Q2 2021 Fangdd Network Group Ltd Earnings Call
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Great.
Ladies and gentlemen, thank you for squeezing boggy in.
Welcome to find P. D Network Group limited second quarter 2021 earnings Conference call.
All participants are in a listen only mode.
Management's prepared remarks, we will have a question and answer session.
Note that this event is being recorded I would now.
200 countries Louisville.
Speaker host today.
Linda Li the company's director of capital markets. Please go ahead.
Thank you operator, Hello, everyone and thank you for all joining us on today's call. The company has announced its second quarter I can give you a 'twenty one financial results today.
And our earnings release is now available on the company's IR website.
Today, you will hear from our close he only said he'd them, who will start the call with an overview of the current industry dynamics and the details of what the rest of that strategy in the quarter.
Afterwards, I'll say Apple meet the gallium Tom will go over our financials before we open up the harmful catclaw question.
Our men and management team will deliver remarks in Chinese and I will provide the English translation.
Before with convenience.
I'd like to refer you to our safe Harbor statement.
Our earnings press release, which applies to this call and we will be making forward looking statements.
But he also noted that we will discuss non-GAAP measures today, which are more softness mostly explained and reconciled to the most comparable comparable measures reported under the generally accepted accounting principles in our earnings release.
And the filings with SEC.
That I will now turn the call over to our coast E. C O. Mr. Zhang. Please go ahead Sir.
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The Taliban.
Okay.
I will do the translation Hello, everyone and welcome to our second quarter earnings call.
I would like to start the call high rate.
One of the challenges and opportunities, we upped up in the real estate market during the quarter.
Trust no shelf and Titan financing has some real estate companies to shortened our cash conversion cycle.
According to the National Bureau of Statistics, the total volume of real estate transactions in China increased by 17, 2% year over year to five four trillion RMB in the second quarter, our authentic and hear what.
Major cities in China have evolved.
Regulatory majerus to control of the property market and the tightened norms.
I read out.
The real estate market growth rates in the second quarter not Florida.
Dropping by 17 percentage points.
Christian secret shiny and new regulation for managing the concentration of real estate law was introduced.
<unk> continued to tighten our lending standards facing price drop four weeks out lacking a financing access and the maturing outstanding.
Yes.
There is an urgent need for Europe.
The company to accelerate South and show up in our cash conversion conversion cycle to maintain Stan.
Subsequent about cash flow.
Second real estate company in a long travel protest of kitchen organization with a focus on digital marketing.
Don't you declining markets.
The company has begun focusing more attention on the digitalization.
Yeah.
With so many business areas and use cases to configure a breakthrough crafts very lofty and long term transformation companies moved too fast forecast efforts to maximize.
They average out a short term because of the digital marketing directly direct contribution to south performance.
It has become the first area a fall of forecasts for many real estate companies.
According to say I see a path.
The top 15 real estate companies had already started using their own seeking help marketing platform.
Our printed contained well got to kill off the companies who are using this platform in 2018.
Sorry, the era of exactly computation on real estate.
Vaccine platform, it's gradually passing.
As you can see is becoming the training of the next phase of the back of it.
The computation traveling.
The competitive suggestive of increasing commissions and allowing grass profit, it's becoming a less effective due to the tattoos regulations.
As that market entrants into a phase of staffing the.
The bathroom that.
Platform technology called capabilities and observational.
I guess is it really kind of the key too complicated mix.
We adhere to the National regulation principle that housing is for leading notes for speculation.
They paid their relevant policies will have come out healthy and stable development of the real estate market in the long run.
In response to the policy changes in the real estate industry, and finally digitalization trend, we have renewed our nation to improve real estate transaction efficiency and their family the user experience.
We have a new mission vision, it's two itself.
Just about it.
Parties meetings or real estate agencies, and it tastes amazing family Chick Fil, a chip trillions of transactions and it would become the trusted real estate.
Platform for our customers.
[noise] during the corner raise remained.
Committed to our growth strategy strategies and continue to focus on the development of our platform and the three core businesses.
They continue to develop our business fundamentals and the improved gross margin.
Avoiding the computation so subsea base.
Total class G M B facilitated I'll walk platform was $29.6 billion RMB.
In the second quarter of 'twenty one.
Our revenue growth by 37, 9% to 401 point for meeting on beef and a girl.
Gross margin improved by.
