Fangdd Network Group Ltd. (NASDAQ: DUO) (“FangDD” or “the
Company”), a leading property technology company in China, today
announced its unaudited financial results for the second quarter
ended June 30, 2020.
Second Quarter 2020 Financial
Highlights
- Revenue in the second quarter of
2020 decreased by 22.2% year over year to RMB737.7 million
(US$104.4 million) from RMB948.2 million in the same period of
2019.
- Net loss in the second quarter of
2020 was RMB14.0 million (US$2.0 million).
- Non-GAAP net income 1 in the second
quarter of 2020 was RMB11.9 million (US$1.7 million).
Second Quarter 2020 Operating
Highlights
- The number of active
agents2 in the Company’s marketplace in the second quarter of
2020 was 265.9 thousand, representing an increase of 26.9% from
209.5 thousand in the same period of 2019.
- The number of closed-loop
agents3 in the second quarter of 2020 was 18.2 thousand,
representing a decrease of 13.7% from 21.1 thousand in the
same period of 2019.
- Total closed-loop
GMV4 facilitated on the Company’s platform in the second
quarter of 2020 decreased by 13.5% to RMB50.0 billion (US$7.1
billion) from RMB57.8 billion in the same period of 2019. New
property and resale listings contributed RMB33.6 billion (US$4.8
billion) and RMB16.4 billion (US$2.3 billion), respectively, to the
total closed-loop GMV in the second quarter of 2020.
Mr. Yi Duan, Chairman and Co-Chief Executive
Officer of FangDD, commented, “As the COVID-19 pandemic came under
control in China in May, the real estate market started to revive.
As a result, the number of active agents on our platform increased
by 26.9% to 265.9 thousand during the second quarter of 2020.
Although our quarterly closed-loop GMV and net revenue still
declined due to the lingering effect of the pandemic, we have
already witnessed a strong rebound in real estate demand and are
quite optimistic about our ability to resume satisfactory growth in
the coming quarters. While we maintain our partnerships with large
real estate agencies, we also recognize the rapid rise of small-
and medium-sized agencies on our platform. Accordingly, we have
launched several new initiatives to assist small- and medium-sized
agencies in increasing their transactions and advancing their
businesses. We are confident that our competitive advantages in
SaaS, supply chain financing, and service innovation will enable us
to thrive in the post-pandemic world.”
Mr. Xi Zeng, Co-Chief Executive Officer of
FangDD, stated, “Leveraging our extensive expertise in real estate
transaction services, we provided sophisticated SaaS solutions to
real estate agencies, especially those small- and medium-sized
ones, to help them improve their operating efficiencies, increase
their customer targeting precision, and digitize their entire
transaction process for resale properties. Also, we partnered with
multiple banks and other financial services companies to furnish
real estate agents with supply chain financing and credit rating
solutions. In addition, we expanded our offerings with new
value-added services such as parking space transactions, certified
real estate transaction centers, and renovated property resale
services. Looking ahead, we plan to continuously upgrade our
technology platform, improve our user experience, expand our
service offerings, increase our market share, and maintain our
growth trajectory for the long run.”
Ms. Jiaorong Pan, Chief Financial Officer of
FangDD, added, “Despite the persistence of COVID-19 in the second
quarter, we faced the challenges head on and worked to refine our
cost structures and operating efficiency in order to prepare for
the coming growth cycle. As the outbreak continues to be gradually
brought under control, our business has also been able to
reaccelerate, and we saw total revenue in June increase by 35.9%
year over year. While decreases in both the number of transactions
and total closed-loop GMV facilitated on our platform constrained
our revenue generation capabilities in the second quarter, we have
seen that real estate agent activity is picking up, and we expect
these metrics to improve as the pandemic abates. Going forward, we
intend to maintain a prudent mindset throughout our capital
allocation process and focus on those initiatives capable of
supporting our long-term growth objectives, such as our SaaS
solutions and other service offerings. Such efforts should serve to
fortify our leadership in China’s real estate transaction industry
as we enter the post-pandemic period.”
Second Quarter 2020 Financial
Results
REVENUE
Revenue in the second quarter of 2020 decreased
by 22.2% to RMB737.7 million (US$104.4 million) from RMB948.2
million in the same period of 2019. The decrease was due to the
outbreak of COVID-19 in China and the resulting constraints imposed
on real estate agent activity, which negatively impacted the
ability of agents to facilitate transactions in the period.
