BEIJING, Aug. 14, 2020 /PRNewswire/ -- TD Holdings, Inc.
(Nasdaq: GLG) (the "Company"), a commodities trading service
and used luxurious car rental provider in China today announced its financial results
for the six months ended June 30,
2020.
The Company began to operate its commodities trading service in
Shenzhen, China in November 2020. In January 2019, we changed
the Company's name to TD Holdings, Inc., which better represents
our current focus on the new commodities trading business. The
letter "T" in the name representing Chinese character for "Bronze,"
indicating the Company's focus on the commodities trading business,
and particularly on the trading of nonferrous metals such as bronze
as the main direction of the Company's business in the future.
Ms. Renmei Ouyang, the Chief
Executive Officer of the Company, stated, "We are pleased to report
our financial results for the six months ended June 30, 2020. We started our commodity trading
business in late 2019, and we made increasing revenues from our
commodity trading business for the three and six months ended
June 30, 2020, even during the
ongoing outbreak of the coronavirus disease 2019 (COVID-19). I
believe that the commodity trading business will continue to
bolster the Company's income and increase shareholder value."
Financial Highlights
In the quarter ended June 30,
2020
- Revenues from commodities trading business was $3.71 million, consisting of $1.56 million from sales of commodities products,
and $2.15 million from supply chain
management services for the quarter ended June 30, 2020;
- Net income from commodities trading business was $2.40 million, and basic and diluted earnings per
share from commodities trading business was $0.05.
- We raised funds aggregating $30
million from issuance of convertible notes, accompanied by
warrants to purchase 20,000,000 shares of Common Stock issuable
upon conversion of the convertible notes at an exercise price of
$1.80, and raised $36 million from the holders of convertible notes
upon their conversion of the convertible notes and exercise of
warrants. We therefore incurred noncash amortization of beneficial
conversion feature of $3.4 million
and amortization of relative fair value of warrants of $3.06 million;
- Net loss was $4.36 million, as
compared with $1.04 million for the
same period ended June 30, 2019;
and
- Basic and diluted loss per share was $0.09, compared with basic and diluted loss per
share of $0.14 for the same period
ended June 30, 2019.
- Shareholders' equity as of June 30,
2020 was $88.8 million,
compared with $5.8 million as of
December 31, 2019.
In the six months ended June 30,
2020
- Revenues from commodities trading business was $5.19 million, consisting of $2.62 million from sales of commodities products,
and $2.56 million from supply chain
management services;
- Net income from commodities trading business was $2.54 million, and basic and diluted earnings per
share from commodities trading business was $0.05.
- We raised funds aggregating $30
million from issuance of convertible notes, accompanied by
warrants to purchase 20,000,000 shares of Common Stock issuable
upon conversion of the convertible notes at an exercise price of
$1.80, and raised $36 million from the holders of convertible notes
upon their conversion of the convertible notes and exercise of
warrants. We therefore incurred noncash amortization of beneficial
conversion feature of $3.4 million
and amortization of relative fair value of warrants of $3.06 million;
- Net loss was $4.50 million, as
compared with $2.87 million for the
same period ended June 30, 2019;
and
- Basic and diluted loss per share was $0.15, compared with basic and diluted loss per
share of $0.45 for the same period
ended June 30, 2019.
Financial Results
In the quarter ended June 30,
2020
Revenues
We generate revenue from commodities trading business and used
car leasing business.
Income from commodities trading business
For the three months ended June 30,
2020, the Company sold non-ferrous metals to two customers
at fixed prices, and earned revenues when the product ownership was
transferred to its customers. The Company earned revenues of
$1,563,669 from sales of commodity
products. There was no such revenue for the three months ended
June 30, 2019.
For the three months ended June 30,
2020, the Company earned $2,145,810 from loan recommendation services from
the facilitation of a loan volume of approximately $86.0 million (RMB 604.6
million) with eight customers.
