more accessible for users across China.
We expanded our coverage in higher tier cities, while also developing our coverage in lower tier cities.
As of the end of the quarter, we covered more than 1600 cities and.
Income tax hearing China top from solid.
And 500 <unk>.
As of the end of 2020.
We strengthened the network partner of investment during the quarter to acquire new high potential network partners to drive the expansion in lower tier cities.
And it gives us.
On the network partners more room to quickly reach scale and to see results early on which further aligns the interest between on network partners and us.
By utilizing our operational know how and the big data capabilities that we have refined through our established offline network in the years of experience.
We can drive for the delivery of sustainable and profitable expansion of courage, while developing value both for our network partners and for energy monitor.
Our investment and commitment to our network partner model will expand and the calculate a larger and stronger distribution network.
Our direct model coverage also expanded as we offer our service to more high quality location partners.
Further propelling our py coverage growth.
The number of <unk> increased from 664000 ex of the end of last year to 715000 as of the end of the first quarter 2021.
Through a balanced expansion of coverage, both new and existing regions.
Our <unk> composition continues to be diversified as we move our service into newer types of venues such as office buildings and retail outlets.
On the <unk> front, we are able to sign a number of important key accounts with extensive offline presence of significant brand awareness during the first quarter of 2021.
Notably we are pleased to announce the signing of KFC the largest restaurant chain here in China.
The signing of KFC gives us stronger coverage across China.
And also give us a strong brand endorsement for energy Monster.
With <unk>, such as watch all group, Shanghai, Disneyland and KFC.
Work closely with them to integrate our service directly into the K themselves.
Allowing their users to seamlessly access mobile device charging service during the visits.
We believe the signing of K a.
This is a testament of our ability to deliver a comprehensive package of service to top national case.
Reflecting the quality of our hardware our service and our brand.
It is important to note that the majority of large case with significant offline presence remain untapped here in China.
Going forward, we believe our ability to deliver the most comprehensive package will allow us to attract more case, enabling us to create a stronger network effect.
Next it is about efficiency.
Energy amongst of is by far the leader within the industry in terms of efficiency.
Our power bank yield the highest revenue in any given the pivot.
Our profitability and our growth profile remained consistent.
Our revenue to employee headcount ratio leads the industry.
These achievements and attributes or due to our relentless pursuit of operational excellence.
Our enduring management philosophy here at <unk> is to drive both growth and profitability.
This requires us to always make improvements to our incentive and management system to ensure the delivery.
For all of Bd's and net what partners, we continue to refine the incentive scheme during the first quarter to make sure that we are able to continue expanding to <unk> that generate positive economics.
For the first quarter I have to mention that it is a low season for the business since many locations are closed.
And people intend to stay at home for gatherings during the months of Chinese new year.
On the other side during the quarter, we see strong recovery of revenue propel bank per day on year over year basis, as the impact of COVID-19 dwindled.
But on a quarter on quarter basis the.
Outbreak of COVID-19, and a number of regions such as Beijing Shanghai.
Good day, and also north eastern regions of China.
You bet.
So it will result in a decline in revenue in these areas and also the revenue per power Bank per day during January and February.
Despite the impact our operations normalized starting in March.
On the partial outbreaks were fully contained.
And the other parts of our efficiency comes from our long term commitment to invest in both software and hardware technology.
For software, we made improvements to our BD tools by implementing new features that further streamline the day to day operations of our employees to improve efficiency.
Allowing each BD to better manage more.
And more power banks with greater efficiency and quality.
In terms of hardware, we have identified additional areas to improve our cabinets and also the power of banks.
In both quality and cost.
We believe our continuous improvement of our operational efficiencies and technology will further differentiate and the monster from the other industry peers peers.
Lastly, I would love to touch upon new initiatives.
And it's amongst the has accumulated a massive online and offline network since our inception.
We have over 236 million unique richest.
This.
And 715000 locations across all provinces of China.
Combined these channels.
<unk> unique opportunity for us to leverage and to create new products and services.
We are already exploring consumer goods that I can't utilize our online and offline networks for distribution.
Also we are exploring other Iot industries that can leverage an EBIT extend our existing networks.
Going forward, we believe our current set of networks will give us a unique advantage in incubating new initiatives from energy amongst them and of creating a company that can truly energized everyday life for all aspects of life.
Overall, we delivered solid results for the first quarter of 2021.
Part of Q1 being a low season as well as the COVID-19 few having original outbreaks in January and February.
