Q2 2022 Quhuo Ltd Earnings Call
Okay.
Okay.
Okay.
[music].
Ladies and gentlemen, thank.
Thank you for standing by and welcome to Q shows first half year of 2022's earnings Conference call.
At this time, all participants are in listen only mode.
After managements prepared remarks, there will be a Q&A session.
Today's conference call is being recorded.
If you have any objections you may disconnect at this time.
I would now like to turn the call over to MS. Sheila Thank you and over to you.
Thank you operator.
Hello, everyone and welcome to <unk> first half year of 2020 Two's, earning conference call. The company's results were released earlier today and are available on our IR website on the call today are chairman and CEO Lastly, Schaffel battery box, that's Leesville review business operations and the company.
Highlights followed by Barry <unk>, who will discuss financials and guidance they will.
I'll be available to answer your pet shop, Indo Q&A session that follows.
Before we begin I would like to remind you that this call may contain forward looking statements made under safe Harbor provision of the private Security Litigation Reform Act of 1995.
Such statements are based on management's current expectations and current market and operating conditions and relate to the events that involve known or unknown risks uncertainties and other factors all of which are difficult to predict and many of which are beyond the company's control.
Which may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.
Further information regarding this and other risks uncertainties and factors is included in the company's filings with the U S Securities and Exchange Commission. The company does not undertake any obligation to update any forward looking statements as a result of new information future events.
Otherwise, except as required under law.
With that I will now turn the call over our chairman and CEO Mr. Leslie <unk>. Please go ahead.
Thank you.
Thank you all for joining our foods to hustle.
Earnings Conference call.
We are very pleased with that.
First half of 2022, she will have continued as.
Revenue rose foot and the policy to close later in 2000, you can do it well.
Total revenue growth February the first half of the year gross profit increased by 896% year on year.
The increase in revenue came from the increase of demand or community products and the expansion of the coverage of <unk>.
And that gives me peace kicks in.
In terms of gross profit thanks to the improvement of the company's operating efficiency under the strengthening of the cost of control. We further reduced the cost of revenue and achieved an increase in gross profit margin.
The gross margin in the first half of 2020 tool was five point that compared it to two 7% in the same period last year at the same time general and administrative expenses decreased by 22, 8% year on year.
Our adjusted EBITDA was RMB 10, 8 million compared with a loss of RMB 14, $9 4 million last year, which just shows that our profitability has improved significantly.
At the same time, we have been endeavoring to really deal with the dependency on individuals isn't a fly on the major consumers.
The basis of a solid foundation on commodity Liberty solutions, our community. So excuse me has placed into a higher growth each.
In terms of the magnitude of revenue mobility services solution increased by 32, 2% year on year.
On the housekeeping and accommodation solution increased by 10 peso upon its further.
Year on year.
Now I would like to show is the fifth Gray Hall, we have provided a continuously high quality services, Ireland has afforded thanks for leading needs of food clothing housing transportation for the community in the first half of 2022, either although the comprises international situation.
And the domestic epidemic control.
Well the first half of 2022, the dynamic of zero policy. It prevents people from traveling Frida, which led to an increase in the demand for home services.
Our business covers the majority of the areas with strong economic or demand first and the second a TSA tasting, China, providing services that meet the basic needs of the community.
Nation to the continuous development until by by existing and new sectors, such as on demand delivery solutions morbidity service solutions housekeeping and accommodation solution. It also includes our pioneering exploration in foundry services.
In terms of auto for a few minutes service platforms, such as with me Todd.
<unk> et cetera, including home demanded delivery solution and the mobility services solutions get all we have two wars call competitiveness and the motive through lean management operations and a national why they moved from a structure of network.
In terms of the operation of our own so it's paid off including housekeeping and accommodation solutions and the laundry and trial, we plan to empower mall community service providers to expand the revenue and the improving efficiency through the fastest and the services.
Yeah.