Although real estate agent business activity has started to
gradually resume since April 2020, the outbreak of COVID-19 and its
impact on the real estate market caused both the number of
transactions and GMV facilitated through the Company’s marketplace
to decrease on a year-over-year basis, both of which significantly
impacted the Company’s revenue generation capabilities in the
period. However, as the pandemic has been gradually brought under
control in China, the Company has begun to ramp up its business in
turn and thus generated revenue of RMB390.0 million (US$55.2
million) for the month ended June 30, 2020, representing an
increase of 35.9% year over year.
COST OF
REVENUE
Cost of revenue in the second quarter of 2020
decreased by 15.1% to RMB616.7 million (US$87.3 million) from
RMB726.0 million in the same period of 2019. This decrease was
mainly attributable to a decrease in commission fees payable to
agents for the services they rendered, which resulted from both the
decreased commissions from transactions and the increased costs
relating to various initiatives being offered to agents during the
period to overcome the negative impact of the COVID-19
pandemic.
GROSS
PROFIT
Gross profit in the second quarter of 2020
decreased by 45.5% to RMB121.0 million (US$17.1 million) from
RMB222.2 million in the same period of 2019. Gross margin in the
second quarter of 2020 was 16.4% compared with 23.4% during the
same period of 2019.
OPERATING
EXPENSES
Operating expenses in the second quarter of
2020, including share-based compensation expenses of RMB25.9
million (US$3.7 million), decreased by 1.2% to RMB153.9 million
(US$21.8 million) from RMB155.7 million in the same period of
2019.
- Sales and marketing expenses in the
second quarter of 2020 decreased by 86.4% to RMB2.9 million (US$0.4
million) from RMB21.3 million in the same period of 2019. The
decrease in sales and marketing expenses was primarily due to the
reduction in spending on brand promotion and marketing activities
to attract property listings from real estate sellers to the
Company’s marketplace.
- Product development expenses in the
second quarter of 2020 were RMB70.5 million (US$10.0 million)
compared to RMB79.1 million in the same period of 2019. The
decrease in product development expenses was mainly attributable to
the Company’s shifting from expanding the team size to optimizing
the operating efficiency of its product development team in
response to the outbreak of COVID-19, which led to a decrease in
personnel-related expenses in the period. The decrease was
partially offset by share-based compensation expenses of RMB16.3
million (US$2.3 million) in the second quarter of 2020.
- General and administrative expenses
in the second quarter of 2020 were RMB80.5 million (US$11.4
million), compared to RMB55.3 million in the same period of 2019.
The increase in general and administrative expenses in the period
included share-based compensation expenses of RMB9.6 million
(US$1.4 million). The remaining increase of RMB15.6 million (US$2.2
million) in general and administrative expenses was primarily
attributable to (1) an increased headcount and various expenditures
to improve the Company’s corporate governance and ensure compliance
in relation to the Company’s status as a U.S.-listed company; and
(2) an increase in the account of provisions for doubtful
debtors.
NET INCOME
(LOSS)
Net loss in the second quarter of 2020 was
RMB14.0 million (US$2.0 million) compared to a net income of
RMB85.5 million in the same period of 2019.
Non-GAAP net income in the second quarter of
2020 was RMB11.9 million (US$1.7 million) compared to non-GAAP net
income of RMB85.5 million in the same period of 2019.
NET INCOME
(LOSS) PER ADS
Basic and diluted net loss per American
Depositary Share (“ADS”) in the second quarter of 2020 were both
RMB0.18 (US$0.03). In comparison, the Company’s basic and diluted
net income attributable to ordinary shareholders per ADS in the
same period of 2019 were both RMB1.00. Each ADS represents 25 of
the Company’s Class A ordinary shares.
Liquidity
As of June 30, 2020, the Company had cash and
cash equivalents, restricted cash, and short-term investments of
RMB950.2 million (US$134.5 million), short-term bank borrowings of
RMB361.9 million (US$51.2 million), as well as un-utilized bank
facilities of RMB297.0 million (US$42.0 million). For the second
quarter of 2020, net cash used in operating activities was RMB62.2
million (US$8.8 million).