So two six percentage points to FID.
15.6% on the quarter over quarter basis.
They continue to make progress on the development of our capacity to provide the agency person open independent and the technology, but technology enabled platform.
With our Tau crop kicks out a P C at corn.
We continue to focus on developing new video content and collaborations basically I mean mainstream media platform to optimize agent operations management and the marketing tools.
Improve agent efficiency and the strength of our thickness for our platform.
In the second quarter revenue, but the number of active agents on our platform right.
250000, representing a quarter of a call for an increase of 13%.
Yes, I like to discuss our three primary business lines.
You probably picked out our further increased the number of property listings on our platform.
And the improved overall profitability.
During the call her rate improve the overall quality of our listing properties, while continue to grow our scale leveraging.
Our parking space pass project.
California about and I talked about the quality and protium products for lifting and other real estate of transfection solution protects.
We further expanded our collaboration with PREPA case, you're welcome it thereafter.
And we improved our gross margin.
While we continue to fail to our cooperation with key agents and we partner with that best optimize my team.
Alphaville Alphaville down and efficiency is a second Carter I'll close to look at new property transaction, Jeffrey increased 15.7% to $18.9 billion RMB from 16 four.
16 point for Fannie arm B in the first quarter 'twenty to 'twenty one.
The number of new property project on our platform reached 1940 Act.
Distribution revenue increased by 32, 1% to 305 and 58.8, mainly R&D.
On a quarter to quarter and visits.
So I'll, probably get caught a cloud SaaS solutions, we are witnessing.
<unk> success from our pilot project with King the Biocryst, and we refined and upgrade our systems.
They were in the quarter, we established a bearish tours.
Oh, the agencies marketing champion and digital media channels to help the bathroom strengthen their ability.
To launch projects doing their own channels.
With the launch of agents Vouchering.
If I can build a real time dynamics of the US dollar stone and connecting with the key contact.
Allowing us to further improve efficiency for new business launches and agency assignments protest process.
Furthermore, we have expanded the scope of the management.
Board and amongst I am Ultimate Smart question and answer function.
Improving the efficiency and the user experience.
In terms of pilot projects, we selected a bench project and the Florida and the further a benchmark project and a further enhance their efficiencies through digital marketing channels.
For example, one of our project collaboration with China Real way.
Real estate group called <unk> Corporation limited completes the 15th floor transactions in June well, where our protect collaboration with C and B Real estate Corporation limited completed 78 transactions during its opening cell.
As a result.
News from our SAP solutions in the second quarter was 223 remaining RMB.
Our risked out peptide business maintained its steady.
During the quarter GAAP.
The uncertainty in the macro environment, we continue to leverage our innovative business model to assist our growth in revenue and gross profit.
In the second call her.
Our Cook Newcrest shall Crepitate transaction G. M. B reached pen one 6 billion RMB.
Revenues from her it's out public transactions crashed by Honda 114, 4% sequentially to aren't until 40, plus three meaning RMB.
Lastly, please allow me to share an update on our current outlook and expectations.
Going forward, we will continue to leverage our platform to better facilitate transactions without sacrificing our margins by improving our self computation on subsidies.
Weibo's MAU collaboration.
They are real estate goodbye oppressed and agencies.
Expand our geographic coverage and.
Our benchmark projects through our proactive cloud SaaS solutions.
Business.
Right Okay.
The government will continue even pinching novation and a tech knowledge technology enable the franchisee system and how to service business model.
Due to the impact of COVID-19, I'm certain coal market and the rates out it I'm sure. It has in the coffee business performance.
Near term.
Cognex back its revenue to be between two.
216 to have about 15 made it rather be choose 300 remaining RMB.
So called her off 2021.
This forecast only reflects the companys current friend Limitary reviews, where it was.
On the market and operational conditions, which are subject to change.
With that I will turn the call over to our CFO, Mr. Gelling path to reveal this quarters financial results.
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Oh, let me do the translation that you see now I will provide a closer look I won't go Nashville resolve all the second quarter of temporary.
Before I start please note that old members.
RMB terms.
And that all comparisons are made.
Sequential basis, unless otherwise noted.
Revenue in the second quarter of 'twenty or 'twenty, one increased by 37, 9%.
Two full Hamdard 1.4, maybe from 219, what maybe in the first quarter of 2021.