Our core advantages in market leadership industry, leading operational efficiency were recognized brand and reliable hardware and software technologies have allowed us to consistently achieve strong performance at the unparalleled unit economics within the industry.
We believe that we can continue expand.
Our existing advantages and to provide comprehensive solutions to more locations and the users.
Our long term commitment both growth and profitability will allow us to continue to expand our market share in chinas mobile device charging service industry and to deliver long term value for all of our shareholders.
Yes.
Now I would turn the call over to Maria <unk>, Our Chief Financial Officer for the financial highlights.
Yeah.
Yes.
Thank you Mark.
To deliver solid results for the fourth quarter of 2000 and taking the 1 lastly, we achieved strong revenue growth well continue to be profitable. Despite the impact of call. It at the systematically early 2021.
The recovering in March may expire to continually D day, where strong growth goal for the second quarter update for the year.
Now, let me walk you through the financial lease out on greater detail for.
For the fourth quarter of 2021.
Revenues were 800, and what is a quite in the mail weekly then will the hundred at 62 point of 5% year over year.
Increased.
Revenues from mobile device charging business of about 1.
Hundreds of S&P for quite flat.
816, 8 mini and the accounting for let's say what percentage of total rab growth for the quarter.
The increase was primarily on back of the impact of COVID-19 on fourth quarter of 2 types of turnkey and what how do you build it by the increase in numbers of appeal.
And of Apple for us part of that.
Revenues from pop out of South of 129, 2% to 20 of our metal and accounted for 3% of our total revenue for the quarter.
The increase was primarily on the back of the impact of COVID-19 on the fourth quarter of 2020, and the was contributed by the increase in the number of <unk>.
And of Admiral for youth part of that.
Other revenues were up 71 5 percentage.
2 5 for the 1 aiming at.
A copy of the for the aerial plus 6% of our total level. The increase was primarily on the back of the empower <unk> on the first quarter of 2020.
Cost of revenues were up by 14, 5% year on year 2 of 124 point of states. Many for the fourth quarter of 2000 and type of 1.
The increase of cost of revenues was primarily due to the increase in the tennis costs caused the pop back salt and the depreciation.
Gross profit was up 200, and the 37, 7%.
For 2 722 points of rate meaning.
For the fourth quarter of 2021, the increase was primarily due to the increase in revenue from mobile device charging business.
Operating expenses for the fourth quarter of 2021, or 600, and the 98% for billing.
103, 6% year on year, excluding share based compensation non-GAAP operating expenses of 600, and Nike from <unk> 3 million, representing a year of EBITDA increase of 100 of 4 8%.
Research and the development expenses for the fourth quarter of 2021 or 'twenty 6 needle.
After 24, 2% year on year the.
The increase was primarily due to the increase in personnel related expenses.
South on the marketing expenses for the first quarter of 2000 type of 1 or 600, and it's the clean 1 set of many 1 hundreds of 7 4%.
Yes, the <unk>.
The increase was the primary due to the increase in incentive fees paid to the location of pattern and Nigel of pattern from the increase in mobile device charging business revenues.
Yes.
General and administrative expenses or countries today for <unk> 8 million in the fourth quarter of 2021.
35, 9% year on year, the increase was primarily due to the increase in personnel related expenses and the third party for it.
Betsy.
Income from operations was $23 8 <unk> compared to a loss from operations of 100.
The type of $9 to many in the temporary loss of the year.
Operating margin for the fourth quarter of 2000 type of 1 or 2 8%.
Net loss of <unk>.
<unk> in the fourth quarter of 2021 compared to a net loss of 100 and the $37 5 million in the same period last year.
Net Margaret for the fourth quarter of 2021 or 1 8%.
Non-GAAP net of income, which excludes share based compensation expenses was $23 2 million in the fourth quarter of 2000 and types of 1 compared to a non-GAAP net loss of 131 1 million in the same period last year.
As of March.
The 31 2021 the cow.
The head of cash and cash equivalents restricted cash and a subpart of the investment of $2 2 billion.
Cash flow generated from operations for the fourth quarter of 2021, or the 100 and especially the 1 to me.
Capital expenditures for the fourth quarter of this year.
Hundred and the $38 million.
And of the Master credit <unk> expect to generate 900 and for the mailing to 900 and the save $70 million of revenue for the second quarter of 2021.
Please know that the forecasted with black for and it is most of the credit and the preliminary reveal the industry and its operations which is.
Subject to change.
Thank you for listening and we are now ready for your questions operator.
Okay.
Secondly.
The question and answer session of this conference call will start from the moment and no debt.