Business
Outlook
For the third quarter of 2020, the Company
expects its revenue to be between RMB1,050 million and RMB1,150
million. This forecast only reflects the Company’s current and
preliminary views on the market and operational conditions, which
are subject to change.
Conference Call
Information
The Company’s management team will hold a Direct
Event conference call on Thursday, August 13, 2020, at 8:30 P.M.
Eastern Time (or 8:30 A.M. Beijing Time on Friday, August 14, 2020)
to discuss the financial results. Details for the conference call
are as follows:
Event
Title: |
Fangdd Network
Group Ltd. Second Quarter 2020 Earnings Conference Call |
Conference ID: |
#2783556 |
Registration Link: |
http://apac.directeventreg.com/registration/event/2783556 |
Due to the global outbreak of the novel
coronavirus, operator assisted conference calls are not available
at the moment. All participants must use the link provided above to
complete the online registration process in advance of the
conference call. Upon registering, each participant will receive a
set of participant dial-in numbers, the Direct Event passcode, and
a unique access PIN, which can be used to join the conference
call.
A replay of the conference call will be accessible through
August 21, 2020, by dialing the following numbers:
United
States: |
+1-646-254-3697 |
Hong Kong, China: |
+852-3051-2780 |
Replay Code: |
#2783556 |
A live and archived webcast of the conference
call will also be available at the Company’s investor relations
website at http://ir.fangdd.com/.
Exchange
Rate
This press release contains translations of
certain Renminbi amounts into U.S. dollars at specified rates
solely for the convenience of readers. Unless otherwise noted, all
translations from Renminbi to U.S. dollars, in this press release,
were made at a rate of RMB7.0651 to US$1.00, the exchange rate set
forth in the H.10 statistical release of the Federal Reserve Board
on June 30, 2020. The Company makes no representation that the
Renminbi or U.S. dollar amounts referred could be converted into
U.S. dollar or Renminbi, as the case may be, at any particular rate
or at all.
Non-GAAP Financial
Measures
To supplement the financial measures prepared in
accordance with generally accepted accounting principles in the
United States, or GAAP, this press release presents non-GAAP income
(loss) from operations, non-GAAP operating margin, non-GAAP net
income (loss) and non-GAAP net margin by excluding share-based
compensation expenses from income (loss) from operations and net
income, respectively. These non-GAAP financial measures are not
defined under U.S. GAAP and are not presented in accordance with
U.S. GAAP. The Company believes these non-GAAP financial measures
are important to help investors understand the Company’s operating
and financial performance, compare business trends among different
reporting periods on a consistent basis and assess the Company’s
core operating results, as they exclude certain expenses that are
not expected to result in cash payments. The use of the above
non-GAAP financial measures has certain limitations. Share-based
compensation expenses have been and will continue to be incurred in
the future and are not reflected in the presentation of the
non-GAAP financial measures, but should be considered in the
overall evaluation of the Company’s results. These non-GAAP
financial measures should be considered in addition to financial
measures prepared in accordance with GAAP, but should not be
considered a substitute for, or superior to, financial measures
prepared in accordance with GAAP. The Company compensates for these
limitations by reconciling these non-GAAP financial measures to the
most directly comparable U.S. GAAP measures, which should be
considered when evaluating the Company’s performance.
Reconciliation of each of these non-GAAP financial measures to the
most directly comparable GAAP financial measure is set forth at the
end of this release.
About
FangDD
Fangdd Network Group Ltd. (NASDAQ: DUO)
(“FangDD” or the “Company”) is a leading property technology
company in China, operating one of the largest online real estate
marketplaces in the country. Through innovative use of mobile
internet, cloud and big data, FangDD has fundamentally
revolutionized the way real estate agents conduct business through
a suite of modular products and services powered by SaaS tools,
productions and technology. Of the approximately 2.0 million real
estate agents in China, more than 1,250,000 were on its platform as
of December 31, 2019. For more information, please visit
http://ir.fangdd.com.