During the second quarter, we continued to optimize revenue mix and then prioritize new revenue generation from why don't add it services and a new business initiative.
This includes our SAP solutions for various platform participants.
As we continue our efforts to establish a five hour future revenue streams.
Now let me take a look at our revenue breakdown for the second quarter of 2021.
That's revenue from new provocation section services increased by 32, 1% to 300 and it.
58 is mainly in the second quarter of 2021 from 271.6 million in the first quarter.
Mike.
Traveling due to a 15, 7% increase in G. M B from new property transactions to 18.9, better in the second quarter of 2021 from.
16.4, 30 in the first quarter of 2021.
Net revenue from our rest out preparatory transaction services increased by.
114, 4% to 43.
Three mainly in the second quarter or it can get you. The walk from 18.8, mainly in the first cohort of twin takes into one.
Parameter IPO to a revenue contribution from our comprehensive real estate service platform.
Our financial business model.
The home renovation service platform to help you.
This growth was achieved.
There's different and the 21, plus 7% Chris E. G M week, four where south Crepitation section 210.6 bearing in the second quarter I can think of when they went from 13 point fixed bearing in the first quarter of 'twenty two when they want them.
The decline in Jan I believe was mainly due to the change of fee structures.
Sal perpetually schemes.
Revenue from SaaS solutions increased by 216.
824% to two three or maybe in the second quarter of 'twenty one from.
Europe 0.6 made it in the first quarter of 'twenty could be one.
The increase was primarily.
Could be ocean.
Bill spoke to Chris in a number of projects.
Cost of revenue in the second quarter tended to be one in crashed fast 31, 5% to 338, nine maybe I'm too.
257.7, many in the first call her up significantly well.
This increase was due to two factors.
Yeah.
Hi Commission fees were paid to agents.
Are they surrendered wage.
I'll kick from increasing transaction commissions.
Second.
There was an increase in costs related to where we have.
Average service and solution.
Oh first to market place user during the second quarter opportunity because they want to diversify our future revenue stream.
Gross profit in the second quarter of predicting Q1 increased by 86 up one 5% to 52 points, maybe from 333.3, mainly in the first quarter of 'twenty one.
Gross margin in the second quarter of 2021 in Christ 215, plus 6% from 11.44.
4%.
In the first quarter of two patients.
Operating expenses in the second quarter opportunities can do while increased by 46, 2% to 205.1 meetings from 141 three.
Meetings in the first quarter of 210 to one.
This included share based compensation expenses.
Expenses.
11.21.
Netting the 11th one night, mainly in the second quarter.
And the first quarter our country. It tells you what prospectively.
Now, let's take a look at the breakdown of operating expenses for the second quarter in 2020 one.
Sales and marketing expenses in the second quarter, a 10 day to day, one decreased to 13 point what made them from their tastes 7.9 meeting in the first quarter of 2021.
This decrease was primarily due to adjustments we've made to the personnel called preservation of our users are South department.
This allowed us to reduce the spending on market activities related to new appropriate patients section services.
In order to focus more on our new set solution and other value added services.
Perfect development expenses in the second quarter of 'twenty can do but well stick to.
4.5, Manning compared to 37 point, maybe plus three mainly in the first quarter our convention.
This increase was actually a trick or treat beautiful to the increase in personnel.
Related expenses supporting the company's decision to focus more on the research and development of it by the average service and SaaS solutions.
General and administrative expenses in the second quarter of 2021.
Hindered convinced that unqualified meaning.
<unk> choose to pick five 2 million in the first quarter of 2020 one.
This increase was mainly due to the increase in provision of allowance for doubtful accounts.
Accounts receivable from some feedback Chris Oh, 17, nine points what made it in the second quarter from 20 made it in the first quarter.
Some of the bad press.
Encountered lightened the financial conditions in the quarter.
Net loss was a 139 main he was back on the call dropped into 'twenty, one compared to our Honduras and 4.8 made it in the quarter.
For 2020 one.
The net loss was narrowed to 259.9 million in the second quarter of 2021.
84.8 weighted in the first quarter of 'twenty, one if we take the prevention of allow allowance for doubtful accounts in fact.
All of these considerations.
Non-GAAP net loss was 127.9, maybe compared to non-GAAP net loss of 19 three made it in the first quarter of 2021.
Non-GAAP net loss would it be narrowed to 448 point, it's mainly in the second quarter of Tianjin cause one from 70.217.