Let's take a look at how to enable the mall community service providers to expand at the IGN com and improving.
So it was a softer kind of subsidies.
In the process of providing community services for a long time that he found that as a market participant so community so to see a very fragmented under the city's capacities eliminate sizable demand under capacity open community. So she is not putting matched annuities did cordon Gladship cross regional deployment.
They meet the needs of consumers.
In order to solve the problems, we have begun testing and implementing a community ecosystem based on 10 years of community service experience.
Soft tours to link communication service provider under production capacities since the second half of 2021.
Nowadays, we are taking the language solutions business entry into a community service.
The effective tax rate and I'll, just take the distributions and the communities the owner.
Peter by our laundry audio Socs management system on the community residents are you involved in our community service platform through community stockholders for instance, community shop owners, a wild place coastal grocery stores Korea deliberate pause or gene could ahead of our ability to meet lessen.
Ludwig.
It was around delayed tax rates were involved in our system.
They have de novo the codes to the land to the factory floor.
Thank you everybody system all of the services platform after receiving the longer they need with some consumers.
We are cooperating with them all of them 70 laundry essentially.
You will see a little bit.
And shooting trial operation results in Beijing.
Yeah.
In the future we are John Kimco, most of our communities fairly equal.
Ecosystem with our own team and our franchise partners to align all the hold a 130 50 and the 1200 excuse me district across the country, which were hardwood advisory. Please consider these network people and empowering existing community service providers buy stocks top cities.
To link in to match the needs of meaningful family you will communicate more precisely so there was a way of stacking mouthful services low side to expand the E com and the capacity she already to improve efficiencies.
We will concentrate enriched studies scenarios increase the studies output over the community in lots of the community service network.
Things are competitive moat hope original surgery and off great opportunity to really feel it's essential specialty model focusing on essentially remove also community is that done.
That does impact I would like to emphasize the social value created by the Chihuahua in business development.
I think that civilian appointment situation, which many companies experiencing a wave of layoffs due to the economic downturn triggered by pandemic.
Based on all of these situations stabilizing.
<unk> has become one of the policy that got them.
And a new form of self employment are represented by the gig economy has caused widespread attention.
As a leading gigabit coordinate platform with a community service field our people on the platform provide a larger number of blue collar worker employment and entrepreneur opportunity.
Well in Poland, So chunghwa platform links enterprise and individual workers precisely connect suitable jobs in the knee and promote efficient production capacity matching.
At the same time that you could provide diversified services to access the capacity providers.
The two Houston hobby more quickly and the planned clear career development reasonably including safe under the Kuwaiti occasion with Feeney.
Cause them all to provide an answer polo basketball, so some workers, who have a higher proceeds for Korea protectors, whereas they pay out a painful part Shaw has helped to nearly 500000 award could find the jobs of which 22.6% have a college degree.
Paul talked about where we.
Also stimulated produces a social video.
<unk> employment stabilizing income and helping entrepreneurship in future.
Yeah.
Finally, I would like to conclude the essential leaving service demand for the community is a long term cost comes to market and for this reason the patriot coating travel and accommodation and batteries are enduring.
Back then it put me in the past three years has limited them more and more consumers to rely on order it online and offline services.
Further increasing the penetration rate on the reuse rate over the internet.
As the Internet technology company, we're continuously improve.
Sexual related community services through technology, and our clients seem probable.
The 10 years' experience to wholesale placement platform.
Accumulated our dominant validation communicates that match it out in the community quality cost savings ecosystem soft possibilities well first of all your tenants the Bible empower and the profitability of Chihuahua.
We are confident that the future development of Q4 will have long term and sustainable social and commercial value.
This concludes my prepared statement highway I'll now turn the call over to our staple battery, Paul who will discuss our financial results for the first half of 2022.
Thanks Leslie.
Hello, everyone.
Since joining us in Q4 for the year of 2022 conference call. Please be reminded that all amounts quoted here will be in RMB.