Safe Harbor
Statement
This announcement contains forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “aim,” “anticipate,” “believe,” “estimate,”
“expect,” “hope,” “going forward,” “intend,” “ought to,” “plan,”
“project,” “potential,” “seek,” “may,” “might,” “can,” “could,”
“will,” “would,” “shall,” “should,” “is likely to” and the negative
form of these words and other similar expressions. Among other
things, statements that are not historical facts, including
statements about FangDD’s beliefs and expectations, the business
outlook and quotations from management in this announcement, as
well as FangDD’s strategic and operational plans, are or contain
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following. The general economic and business conditions in China
may deteriorate. The growth of Internet and mobile user population
in China might not be as strong as expected. FangDD’s plan to
attract new and retain existing real estate agents, expand property
listings, develop new products and increase service offerings might
not be carried out as expected. FangDD might not be able to
implement all of its strategic plans as expected. Competition in
China may intensify further. All information provided in this press
release is as of the date of this press release and are based on
assumptions that the Company believes to be reasonable as of this
date, and FangDD does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
Investor Relations
ContactFangDDMs. Linda LiDirector, Capital Markets
DepartmentPhone: +86-0755-2699-8968E-mail: ir@fangdd.com
ICR, Inc.Jack WangPhone: +1(646) 308-1649E-mail:
FangDD@icrinc.com
Fangdd Network Group Ltd.SELECTED
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS DATA(All amounts in thousands
of Renminbi, except for share and
per share data) |
|
|
As of December 31, |
|
As of June 30, |
|
2019 |
|
2020 |
Assets |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
1,103,747 |
|
833,688 |
Restricted cash |
230,125 |
|
95,315 |
Short-term investments |
11,500 |
|
21,202 |
Accounts
receivable, net |
2,189,980 |
|
2,082,899 |
Prepayments and other current assets |
194,668 |
|
413,888 |
Total current assets |
3,730,020 |
|
3,446,992 |
|
|
|
|
Total assets |
4,372,125 |
|
4,040,332 |
|
|
|
|
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
Short-term bank borrowings |
490,000 |
|
361,944 |
Accounts
payable |
1,897,611 |
|
1,842,511 |
Customers’ refundable fees |
44,916 |
|
37,333 |
Accrued
expenses and other payables |
338,626 |
|
284,844 |
Taxes
payable |
7 |
|
- |
Total current liabilities |
2,771,160 |
|
2,526,632 |
|
|
|
|
Total liabilities |
2,783,070 |
|
2,539,581 |
|
|
|
|
Total shareholders' equity |
1,589,055 |
|
1,500,751 |
Total liabilities and equity |
4,372,125 |
|
4,040,332 |
|
|
|
|
Fangdd Network Group Ltd.SELECTED
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
DATA(All amounts in thousands of
Renminbi, except for share and per share
data) |
|
|
For the Three Months Ended June
30, |
For the Six Months Ended June
30, |
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
Revenue |
948,232 |
|
|
737,690 |
|
|
1,604,238 |
|
|
1,009,798 |
|
Cost of
revenue |
(726,006 |
) |
|
(616,737 |
) |
|
(1,260,525 |
) |
|
(839,452 |
) |
Gross profit |
222,226 |
|
|
120,953 |
|
|
343,713 |
|
|
170,346 |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Sales and
marketing expenses |
(21,347 |
) |
|
(2,895 |
) |
|
(27,465 |
) |
|
(4,282 |
) |
Product
development expenses |
(79,082 |
) |
|
(70,495 |
) |
|
(144,818 |
) |
|
(165,474 |
) |
General
and administrative expenses |
(55,250 |
) |
|
(80,517 |
) |
|
(99,774 |
) |
|
(173,580 |
) |
Total operating expenses |
(155,679 |
) |
|
(153,907 |
) |
|
(272,057 |
) |
|
(343,336 |
) |
|
|
|
|
|
|
|
|
Income (loss) from operations |
