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Highlights for Second Quarter 2019:
- GMV1 reached
RMB3,238.8 million (US$471.8 million ) for Q2 2019, representing an increase of 95.9% fromRMB1,653.4 million in Q2 2018. - Total number of orders2 was 954.8 thousand for Q2 2019, representing an increase of 109.4% from 455.9 thousand in Q2 2018.
- Number of active customers3 increased by 67.7% to 428.4 thousand for Q2 2019 from 255.5 thousand in Q2 2018.
- Total revenues reached
RMB1,712.1 million (US$249.4 million ) for Q2 2019, increasing by 40.3% fromRMB1,220.1 million in Q2 2018. - Gross margin was 18.9% for Q2 2019, compared to 18.3% in Q2 2018.
- Net income was
RMB40.1 million (US$5.8 million ) for Q2 2019, compared withRMB36.4 million in Q2 2018. - Non-GAAP net income4 was
RMB43.0 million (US$6.3 million ) for Q2 2019, compared withRMB41.0 million in Q2 2018.
_________________________
1 GMV, or Gross Market Value, refers to the total value of all orders of products and services, excluding the value of whole car sales, placed on our online platform and in our offline experience centers, regardless of whether the products are delivered or returned or whether the services are cancelled during the period presented.
2 Total number of orders refers to the total number of orders of products and services, excluding the number of whole car sales, placed on our online platform and in our offline experience centers, regardless of whether the products are delivered or returned or whether the services are cancelled during the period presented.
3 Active customer refers to a customer who made at least one account purchase during the period presented.
4 Non-GAAP net income is a non-GAAP financial measure, which is defined as net income excluding share-based compensation expenses. See “Reconciliation of GAAP and Non-GAAP Results” at the end of this press release.
Commentary
Mr. Richard Rixue Li, Chairman and Chief Executive Officer of
“We are excited about the expansion of both selection and offerings on our platform, as we continued to achieve sustained growth in both the active customer and paid membership base. In the second quarter, our active customers reached 428,400, representing a substantial growth of 67.7% year over year, and 59.3% of which sign up our paid membership, frequently returning to our platform to make purchases. The healthy growth of our number of active customers was also in part, thanks to our technology advancement throughout our online and offline integrated platform, enhancing customer engagement and their shopping experience, both online and offline. Ultimately, the growing customer base reflects the enormous and ever-expanding market demand for upscale products and services from China’s rising consumers in pursuit of an exquisite lifestyle. We are well positioned to evolve with market preference by strengthening and extending our trusted supply chain system and brand partnership across the globe to capture this tremendous opportunity in the luxury lifestyle industry,” Mr. Li concluded.
“Our solid second quarter results underscore the successful execution of our core business strategy in building China’s leading premium lifestyle platform by leveraging both our online and offline capabilities with broadened brand relationships and enhanced customer experience,” said Mr.
Recent Developments
- During the second quarter of 2019,
Secoo launched the “618” mid-year promotion festival and a variety of promotional events backed by its preeminent big-data technology and supply chain capability, coupled with variousSecoo premium membership promotion initiatives. Benefitting from these marketing events, the Company achieved outstanding performance in attracting new customers.
- From the second quarter of 2019 to date,
Secoo expanded direct collaborations with 190 brands, including sought-after footwear brand - UGG, luxury fashion brand fromParis – Balmain. In addition,Prada , Miumiu, René Caovilla, and Michael Kors have all successfully launched their official stores on theSecoo platform, bringing superior high-profile shopping experiences and product and service offerings to our customers.
- Most recently,
Secoo partnered with seven luxury brands including Balmain,Roger Vivier , Aspinal ofLondon , in launching the “Season of Love” special collection for ChineseValentine's Day with limited-edition products exclusively for high-end customers onSecoo . Brands are increasingly choosing to launch exclusive sales on Secoo’s platform, delivering online and offline trunk shows or new arrival events in collaboration withSecoo . This has been exemplified by a variety of brand marketing events during the quarter, such as the initial launch of “Observation,” a limited-edition collection co-designed by “Shang Xia” brand under Hermès and a contemporary artist,Chen Man .