Stated otherwise.
Total revenue.
Two or four RMB 1853 minutes in the first year of 2022, which remained relatively stable compared with RMB 1800 38 million in the first of the year of 2021, that's further breakdown.
Revenue from owned.
Only bought universal solution for RMB, 1753, 8 million, representing a slight increase from RMB. One 1750 7 million in the first of the year of 2021.
Revenue from mobility service solutions to assisting.
Oh sure Buckman 10 minutes, having and full service solutions for RMB $56 five minute, representing an increase of 32, 2% from RMB.
$42 7 million in the first full year of 2021, primarily due to our first.
Enlarged.
Customer base and their service scope for sure that couldn't control solutions and also the commencement of fraud solution.
The July of 2000, and trying to walk the walk.
Revenue from housekeeping Commendation solutions.
M B 43 partners won't limit representing an increase of $24 seven.
Percent from RMB 730.
<unk> 34.8 minutes and of course, a year or two until they want primarily due to our large customer base for housekeeping and a commendation solutions solutions, which include the hotels bnb's.
As part of the network sooner and should we have achieved so far in the business expansion of our housekeeping and they'll come on there's a combination of solutions.
I don't know what do we have achieved is basically consistent with our strategy.
It's a direction.
Cost of revenue were RMB, one install it into summer hundreds.
Six to nine months.
Representing a decrease of 18.9 million.
Year over year, primarily attributed to the increase of our operation efficiency as a result gross profit improved significantly.
Reaching RMB 93, 9 million in the first half year of 2022.
Which has increased by 89, 6% year over year corresponding to a gross margin of 5% comparatively.
A two part of 7% in the center is lost to you Jeff.
General and administrative expense were RMB 99.5 minute, representing a decrease of 22, 8% from RMB 122.9 minutes in the first year or two of them trying to walk the decrease or from.
The decrease was primarily due to the trade decrease in the share based compensation expense from these 53 minutes in the first year of 2021 down to RMB two hour time to five minutes in the first of the year of 2022.
R&D expense was RMB, seven 2 million, representing a decrease of 22% from.
The two point in time.
Upon two minutes in the first full year of 2021, primarily due to the decrease in the average compensation for research and development personnel after restructuring our R&D team.
Net loss attributed to Chew all image was RMB 25 minutes.
<unk>.
As compared to RMB.
111 million.
In the first two years. After 2000 2021 ratio is a bigger increase.
The big decrease in the loss.
Shows our consistence of.
Yeah.
Consistent improvement in our profitability.
Adjusted net loss was RMB 14 point.
$14 1 million as compared to adjusted net loss.
M. B 90, 69 pardon three minutes in the first of the year of 2021, adjusted EBITDA was RMB.
10, 8 million as compared to adjusted EBITDA loss of 49 pardon for a minute in the first year of 2021.
In terms of the balance sheet as June 32022, the company has cash and short term investments of RMB.
148 million in the short term diet.
RMB 107 minutes.
This concludes my prepared remarks. Thank you for your attention. We are now ready to take your questions. Operator. Please go ahead.
Thank you very much.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing the keys.
If at any time you question has been addressed and you'd like to try a question. Please press Star then two.
At this time, we will pause momentarily to assemble a milestone.
Yeah.
Yes.
Yeah.
The first question comes from Darren <unk> from <unk>. Please go ahead.
Hi, guys. Good evening, just a quick question.
Okay.
Wonder if you can maybe give us a state right.
Right now just the.
Chinese economy, and since you know there's chatter about.
Loosening restrictions on Covid policy, how your businesses maybe been impacted in the.
September quarter, and then maybe even to.
October and November and maybe if trends improved at all and the growth of your businesses specifically.
Hum.
The on demand delivery side.
And any other segments, you kind of indulge in thanks.
Yeah.
Yeah.
Gotcha.
And since there is a trade.