66,547 |
|
|
(32,954 |
) |
|
71,656 |
|
|
(172,990 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
85,510 |
|
|
(13,987 |
) |
|
100,307 |
|
|
(150,432 |
) |
Accretion of Redeemable Convertible Preferred Shares |
(47,845 |
) |
|
- |
|
|
(114,081 |
) |
|
- |
|
Net income (loss) attributable to ordinary
shareholders |
37,665 |
|
|
(13,987 |
) |
|
(13,774 |
) |
|
(150,432 |
) |
|
|
|
|
|
|
|
|
Net income (loss) |
85,510 |
|
|
(13,987 |
) |
|
100,307 |
|
|
(150,432 |
) |
Other comprehensive (loss) income |
|
|
|
|
|
|
|
Foreign currency translation adjustment, net of nil income
taxes |
(63,515 |
) |
|
(1,107 |
) |
|
(3,096 |
) |
|
9,780 |
|
Total comprehensive loss, net of income
taxes |
21,995 |
|
|
(15,094 |
) |
|
97,211 |
|
|
(140,652 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share |
|
|
|
|
|
|
|
-
Basic |
0.04 |
|
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.08 |
) |
-
diluted |
0.04 |
|
|
(0.01 |
) |
|
(0.01 |
) |
|
(0.08 |
) |
Net income (loss) per ADS |
|
|
|
|
|
|
|
-
Basic |
1.00 |
|
|
(0.18 |
) |
|
(0.36 |
) |
|
(1.89 |
) |
-
diluted |
1.00 |
|
|
(0.18 |
) |
|
(0.36 |
) |
|
(1.89 |
) |
Weighted
average number of ordinary shares used in computing net loss per
share, basic and diluted |
|
|
|
|
|
|
|
-
Basic |
945,712,030 |
|
|
1,996,169,104 |
|
|
945,712,030 |
|
|
1,990,437,318 |
|
-
diluted |
945,712,030 |
|
|
1,996,169,104 |
|
|
945,712,030 |
|
|
1,990,437,318 |
|
Reconciliation of GAAP and Non-GAAP
Results(All amounts in thousands of
Renminbi, except for share and per share
data) |
|
|
For the Three MonthsEnded June 30, |
|
For the Six Months Ended June
30, |
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
GAAP income/(loss) from operations |
66,547 |
|
|
(32,954) |
|
|
71,656 |
|
|
(172,990) |
|
Share-based compensation expenses |
- |
|
|
25,916 |
|
|
- |
|
|
52,347 |
|
Non-GAAP income/(loss) from operations |
66,547 |
|
|
(7,038) |
|
|
71,656 |
|
|
(120,643) |
|
|
|
|
|
|
|
|
|
GAAP net income/(loss) |
85,510 |
|
|
(13,987) |
|
|
100,307 |
|
|
(150,432) |
|
Share-based compensation expenses |
- |
|
|
25,916 |
|
|
- |
|
|
52,347 |
|
Non-GAAP net income/(loss) |
85,510 |
|
|
11,929 |
|
|
100,307 |
|
|
(98,085) |
|
|
|
|
|
|
|
|
|
GAAP operating margin5 |
7.0% |
|
|
(4.5%) |
|
|
4.5% |
|
|
(17.1%) |
|
Share-based compensation expenses |
- |
|
|
3.5% |
|
|
- |
|
|
5.2% |
|
Non-GAAP operating margin |
7.0% |
|
|
(1.0%) |
|
|
4.5% |
|
|
(11.9%) |
|
|
|
|
|
|
|
|
|
GAAP net margin6 |
9.0% |
|
|
(1.9%) |
|
|
6.3% |
|
|
(14.9%) |
|
Share-based compensation expenses |
- |
|
|
3.5% |
|
|
- |
|
|
5.2% |
|
Non-GAAP net margin |
9.0% |
|
|
1.6% |
|
|
6.3% |
|
|
(9.7%) |
|
____________________________
1 Non-GAAP net income is defined as net loss
excluding share-based compensation expenses. For more information
on these non-GAAP financial measures, please see the section
captioned “Non-GAAP Financial Measures” and the tables captioned
“Reconciliation of GAAP and Non-GAAP Results” set forth at the end
of this release.2 “Active agents” refer to real estate agents who
have visited the Company’s marketplace and used one or more of its
functions within a period of time.3 Closed-loop agents refer to
real estate agents who have completed closed-loop transactions in
the Company’s marketplace under the Company’s monitoring and
control.4 “Closed-loop GMV” refers to the GMV of closed-loop
transactions facilitated in our marketplace during the specified
period.5 Operating margin is defined as income (loss) from
operations divided by revenue.6 Net margin is defined as net income
(loss) attributable to ordinary shareholders divided by
revenue.
FangDD Network (NASDAQ:DUO)
Historical Stock Chart
From Aug 2024 to Sep 2024
FangDD Network (NASDAQ:DUO)
Historical Stock Chart
From Sep 2023 to Sep 2024