Two points, mainly in the first quarter 'twenty, one if we take the provision allowance from about $4 for a comp effect out of consideration.
Basic and diluted net loss per ads in the second cultural tended to do quite well both 164 in comparison basic and diluted net loss for it yet.
The first quarter of 'twenty do they can do what what both one some can do seven.
Each itchy eyes. They guess represents 25 of the company's class a ordinary shares.
As of June starting 'twenty or 'twenty, one the company had cash cash equivalents restricted cash and short term investments.
Of course.
749.4 meeting short.
Sure I'll come back for Bari upwards three sorry.
219.7 meeting.
And and utilize the facts as I said it hit of 379.5 meeting.
For the SEC caught her a 2021 math cash yielding.
Oh preaching activities was the 15th Street meeting.
This concludes our prepared remarks for today.
We are now ready to take questions.
Ladies and gentlemen.
Question and answer session, if you wish to offer Richard.
Red Star one on your telephone keypad envied for your name to be announced.
Our income stream.
And he asked one question per person.
Once again it is star one block for sure.
Do you have a question coming from the mine.
Thompson from Zacks investment. Please go ahead.
Okay.
Good evening.
Yeah.
Hi. This is okay. This is gonna be harvest.
It's gonna be hard with just one question, though.
Hum.
Thank my probably my biggest question with you.
Took a very large bad debt.
Or this quarter and so far this year, you're already almost double what you took last year could you go into more detail as to what the problem is did you have a couple of developers go bankrupt.
Any chance of collecting any of that money just describe the situation and then what you expect.
In the next couple of quarters are you going to keep taking higher reserves.
Yes.
Okay, Let me translate to the car transit to the Ah trial in Europe.
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The opportunity to do so.
What are you trying to show you the way you do.
Yes.
Okay, Let me translate the answer.
It's right for the developer to go bankrupt.
Now the reason for the decline in the scale of income if that's tragedy, we have changed our strategy through notes, making subsidies.
To pay more attention to grow gross profit decades, the carbon strategy changes.
Also effected by the market.
The rest of the market without COVID-19.
The influence in the rates and terms.
Under the Apple Chamberlain checked.
Active trading has also be impact either the regulation. So maybe that you would be influenced our oh revenue. So this is the thing that gets to the market are reasons, such a niche and nothing to do with the fact that we're supposed to bypass.
So is there any hope of collecting any of that.
Hi, there could you repeat your question I think let's hear you clearly.
Is there any hope that you can collect some of that.
Debt.
Oh Island.
Soccer game, if theyre not bankrupt.
Yeah.
Yeah.
Okay I will translate the question to the managers have Tullow and Houston Shaw.
Can you just touch on email for China women do inflation, when you talk about Asia to Europe, where there's real jump out.
Oh I'm sure the appraisal use of Domo.
With him.
Hudson.
Yeah.
When we do the.
They are really really good about them.
So I see it come.
Toyota cigar, Jim, but you should have pretty good.
Jim.
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Okay. That's interesting is the question.
There's something called a Congress favorable is normal right now and then there is no cut dividend, okay for us to receive our accounts receivable.
Because it's they laugh ourselves the most of the basic operations the commission payments actually shape right now.
But if we got some there right.
Is it the bad press has some risks or maybe the background that we gave a closed loop and all the information.
So we're real good deals corporation, which is kind of a real estate developers.
Okay. Thank you.
Can I ask another question on a restricted to one.
I, probably would prefer to have one question from each participant so Lisa if you have more questions. Maybe we can arrange a backup call they hurt.
Thank you.
Thank you Lisa.
Okay.
Yeah.
Once again, ladies and gentlemen, followed by one to ask a question.
Yeah.
You do not have any further questions at this moment I would like to hand, the conference back to our host for any ending remarks.
Yeah.
Okay.
Yeah.
Thank you.
Ladies and gentlemen that concludes our conference call for today. Thank you all for your participation you may disconnect now.
[noise].
[music].
[music].
Ladies and gentlemen, thank you for standing by and welcome to final P. D Network Group Limited second quarter 2021 earnings Conference call.
This time all participants are in endocrinology MAU after the management's prepared remarks, and we didn't have a question and answer session.
Nope.
Is being recorded I would now.
I'd like to hand, the country's Louisville speaker host today Ms. Linda.