Secoo further deepened cooperation with LuisaViaRoma (“LVR”) andEl Corte Ingles . LVR is a leading Italian luxury retailer that offers products from more than 500 most prestigious designer brands. Starting from mid-June, products from an increasing number of luxury brands under LVR have progressively become available onSecoo's platform, substantially enriching the shopping experience forSecoo's high-end customers with a broad selection of fashion choices from around the globe.El Corte Ingles is the largest department store inEurope and third largest in the world. In May, three childrenswear brands underEl Corte Ingles launched inChina with exclusive sales onSecoo app. In addition to collaboration in children’s brands,El Corte Ingles will team up with designers onSecoo platform for potential co-edition collections in the future.
- Recently,
Secoo established collaboration with WallpaperSTORE*, the world top lifestyle designer brand, with the first batch of over a thousand selections of products made available on theSecoo platform, immensely broadening Secoo’s original design product offerings (“Secoo Ming”).
- As a part of the continuous effort to enhance Secoo’s supply chain system across the globe, in May, the Company signed a strategic agreement with a well-known Japanese logistics company,
Successors Group Co. LTD, to carry out cooperation based on second-hand luxury goods.
- In June,
Secoo and theComputing Technology Institute of Chinese Academy of Sciences established the “Computing Institute of theChinese Academy of Sciences - Secoo AI Joint Laboratory” to develop smart authentication systems and intelligent content distribution system utilizing big-data and AI technologies.
- During the quarter, the Company upgraded our video content offerings on Secoo App by providing engaging short videos for users when viewing product introductions, increasing user time spent as well as free-to-paid conversion rate on
Secoo . Additionally,Secoo enabled the live streaming function in the app, which allows merchants to launch and sell products more effectively through this popular digital format.
- The Company’s advertising business, Enabling Eco Cloud, continues to grow fast. In the second quarter, Enabling Eco Cloud not only attracted luxury advertisers such as
Rolls-Royce ,Mercedes-Benz , Piaget and TOD’s, but also further expanded cooperation with advertisers across broader industries including travel lifestyle, sports health, 3C digital and maternal and child.
Second Quarter 2019 Financial Results
GMV increased by 95.9% to
Total number of orders increased by 109.4% to 954.8 thousand for the second quarter of 2019 from 455.9 thousand for the second quarter of 2018.
Total revenues for the second quarter of 2019 increased by 40.3% to
Cost of revenues increased by 39.3% to
Operating expenses increased by 63.8% to
Fulfillment expenses increased by 49.8% to
Marketing expenses increased by 70.2% to
Technology and content development expenses increased by 23.7% to
General and administrative expenses increased by 87.6% to
Income from operations was
Non-GAAP income from operations, which excludes share-based compensation expenses, for the second quarter of 2019 was
Income tax expenses were
Net income increased by 10.2% to
Non-GAAP net income, which excludes share-based compensation expenses, was
Net income attributable to ordinary shareholders of
Basic and diluted net income per share were
Non-GAAP basic and diluted net income per share were
Cash and Restricted Cash
As of
Third Quarter 2019 Guidance
The Company currently expects total revenues for the third quarter of 2019 to be in the range of
The above outlook is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change. The Company’s ability to achieve these projections is subject to risks and uncertainties. See “Safe Harbor Statement” at the end of this press release.
Conference Call Information
The Company's management will host an earnings conference call at
The dial-in details for the live conference call are as follows:
United States: | +1-845-675-0437 |
International: | +65-6713-5090 |
Hong Kong: | +852-3018-6771 |
China: | 400-620-8038 |
Conference ID: | 9496898 |
Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.secoo.com.
A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until
United States: | +1-646-254-3697 |
International: | +61-2-8199-0299 |
Hong Kong: | +852-3051-2780 |
China: | 400-632-2162 |
Replay Access Code: | 9496898 |
About
For more information, please visit http://ir.secoo.com.
Use of Non-GAAP Financial Measures
To supplement our consolidated financial statements which are presented in accordance with U.S. GAAP, we also use non-GAAP income from operations, non-GAAP net income attributable to ordinary shareholders of
The use of non-GAAP financial measures has certain limitations. These non-GAAP measures exclude certain items that have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, and should not be considered a substitute for or superior to U.S. GAAP results. In addition, these non-GAAP financial measures may not be comparable to similarly titled measures utilized by other companies since such other companies may not calculate such measures in the same manner as
Reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure is set forth at the end of this release.