To be for oncology the wish to ask questions. We will take 1 question at the time from each caller. If you have more than 1 question. Please.
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Ask your question you will need to press star 1 on your telephone and wait for the name to be announced if you wish to cancel your request. Please press the pound or ex key star followed by 1 asked the question.
Yeah.
We have the first question net from the line of.
<unk> from Citigroup. Please go ahead.
Some could even the management thanks for taking my questions and congrats on the successful IPO. My question is related to the competition landscape. So resorts on news does some small players consolidate and other industry players to aim to go public to does management see any change in cash.
On competition landscape and on the current condition well management provide some color about the churn of revenue sharing with partners in fiscal 2021. Thank you.
Thanks for the question.
We do not see a significant change in competitive landscape.
During the first quarter.
Our core advantage in the network scale operational efficiency in the brand and technologies of steel leading the market.
And we will see that.
We are still gaining share with more of locations and cities on board.
We are confident that if we stick to the strategy that we drive both growth and profitability and focus on the customer satisfaction. So we can get more K as users in cities or in the network partners on board. So we are very confident.
So so far.
The conclusion of the is no major change in the dynamics.
Okay.
I for your question regarding the revenue sharing percentages.
So and there's if you ex <unk>.
Model for you said, you'll see that we pay to the location of having nurse.
So things are flat compared with the lack of quarter. So the incentive fee that true network partners increased slightly in the first quarter. This year due to the launch of and the net pardon the campaign to have op expense whether into the untapped larger cities.
But unfortunately, we do know Turkey with guidance on this of the percentage.
Yes.
Thank you.
Thank you. Thank you for your costs are going to have the.
The next.
Thank you.
We have the next question from the line of Lucy Li from Goldman Sachs. Please go ahead.
Hi, This is Luke from Goldman Thank you for taking my question.
My question is on <unk>.
On the the post COVID-19 impact to come on.
Can they share with us more details on the impact of COVID-19 during the first quarter and the possible impact going forward to the kind of quiet piece.
Thanks for the question.
In early 2021 on.
Of the resurgence of COVID-19 occurred in Beijing Shanghai.
And on the northeastern regions of China.
And if we look at the regions that were affected by the outbreak. The gross revenue of these regions in January and February of 2021 were actually down approximately 25% compared to December 2020 levels.
And the other regions.
Not happening in this way so in March of the COVID-19 has been content and we see a full recovery in terms of gross revenue for these regions.
Affected regions stayed flat during this major or minor outbreaks, meaning.
The the impact of COVID-19, our first quarter revenues would have been 8% to 10% higher even if we just.
Make it in a normalized situation the whole national revenue were up 8% to 10%, but unfortunately due to some of the minor opex some of the regions are down 25%.
And we hope that.
The.
The situation getting much much better than stable, but we do see that in the past weeks.
The province like.
We'll still have some minor outbreaks and the for example, the city of coffee.
Period were down about 5% to 10%, but I think it's just.
For a moment.
We will have experience to make the business recover even faster.
The outbreak itself so that will be the issue.
Production of the year.
The impact of the COVID-19.
Thank you can read most of the next question. Please.
Okay.
Okay.
Yes, we have.
The next question.
We have the next question from the line of Ryan <unk> from China Renaissance. Please go ahead.
Good morning, and for your questions. The first signs that give us more color on the new pure ice cover on this quarter.
The January call.
So it is.
How much of the Santa Barbara on through the direct model of Knight.
Thank you.
Yes, thanks for the question.
We actually expanded our <unk> coverage.
By more than 50000.
During the quarter. So the total number is increasing on both in higher tier cities and lower tier cities.
Due to we are having the.
The strategy to drive faster of the network partner model. So we witness the increase of revenue from the network partner model.
From about 30 or the way growth towards <unk>. So we see some of the great news happening there.
While we're still focusing on the operational excellence on no matter, where we go no matter how many locations more to add on we are still very confident to make it profitable at the time, we are entering this market on location.
Yes, just carrying that sort of just.
Thank you.
Thank you.
Once again, if you wish to ask the question. Please press star 1 on the kind of food and wait for the name.
To be announced.
Okay.
Once again, if you wish to ask a question. Please press star 1 on your telephone.
We are now approaching the end of the conference call I will now turn the call over to energy Monster as CFO.
For closing remarks, thank you.
Once again, thank you for joining US a day, please don't hesitate to contact us if for you how any further questions. Thank you for you on continuous of PA and the we look forward to speak of it the in the coming months. Thank you.
Thank you very much.
Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day. Thank you.