Linda Li the company's director of capital markets. Please go after Europe.
Thank you operator, Hello, everyone and thank you for all joining us on today's call. The company has allowed us to exactly call. Dr. Can do beyond 'twenty, one financial results today.
Our earnings release is now available on the Companys IR.
Site today.
Today, you will hear from our co CEO, Mr. <unk> Dong, who will start the call with Oh, a real up the current industry dynamics and the details of our debacle that strategy in the quarter.
Afterwards, our CFO Mr. Yano income will go over our financials before we open up the call for Cat four questions.
Our management team and management team will deliver your remarks in Chinese and I will provide the English translation.
Before we continue I would like to refer you to our safe Harbor statement in our earnings press release, which applies to this call as we will be making forward looking statements.
But he also noted that we will discuss non-GAAP measures today, which are more soft with snowflake explained and reconciled to the most comparable GAAP comparable measures reported under the generally accepted accounting principles in our earnings release.
And our filings with the SEC.
That I will now turn the call I'll walk through our KOL E. C O. Mr. Qi Dong. Please go ahead Sir.
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Oh go ahead.
I will do the translation.
Hello, everyone and welcome to our second quarter and Jacob why R&D costs.
I would like to start the call higher revenue in some.
All the changes and the opportunities we upped up in the real estate market during the quarter, but no shelf and patent financing has focused real estate company to shorten our cash conversion cycle.
According to the National Bureau of Statistics, the total volume of real estate transactions in China increased by 17.
2% year over year to five four trillion RMB in the second quarter up 21.
Major cities in China have you rolled out regulatory Madras should control of the property market and the tightened launch as a result.
It market growth rates in the second quarter slowdown.
Dropping by 17.
Vantage point.
Chris Schott secret Johnny.
New regulation for managing the concentration of real estate law was introduced.
<unk> continue to tighten our lending standards facing price drop four weeks out lacking or financing access and the maturing outstanding.
Yes.
There is an urgent need for Europe.
The company to accelerate south and sharpen our cash commercial collection cycle to maintain.
Subsequent about cash flow.
Second real estate company in a long term protests get utilization with a focus on digital marketing.
Due to declining margins.
Real estate companies has began focusing more attention on that.
Digitalization.
The opportunistic.
But so many business areas and use cases to configure.
Oh breakthrough crafts, very lofty and long term transformation.
Need to flat forecast.
To maximize.
They are it's out a short term because of the digital marketing directly direct contribution to its outperformance.
It has become the first area for our forecast for many real estate companies.
According to C O S T data.
The top 15 real estate companies has already started using the Oh, if he can help marketing platform.
On the 20th contained about just the cost of the companies who are using this platform in 2018.
Sir the era of reckless computation on real estate.
Transaction platform, it's gradually passing.
And efficiency is becoming their trend of the next phase of development.
The competition strategy.
Doug Doug competitive suggestive of increasing commissions and allowing direct profit, it's becoming a less effective.
Kathryn regulations.
And that market entrants into a phase of staffing the bathroom that's.
Our platform technology called capabilities and observational.
This is it will become the key too complicated mix.
We adhere to the National regulation principle that housing is for leaving in notebooks speculation.
Paved the relevant policies will help promote healthy and stable development of the real estate market in the long run.
In response to the policy changes in the real estate industry and Fitch Friday digitalization trend, we have renewed our mission to improve real estate transaction efficiency.
The foundry reviews experience waiver.
Laser anneal mission vision is to itself.
Hundreds of thousands or properties mailings or real estate agencies, and the 10th Amazing family Chick Fil, a chip trillions of transactions and it become the trusted real estate platform for our customers.
During the quarter raise remained committed to our growth strategy strategies and continue to focus on the development of our platform and the three core businesses.
We continue to develop our business fundamentals and improved gross margin.
Avoiding the computation so subsea base.
Total clubs adult GMP facilitated our platform was 29.6 fading RMB.
In the second quarter of complete from day one.
Our revenue growth by 37, 9% to 400, a 1.4 meeting on beef and a girl.
<unk> margin improved by.
Two six percentage points to FID.
15.6% on the quarter over quarter basis.
They continue to make progress on the development of our capacity to provide agency spreads are now open independent and the technology both in technology enabled platform.
With our door to us properties out a P C and corn.