COVID-19 has been the last several years and in China.
But luckily we are focusing on communities services and.
So.
Providing the service scores for essential people needs to wake holidays, food clothing housing and accommodation.
So actually that if we look ahead to the first half of 2022.
Total revenue of on demand delivery solution steel.
That database slow gloss and for our mobility service solution and housekeeping on accommodation on such shoot a very satisfying growth.
So it created that situation.
The situation with your logical for our quarter four so we believe that quite hopeful we will.
At Schuh better results not only in revenue, but on soybeans gross profit.
Yes, and in addition that.
Because.
The pandemic zero policy, we are still prevents people to going out.
And our current players that are most of the people has to rely on us.
Although online and delivery offline.
So which also increased so we use a rate holds internet and which will also help us to further grow our business regions and increase our cup yeah. Thank you.
Yeah.
Great. Thank.
Thank you Leslie and just maybe one follow up is is it challenging to find workers to fulfill your.
Gentlemen networks, just given that the zero copay policy are you able to procure the proper assets. Thanks.
Thanks.
Sure.
Yeah.
Excuse me I beg your pardon.
Yes.
Hello.
Hi.
For the last few words, so we didn't catch up quicker.
Say it again please.
Sure not a problem my question was just around.
If it's given the lockdown policy and people ordering online and whatnot is it challenging to fulfill the.
Riders and drivers for your fulfillment network kind of given the macro backdrop.
Yes, yes, yes, sorry about Ted for misunderstanding that.
Thanks.
Because people are being locked out, which also including that of what Paul has been lockout. So.
Turning to the people are not to travel freely on which she is.
And Chris has stabilized that.
Our fourth of course at the same time, we provide all kinds of support to help us.
What caused that to settle down and help them to focus all the work to provide the services. So.
And maybe it's not a priority to speaking, but actually that.
Coty as a slower rate of the workforce.
<unk> and <unk>.
Currently is that we are facing and less challenging in with our recruiting.
Deployment.
Thank you.
Yeah.
To ask a question you May press Star then one on your telephone keypad.
Okay.
The next question comes from Kevin Zhang from Tiger brokers.
Please go ahead.
Hi, Thank you for taking the question.
Hello.
Jackie are actually is blue bar chain. Thank you Gerry.
Thanks.
Yes.
Yes, thanks for the question.
Trees that we can see a little bit unchanged.
<unk>.
Even so scraped and adjust.
Share with the audience yet.
Yes, there will be some changes in our strategic directions.
We are maintaining the continuous development until order fulfillment services for credit problems that may tie in a D D.
To further optimize the efficiency and improve the properties.
At the same time, we'll let you order today promote our community service.
10200 business district, which is already covered by our existing service network.
So we will empower 15.
Community service provided by our SaaS product stories tooling kind of match the needs of millions of families and the community.
And what we said.
The way we will do is that we will attack multiple services in one side. So that they can expand at the IGN com and also where we are.
That's the capacity sharing all the platform so they can improve efficiencies.
So if we call it that to the difference between.
So strategically.
Our strategic direction I would say is that our previously.
The last 10 years, we may Dani.
Regarding the business mainly.
Our own team, but not all of it the way we are organized with social.
Sources and.
All of it.
Service providers.
Together to do the business and to grow off together, yes. Thank you.
Thanks, Thanks for answering.
Thank you.
A reminder to all participants. Please press Star then one to ask a question.
Yeah.
Yes.
Okay.
Ladies and gentlemen, as there are no further questions I would now like to turn the call over to Mr. Kishore <unk> for closing comments.
Okay.
Over to Mr. Keisha.
Zhang.
Okay. So if there are no other questions. We can finish our today's conference call.
Thanks for joining our conference call. Thank you.
Thank you very much.
Ladies and gentlemen. This concludes today's earnings call. Thank you all for joining US and you may now disconnect your lines.
Yeah.
[music].