Exchange Rate Information
This press release contains translation 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 were made at the exchange rate of
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to
For investor and media inquiries, please contact:
In
Tel: +86 (10) 6588-0135
E-mail: ir@secoo.com
Tel: +86 (10) 6508-0677
E-mail: Secoo@tpg-ir.com
In
The Piacente Group, Inc.
Tel: +1-212-481-2050
E-mail: Secoo@tpg-ir.com
SECOO HOLDING LIMITED | |||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
(All amounts in thousands, except for share data) | |||||||||||||||||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||
2018 | 2019 | 2018 | 2019 | ||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
Revenues: | |||||||||||||||||||
Merchandise sales | 1,192,653 | 1,661,603 | 242,039 | 1,969,020 | 2,785,474 | 405,750 | |||||||||||||
Marketplace and other services | 27,478 | 50,509 | 7,357 | 53,604 | 102,025 | 14,862 | |||||||||||||
Total revenues | 1,220,131 | 1,712,112 | 249,396 | 2,022,624 | 2,887,499 | 420,612 | |||||||||||||
Cost of revenues | (996,410 | ) | (1,388,335 | ) | (202,234 | ) | (1,667,083 | ) | (2,315,492 | ) | (337,289 | ) | |||||||
Gross profit | 223,721 | 323,777 | 47,162 | 355,541 | 572,007 | 83,323 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Fulfillment expenses | (30,154 | ) | (45,173 | ) | (6,580 | ) | (56,684 | ) | (90,821 | ) | (13,230 | ) | |||||||
Marketing expenses | (89,012 | ) | (151,512 | ) | (22,070 | ) | (146,313 | ) | (263,364 | ) | (38,363 | ) | |||||||
Technology and content development expenses | (20,277 | ) | (25,074 | ) | (3,652 | ) | (37,934 | ) | (48,179 | ) | (7,018 | ) | |||||||
General and administrative expenses | (27,645 | ) | (51,850 | ) | (7,553 | ) | (34,679 | ) | (98,092 | ) | (14,289 | ) | |||||||
Total operating expenses | (167,088 | ) | (273,609 | ) | (39,855 | ) | (275,610 | ) | (500,456 | ) | (72,900 | ) | |||||||
Income from operations | 56,633 | 50,168 | 7,307 | 79,931 | 71,551 | 10,423 | |||||||||||||
Other income/(expenses): | |||||||||||||||||||
Interest expense, net | (2,564 | ) | (27,658 | ) | (4,029 | ) | (3,944 | ) | (51,349 | ) | (7,480 | ) | |||||||
Foreign currency exchange losses | (9,700 | ) | (1,429 | ) | (208 | ) | (4,321 | ) | (536 | ) | (78 | ) | |||||||
Others | 2,289 | 22,269 | 3,244 | 11,401 | 46,156 | 6,723 | |||||||||||||
Income before income tax | 46,658 | 43,350 | 6,314 | 83,067 | 65,822 | 9,588 | |||||||||||||
Income tax expenses | (10,286 | ) | (3,283 | ) | (478 | ) | (20,786 | ) | (9,957 | ) | (1,450 | ) | |||||||
Net income | 36,372 | 40,067 | 5,836 | 62,281 | 55,865 | 8,138 | |||||||||||||
Income attributable to redeemable non-controlling interest | 312 | 545 | 80 | 609 | 962 | 140 | |||||||||||||
Income attributable to non-redeemable non-controlling interest | 250 | 1,062 | 155 | 192 | 2,030 | 296 | |||||||||||||
Net income attributable to Secoo Holding Limited | 35,810 | 38,460 | 5,601 | 61,480 | 52,873 | 7,702 | |||||||||||||
Accretion to redeemable non-controlling interest redemption value | - | (133 | ) | (19 | ) | - | (376 | ) | (55 | ) | |||||||||
Net income attributable to ordinary shareholders of Secoo Holding Limited | 35,810 | 38,327 | 5,582 | 61,480 | 52,497 | 7,647 | |||||||||||||