We continue to focus on developing you redo continent, and deeper collaborations with your midstream media platforms to optimize agent operations management and marketing tools.
Improve agent efficiency and the strength of our thickness for our platform.
In the second quarter than you, but the number of active agents on our platform right.
Roughly <unk> thousand representing a quarter of a call hanging Chris.
13%.
Next I'd like to discuss our three primary fitness life.
For your profit takes out all further increased the number of property listings on our platform.
And the improved overall profitability.
During the call her rate improved the overall quality of our listing properties while continue to grow.
Our scale leveraging <unk>.
Our parking space pass project.
California and.
I talked about the quality improving product for lifting and other real estate transactions TV production.
We further expanded our collaboration with propagate they welcome it thereafter developers and improved our gross margins.
Meanwhile, we continue to fail, our cooperation with key agents underway patent under which that best optimize my Chi.
Alphaville Alphaville dong and efficiency in the second quarter, our close Dubuque, New property transaction Jeffrey increased 15, 7% to $18.9 billion RMB from 16 point for epic.
16 point fault trading arm b in the first quarter 2021.
The number of new property project on our platform reached 1950 <unk>.
Distribution revenue increased by 32, 1% to 305.58.
Maybe R&D.
Quadro Quadro fishes.
For a property called cloud SaaS solution, we are witnessing.
Early success from our pilot project with King the Biocryst, and we refine and upgrade our systems.
They were in the quarter, we established a bearish choice.
Oh, the agencies marketing champions and digital media channels to help your bathroom strengthen their ability to launch project during the Oh channels with.
With the launch of agents 1000 people.
Pascal deal with a real time dynamics of the ask docs stone and connecting with our key contacts.
Allowing us to further improve the efficiency for new business launches and agency assignment processing process.
Furthermore, we have expanded the scope of the management.
Board and alone I am Ultimate Smart question and answer function.
Improving the efficiency and the user experience.
In terms of Paddock project, we selected a bench project and the Florida and the further a benchmark project and a further enhance their efficiencies through digital marketing channels.
For example, while our project collaboration with China Real way.
Real estate Group Corporation Limited company, it's the 15th floor transactions in June well, where our project collaboration with C and B Real estate Corporation limited completed 78 transactions during its opening shell.
As a result.
The news from our SaaS solutions in the check in the quarter was 223 remaining RMB.
Our retail propane business maintained its steady.
During the quarter GAAP.
I'm sure Tim in the macro environment, we continue to leverage our innovative business model to assist our growth in <unk>.
Revenue and gross profit.
In the second car.
Our Cook Newcrest, South property transaction G. M. B reached <unk>, one 6 billion RMB.
Revenues from rich out public transaction to eat crashed by Honduras, Honduras, 14.4% sequentially to a dual 40, plus three maybe RMB.
Lastly, please allow me to share and update our current outlook and expectations.
Going forward, we will continue to leverage our platform to better facilitate transactions without sacrificing our margins by improving our selves computation on subsidies.
Weibo's MAU collaboration.
If that's the right approach and agencies.
Expand our geographic coverage and the wealth of our benchmark projects. So I what prompted cloud SaaS solutions.
Business under our free I'll say steady development will continue in Quincy innovation and technology, but technology enabled our franchisees just hum and King how to service business model.
Due to the impact of COVID-19 on certain core markets.
And the Reits out there.
They're kind of in the concrete business performance.
In the near term.
The company expects its revenue to be between two.
216 to have about 15, maybe Bryan B choose 300 remaining RMB.
So called her up 2021.
This forecast only reflects the companys current clip friend immaterial reviews, where it was.
On the market and operational conditions, which are subject to change.
With that I will turn the call over to our CFO, Mr. Gelling path to reveal what is called her financial results.
It runs off.
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Oh, let me do the translation. Thank you now I will provide a closed loop and our financial results, while the second quarter of <unk>.
Before I start please not that all numbers are in RMB terms.
And all comparisons are made.
Sequential basis.
Unless otherwise noted.
Revenue in the second quarter of 2021 increased by 37.9% to 401 for meetings from 219, what maybe in the first quarter of 'twenty or 'twenty one.
During the second quarter, we continued to optimize revenue mix and they're prioritized new revenue generation from wider added services and new business initiatives.
This includes our SaaS solutions for various platform participants as we continue our efforts to establish a five hour future revenue streams.