Income from used car leasing business
As affected by COVID-19, we closed our car rental facilities
from the end of January to March
2020, and gradually resumed business in April 2020. However due to cautious attitude on
transportation, we did not generate operating lease income for the
three months ended June 30, 2020. The
extent to which COVID-19 impacts our income from operating lease
for the fiscal year 2020 will depend on certain future
developments, including the duration and spread of the outbreak,
emerging information concerning the severity of COVID-19 and the
actions taken by governments and private businesses in attempting
to contain the spread of COVID-19, all of which is uncertain at
this point.
Cost of revenue
Cost of revenue associated with commodity trading
Cost of revenue primarily consists of purchase costs of
non-ferrous metal products. For the three months ended June 30, 2020, the Company purchased non-ferrous
metal products of $1,570,132 from two
third party suppliers, and sold non-ferrous metal products to two
customers. The Company recorded cost of revenue of $1,570,132. There was no such cost for the three
months ended June 30, 2019 because
this was a new business launched in December
2019.
Costs associated with Operating lease
The operating lease expense mainly consisted of depreciation
expenses on leasing business assets and car related expenses
arising from lease of cars.
The depreciation expenses on leasing business assets
increased from $55,321 for the three
months ended June 30, 2019 to
$82,633 for the three months ended
June 30, 2020, representing an
increase of $27,312, or 49%. The
Company purchased five used luxurious cars in April through
June 2019, leading to an increase of
depreciated months for these new cars for the three months ended
June 30, 2020 as compared with the
same period ended June 30, 2019. As
of June 30, 2020, the Company had
eleven used luxurious cars, as compared with thirteen cars as of
June 30, 2019.
In January 2019, the Company
officially launched sub-lease of luxurious car business through
leasing cars from both third party peer companies and individuals.
The Company recorded car leasing expenses of $141,661 and $342,217 for the three months ended June 30, 2020 and 2019, respectively. The
decrease was mainly caused by the Company's closure of car rental
facilities from the end of January
2020 and the slowing down of the business since we resumed
operations in April 2020, as affected
by COVID-19.
Selling, general, and administrative expenses
Selling, general and administrative expenses decreased from
$1,133,957 for the three months ended
June 30, 2019 to $491,671 for the three months ended June 30, 2020, representing a decrease of
$642,286, or 57%. Selling, general
and administrative expenses primarily consisted of salary and
employee benefits, office rental expense, business tax and
surcharge, professional service fees, office supplies. The decrease
was mainly attributable to combined effects of a decrease of other
operating expenses of $368,344 as a
result of slowing down our car rental business for the three months
ended June 30, 2020, and a decrease
of legal and consulting expenses of $261,477, primarily as a result of a decrease in
expenses incurred for the registered direct offerings in April and
May 2019, including a decrease of
audit related fees of $139,694, and
an decrease of commission of $100,000
to a third party vendor for referral of underwriters.
Interest income
Interest income was primarily generated from loans made to third
parties and related parties. For the three months ended
June 30, 2020, interest income was
$1,586,552, representing an increase
of $1,564,534, or 7,106% from
$22,018 for the three months ended
June 30, 2019. The increase was
primarily due to 1) loans aggregating $79.8
million made to a customer, to whom the Company also
provided loan recommendations services. For the three months ended
June 30, 2020, the Company recognized
interest income of $1,355,107, and 2)
an increase of loans receivable from others third parties by
$1.5 million, leading to an increase
of interest income.
Amortization of beneficial conversion feature and relative
fair value of warrants relating to issuance of convertible
notes
For the three months ended June 30,
2020, the item represented the full amortization of
beneficial conversion feature of $3.4
million and amortization of relative fair value of warrants
of $3.06 million relating to the
convertible notes which was exercised in May
2020.
Net loss
As a result of the foregoing, net loss for the three months
ended June 30, 2020 was $4,361,258, representing an increase of
$3,320,033 from net loss of
$1,040,325 for the three months ended
June 30, 2019.