Net income per share | |||||||||||||||||||
— Basic | 1.42 | 1.53 | 0.22 | 2.43 | 2.09 | 0.30 | |||||||||||||
— Diluted | 1.36 | 1.47 | 0.21 | 2.33 | 2.01 | 0.29 | |||||||||||||
Net income per ADS | |||||||||||||||||||
— Basic | 0.71 | 0.76 | 0.11 | 1.22 | 1.04 | 0.15 | |||||||||||||
— Diluted | 0.68 | 0.73 | 0.11 | 1.16 | 1.01 | 0.15 | |||||||||||||
Weighted average number of shares outstanding used in computing net income per share | |||||||||||||||||||
— Basic | 25,280,058 | 25,122,199 | 25,122,199 | 25,280,058 | 25,122,199 | 25,122,199 | |||||||||||||
— Diluted | 26,387,317 | 26,087,022 | 26,087,022 | 26,387,321 | 26,090,272 | 26,090,272 |
SECOO HOLDING LIMITED | ||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(All amounts in thousands, except for share data) | ||||||||||
As of December 31, | As of June 30, | |||||||||
2018 | 2019 | |||||||||
RMB | RMB | US$ | ||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash | 1,034,385 | 828,161 | 120,635 | |||||||
Time deposits | 68,632 | - | - | |||||||
Restricted cash | 89,222 | 89,421 | 13,026 | |||||||
Investment in equity security | 26,032 | - | - | |||||||
Accounts receivable | 119,580 | 131,995 | 19,227 | |||||||
Inventories | 1,712,740 | 2,167,274 | 315,699 | |||||||
Advances to suppliers | 429,219 | 509,293 | 74,187 | |||||||
Prepayments and other current assets | 133,551 | 286,802 | 41,777 | |||||||
Amount due from related parties | 13,284 | 17,574 | 2,560 | |||||||
Total current assets | 3,626,645 | 4,030,520 | 587,111 | |||||||
Non-current assets | ||||||||||
Property and equipment, net | 56,698 | 73,635 | 10,726 | |||||||
Intangible Asset and goodwill | 32,680 | 52,341 | 7,624 | |||||||
Restricted cash | 2,800 | 3,000 | 437 | |||||||
Investment in equity investees | 2,859 | 39,258 | 5,719 | |||||||
Deferred tax assets | 51,214 | 73,698 | 10,735 | |||||||
Operating lease right-of-use assets | - | 155,722 | 22,683 | |||||||
Other non-current assets | 19,030 | 15,029 | 2,189 | |||||||
Total non-current assets | 165,281 | 412,683 | 60,113 | |||||||
Total assets | 3,791,926 | 4,443,203 | 647,224 | |||||||
LIABILITIES | ||||||||||
Current liabilities | ||||||||||
Short-term borrowings and current portion of long-term borrowings | 134,324 | 390,000 | 56,810 | |||||||
Accounts payable | 498,579 | 447,878 | 65,241 | |||||||
Amount due to related parties | 1,564 | 49,992 | 7,282 | |||||||
Advances from customers | 66,954 | 48,677 | 7,091 | |||||||
Accrued expenses and other current liabilities | 352,714 | 504,233 | 73,450 | |||||||
Deferred revenue | 62,478 | 71,077 | 10,354 | |||||||
Total current liabilities | 1,116,613 | 1,511,857 | 220,228 | |||||||
Non-current liabilities | ||||||||||
Long-term borrowings, excluding current portion | 1,151,560 | 1,159,573 | 168,911 | |||||||
Long-term liabilities | 14,240 | 65,357 | 9,520 | |||||||
Non-current operating lease liabilities | - | 120,045 | 17,485 | |||||||
Total non-current liabilities | 1,165,800 | 1,344,975 | 195,916 | |||||||
Total liabilities | 2,282,413 | 2,856,832 | 416,144 | |||||||
Mezzanine Equity | ||||||||||
Redeemable non-controlling interest | 7,587 | 8,925 | 1,300 | |||||||
Total mezzanine equity | 7,587 | 8,925 | 1,300 | |||||||