Now let me take a look at our revenue breakdown for the second quarter of 2021.
Net revenue from new properties transaction services increased by 32, 1% to 300.
58, eight is mainly in the second culture of 'twenty or 'twenty one.
271, 6 million in the first quarter.
Travel is due to a 15, 7% increase in G N V from new property transactions.
$18.9 billion in the second quarter of 2021 rub 16 crunch for bidding in the first quarter of 2021.
Net revenue from our rest out preparatory transaction services increased by 114, 4% to 40.
Three maybe in the second quarter or it can get you. The walk from 18 eight mainly in the first cohort of 10 patients here.
Primarily due to a revenue contribution from our comprehensive real estate service platform.
Our Penn National business model and the home renovation service platform to help you.
This growth was achieved.
There's different and twin pay one plus 7% decrease in GM wheat for Red cell publication section 210, six bearing in the second car drop can take when they went from 13.6 bearing in the first quarter of 2021.
The decline in Jan I believe was mainly due to the change of fee structures.
Risks out preparatory these teams.
Okay.
Revenue from SaaS solutions increased by 216.
824% to two three or maybe in the second quarter of compared to the one from.
Europe 26 made it in the first quarter ultra engine could be one.
The increase was primarily attribution.
Beautiful to Chris in a number of projects.
Cost of revenue in the second quarter tended to be one you Chris first 31, 5% to 338 nine maybe from 257.7, many in the first quarter I will turn to compete well.
This increase was due to two factors.
Yes.
Hi Commission fees were paid to agents for Sylvia surrendered wage drifts out it from increasing transaction commissions.
Second.
Yeah.
Increase in costs related to where we are and why do I.
Average surveys and such resolution.
Offered to marketplace user during the second quarter opportunity, if you want to diversify our future revenue stream.
Gross profit in the second quarter of 221 increased by 87.
5% to 52 points, maybe from 333.3, mainly in the first quarter of 'twenty to be won.
Gross margin in the second quarter of 2021 increased to 15, 6% from 11, 4%.
In the worst quarter of patrons or what.
Operating expenses in the second quarter of 'twenty or 'twenty, one increased by 46, 2% to 205.1 meetings from 143.
Meetings in the first quarter ultra drilled into lab.
This included share based compensation expense expenses.
Allowing one netting and 11 nine made it in the second quarter.
And the first quarter our country. It tells you what respectively.
Sure.
Now, let's take a look at the breakdown of operating expenses for the second quarter in 'twenty or 'twenty one.
Sales and marketing expenses in the second quarter of 2021 decreased to 13.1 meeting from 37.9.
<unk> made it in the first quarter of 2021.
This decrease was primarily due to adjustments we made to the personnel cost.
Presentation of our users are South department.
This allowed us to reveal the spending our market activities related to new appropriate patients section services.
In order to focus more on our new <unk> solution and other value added services.
Perfect development expenses in the second quarter of 2021 what dictates.
For five <unk> compared to 37 point, maybe plus three mainly in the first quarter or conditions.
This increase was actually a trick or treat beautiful to the increase in personnel.
Related expenses following the company's decision to focus more on the research and development of value added services and SaaS solutions.
General and administrative expenses in the second quarter of 2021, well hindered convinced that unqualified, meaning compared to $65.2 million in the first quarter of 2021.
This increase was mainly due to the increase in provision or allowance for doubtful accounts.
Counts receivable.
From some of the bankrupt Oh 17 nine points what made it in the second quarter from 20 made it in the first quarter.
And some of the better price.
Encountered lightened the financial conditions in the quarter.
Not close was a 139 main he was back on the call dropped significantly while compared to our Honduras asphalt eight made it in the culture.
Cindy Wang.
The net loss was narrowed to chew 15, nine nine mainly in the second quarter of 2021.
18th for eight.
Eight more even in the first quarter of 2021 if we take the prevention of allow allowance for doubtful account effect out of consideration.
Non-GAAP net loss was 127.9, maybe compared to non-GAAP net loss of 19 three made it in the first quarter of 2021.
The non-GAAP net loss would it be narrowed to 448 point, it's mainly in the second quarter of 2021 from 70 to 70.
Two points, mainly in the first quarter 'twenty, one if we take the provision allowance from about a full doubtful accounts effects out of consideration.
Basic and diluted net loss per ads in the second cultural conviction do but well both 164 in comparison basic and diluted net loss for it yet.