For the three months ended June 30,
2020, our net loss by segment primarily consisted of a net
profit of $2.40 million in our
commodity trading business, and an amortization expenses of
beneficial conversion feature and relative fair value of warrants
relating to issuance of convertible notes of $6.46 million.
In the six months ended June 30,
2020
Revenues
We generate revenue from commodities trading business and used
car leasing business.
Income from commodities trading business
For the six months ended June 30,
2020, the Company sold non-ferrous metals to two customers
at fixed prices, and earned revenues when the product ownership was
transferred to its customers. The Company earned revenues of
$2,617,301 from sales of commodity
products. There was no such revenue for the six months ended
June 30, 2019.
For the six months ended June 30,
2020, the Company earned $2,561,187 from loan recommendation services from
the facilitation of a loan volume of approximately $102.4 million (RMB 720.6
million) with eight customers.
Income from used car leasing business
As affected by COVID-19, we closed our car rental facilities
from the end of January to March
2020, and gradually resumed business in April 2020. However due to cautious attitude on
transportation, we did not generate operating lease income for the
six months ended June 30, 2020. The
extent to which COVID-19 impacts our income from operating lease
for the fiscal year 2020 will depend on certain future
developments, including the duration and spread of the outbreak,
emerging information concerning the severity of COVID-19 and the
actions taken by governments and private businesses in attempting
to contain the spread of COVID-19, all of which is uncertain at
this point.
For the six months ended June 30,
2019, the Company generated operating lease income from used
luxurious cars which are either owned by the Company or leased from
third party vendors. The Company generated operating lease income
of $940,894 for the six months ended
June 30, 2019.
Cost of revenue
Cost of revenue associated with commodity trading
Cost of revenue primarily consists of purchase costs of
non-ferrous metal products. For the six months ended June 30, 2020, the Company purchased non-ferrous
metal products of $2,625,275 from two
third party suppliers, and sold non-ferrous metal products to two
customers. The Company recorded cost of revenue of $2,625,275. There was no such cost for the six
months ended June 30, 2019 because
this was a new business launched in December
2019.
Costs associated with Operating lease
The operating lease expense mainly consisted of depreciation
expenses on leasing business assets and car related expenses
arising from lease of cars.
The depreciation expenses on leasing business assets increased
from $102,179 for the six months
ended June 30, 2019 to $162,211 for the six months ended June 30, 2020, representing an increase of
$60,032, or 59%. The Company
purchased five used luxurious cars in April through June 2019, leading to an increase of depreciated
months for these new cars for the six months ended June 30, 2020 as compared with the same period
ended June 30, 2019. As of
June 30, 2020, the Company had eleven
used luxurious cars, as compared with thirteen cars as of
June 30, 2019.
In January 2019, the Company
officially launched sub-lease of luxurious car business through
leasing cars from both third party peer companies and individuals.
The Company recorded car leasing expenses of $161,397 and $533,010 for the six months ended June 30, 2020 and 2019, respectively. The
decrease was mainly caused by the Company's closure of car rental
facilities from the end of January
2020 and the Company slowed down the business since we
resumed operations in April 2020, as
affected by COVID-19.
Selling, general, and administrative expenses
Selling, general and administrative expenses decreased from
$3,040,276 for the six months ended
June 30, 2019 to $916,786 for the six months ended June 30, 2020, representing a decrease of
$2,123,490, or 70%. Selling, general
and administrative expenses primarily consisted of salary and
employee benefits, office rental expense, business tax and
surcharge, professional service fees, office supplies. The decrease
was mainly attributable to combined effects of a decrease of other
operating expenses of $726,862 as a
result of slowing down our car rental business for the six months
ended June 30, 2020, and a decrease
of legal and consulting expenses of $1,482,400, primarily as a result of 1) issuance
of 502,391 restricted shares as compensation of $884,208 to certain service providers for the
three months ended March 31, 2019,
while no such issuance was made for the three months ended
March 31, 2020, and 2) a decrease in
expenses incurred for the registered direct offerings in April and
May 2019, including an increase of
audit related fees of $296,353, an
increase of commission of $100,000 to
a third party vendor for referral of underwriters.