| | | | | | |||||
Equity: | ||||||||||
Class A Ordinary shares (US$0.001 par value, 150,000,000 shares authorized including class A shares and class B shares, 19,068,224 shares issued and 18,550,770 shares outstanding as of December 31, 2018 and June 30, 2019, respectively) | 126 | 126 | 18 | |||||||
Class B Ordinary shares (US$0.001 par value, 150,000,000 shares authorized including class A shares and class B shares, 6,571,429 shares issued and 6,571,429 shares outstanding as of December 31, 2018 and June 30, 2019, respectively) | 41 | 41 | 6 | |||||||
Treasury Stock (517,454 Class A ordinary shares as of December 31, 2018 and June 30, 2019, respectively, at cost) | (71,018 | ) | (71,018 | ) | (10,345 | ) | ||||
Accumulated losses | (1,280,753 | ) | (1,228,258 | ) | (178,916 | ) | ||||
Additional paid-in capital | 2,839,342 | 2,845,799 | 414,537 | |||||||
Accumulated other comprehensive loss | (6,373 | ) | (1,407 | ) | (205 | ) | ||||
Total equity attributable to ordinary shareholders | 1,481,365 | 1,545,283 | 225,095 | |||||||
Non-redeemable non-controlling interest | 20,561 | 32,163 | 4,685 | |||||||
Total equity | 1,501,926 | 1,577,446 | 229,780 | |||||||
Total liabilities, mezzanine equity and equity | 3,791,926 | 4,443,203 | 647,224 |
SECOO HOLDING LIMITED | |||||||||||||
Reconciliations of GAAP and Non-GAAP Results | |||||||||||||
(All amounts in thousands, except for share and per share data) | |||||||||||||
For the Three Months Ended | For the Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2018 | 2019 | 2018 | 2019 | ||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
Income from operations | 56,633 | 50,168 | 7,307 | 79,931 | 71,551 | 10,423 | |||||||
Add: | |||||||||||||
Share-based compensation expenses | 4,676 | 2,938 | 428 | 13,229 | 6,457 | 941 | |||||||
Non-GAAP income from operations | 61,309 | 53,106 | 7,735 | 93,160 | 78,008 | 11,364 | |||||||
Net Income | 36,372 | 40,067 | 5,836 | 62,281 | 55,865 | 8,138 | |||||||
Add: | |||||||||||||
Share-based compensation expenses | 4,676 | 2,938 | 428 | 13,229 | 6,457 | 941 | |||||||
Non-GAAP net income | 41,048 | 43,005 | 6,264 | 75,510 | 62,322 | 9,079 | |||||||
Net income attributable to ordinary shareholders of Secoo Holding Limited | 35,810 | 38,327 | 5,582 | 61,480 | 52,497 | 7,647 | |||||||
Add: | |||||||||||||
Share-based compensation expenses | 4,676 | 2,938 | 428 | 13,229 | 6,457 | 941 | |||||||
Non-GAAP net income attributable to ordinary shareholders of Secoo Holding Limited | 40,486 | 41,265 | 6,010 | 74,709 | 58,954 | 8,588 | |||||||
| |||||||||||||
Non-GAAP net income per shares: | |||||||||||||
Basic | 1.60 | 1.64 | 0.24 | 2.96 | 2.35 | 0.34 | |||||||
Diluted | 1.53 | 1.58 | 0.23 | 2.83 | 2.26 | 0.33 | |||||||
Non-GAAP net income per ADS: | |||||||||||||
Basic | 0.80 | 0.82 | 0.12 | 1.48 | 1.17 | 0.17 | |||||||
Diluted | 0.77 | 0.79 | 0.12 | 1.42 | 1.13 | 0.16 | |||||||
Weighted average number of shares outstanding used in computing the adjusted net income per share | |||||||||||||
— Basic | 25,280,058 | 25,122,199 | 25,122,199 | 25,280,058 | 25,122,199 | 25,122,199 | |||||||
— Diluted | 26,387,317 | 26,087,022 | 26,087,022 | 26,387,321 | 26,090,272 | 26,090,272 |
Source: Secoo Holding Limited