First quarter I'm trying to do they can do what what both 127.
Each represents 25 of the company's class a ordinary shares.
As of June 30.
2021, the company had cash cash equivalents restricted cash and short term investments.
Oh for <unk>.
749 point small meetings.
Short term basketball boring upwards three sorry.
219.7 meeting.
And and utilize the back facilities of 379.5 meeting.
For the second quarter of 2021 net cash yielding.
Operating activities was the 15th Street meeting.
This concludes our prepared remarks for today operator, we are now ready to take questions.
Ladies and gentlemen, you can now begin the question and answer session. If you wish to ask a question.
Red Star one on your telephone keypad and beat for your name to be announced.
You can find constrained breakthrough declines you asked one question.
Once again, you just started one dwarf your question.
Do you have a question coming from the line of diesel.
From Zacks investment. Please go ahead.
Okay.
Good evening.
Yeah, Hi.
Hi, Lisa Okay. This is gonna be harvest.
It's gonna be hard with just one question, though.
No.
I think my probably my biggest question would be you took a very large bad debt.
Reserve this quarter and so far this year, you're already almost double what you took last year could you go into more detail as to what's the problem is did you have a couple of developers go bankrupt.
Any chance of collecting any of that money. Just described the situation and then what you expect in the next couple of quarters are you going to keep taking care of them.
Okay, let me translate to the top trends to the Ah trial in Europe.
Cutback everyones interest.
One of them said that though if you go through almost the truth.
Well hear from income from them.
Okay.
Thank you.
Okay.
Or something like that.
Yeah.
Okay a woman.
Sure the covenant of four times.
So good.
Well, there's a little bit more shutdown.
She answers rather unusual egencia will mature.
So which is changing.
Tianjin children.
I will now turn to.
And as you.
Well I would even go into soft tissue.
We're gonna congestion, which will.
Primo constitute tourism.
Yeah, especially those who sort of singles to Tom.
Please.
So these machines opportunity Michelle only trying to show you that we do.
Okay, Let me translate author.
It's right for the developer to go bankrupt.
The reason for the decline in the scale of income if the tragedy, we have changed our strategy to note making subsidies.
Pay more attention to grow gross profit decades, the carbon strategy changes.
And also effected.
In fact, he decided the market.
The rest of the market that the COVID-19.
Influence in the rates and terms.
The Apple Chamberlain Church.
Active trading has also be impacted by the the regulation, so maybe that you'll be influenced our.
Revenue. So this is the thing that gets to the market you are reasons, such as MIT and nothing to do with the bankruptcy. It was supposed to bypass.
So is there any hope of collecting any of that.
Hi, there could you repeat your question I think I hear you clearly.
Is there any hope that you can collect some of that bad debt.
Allowance.
Hockey game, if theyre not bankrupt.
Yeah.
Okay I will translate the question to the managers have Halloween's Houston Shaw.
Could you just touch on E Mail for China woman doing social you don't talk about Asia, Toyota with a short shutdown.
Well Mr. The official usually don't go Hudson.
Uh huh.
With him.
Thompson.
Yeah.
When we do that.
I realize you would go about them.
She also has unique.
Toyota C G.
Jesus between shooter frequently.
G C.
Yeah.
So wondering twofold from you what Michelle I'm sure.
I always an interest in a woman.
So do you she is younger.
So don't feel it's hard to cover so which room.
Please.
Uh huh.
Sure sure.
Okay, Let me translate the question.
Something of a.
Our Congress Sealable no more right now and then there is no cap it to inculcate for us to receive our accounts receivable.
Because if they laugh ourselves most of basic operations the commission payments actually see it right now.
If we got some real.
Is it the bad press has some risks or maybe the background that we gave a closed loop analyst all your information.
Good deals corporation with Caterpillar.
Real estate developers.
Okay. Thank you.
Can I ask another question on a restricted to one.
I, probably would prefer to have one question from each participant so Lisa if you have more questions. Maybe we can arrange a call later.
Thank you.
Thank you Lisa.
Okay.
Oh.
Once again, ladies and gentlemen, followed by one to ask a question.
Yeah.
You do not have any further questions at this moment I would like to turn the conference back to our host for any ending remarks.
Okay.
Thank you.
Ladies and gentlemen that concludes our conference call for today. Thank you all for your participation you may disconnect now.