Interest income
Interest income was primarily generated from loans made to third
parties and related parties. For the six months ended June 30, 2020, interest income was $1,726,564, representing an increase of
$1,694,083, or 5,216% from
$32,486 for the six months ended
June 30, 2019. The increase was
primarily due to 1) loans aggregating $79.8
million made to a customer, to whom the Company also
provided loan recommendations services. For the three months ended
June 30, 2020, the Company recognized
interest income of $1,355,107, and 2)
an increase of loans receivable from others third parties by
$1.5 million, leading to an increase
of interest income.
Amortization of beneficial conversion feature and relative
fair value of warrants relating to issuance of convertible
notes
For the six months ended June 30,
2020, the item represented the full amortization of
beneficial conversion feature of $3.4
million and amortization of relative fair value of warrants
of $3.06 million relating to the
convertible notes which was exercised in May
2020.
Net loss
As a result of the foregoing, net loss for the six months ended
June 30, 2020 was $4,501,230, representing an increase of
$1,631,079 from net loss of
$2,870,151 for the six months ended
June 30, 2019.
For the six months ended June 30,
2020, our net loss by segment primarily consisted of a net
profit of $2.54 million in our
commodities trading business, and
an amortization expenses of beneficial conversion feature and
relative fair value of warrants relating to issuance of convertible
notes of $6.46 million.
Six Months Ended June 30, 2020
Cash Flows
As of June 30, 2020, the Company
had cash and cash equivalents of $1.49
millions, as compared with $1.30
million as of December 31, 2019.
Net cash used in operating activities was $2.60 million for the six months ended
June 30, 2020, as compared with
$1.74 million for the same period of
2019.
Net cash used in investing activities was $78.97 million for the six months ended
June 30, 2020, compared to
$5.10 million for the same period of
2019.
Net cash provided by financing activities was $80.24 million for the six months ended
June 30, 2020, compared to
$6.72 million for the same period of
2019.
About TD Holdings, Inc.
TD Holdings, Inc. (Nasdaq: GLG) is a commodities trading
and used luxurious car rental service provider in China. The commodities trading business is
conducted under the brand name "Huamucheng" by the Company's
wholly-owned subsidiary, Shenzhen Huamucheng Trading Co., Ltd in
Shenzhen. The used luxurious car
business is conducted under the brand name "BatCar" by the
Company's VIE entity, Tianxing Kunlun Technology Co. Ltd, from its
headquarters in Beijing. For more
information please visit http://ir.tdglg.com.
Safe Harbor Statement
This press release may contain certain "forward-looking
statements" relating to the business of TD Holdings, Inc. and its
subsidiary companies. All statements, other than statements of
historical fact included herein are "forward-looking statements."
These forward-looking statements are often identified by the use of
forward-looking terminology such as "believes," "expects" or
similar expressions, involve known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. The following factors,
among others, could cause actual results to differ materially from
those described in these forward-looking statements: there is
uncertainty about the spread of the COVID-19 virus and the impact
it will have on the Company's operations, the demand for the
Company's products and services, global supply chains and economic
activity in general. Investors should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. Investors should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. The Company's actual results could differ
materially from those anticipated in these forward-looking
statements as a result of a variety of factors, including those
discussed in the Company's periodic reports that are filed with the
Securities and Exchange Commission and available on its
website at http://www.sec.gov. All forward-looking
statements attributable to the Company or persons
acting on its behalf are expressly qualified in their
entirety by these factors. Other than as required under the
securities laws, the Company does not assume a duty to update these
forward-looking statements.
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SOURCE TD Holdings, Inc.