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Highlights for Third Quarter 2017:
- GMV1 reached
RMB1,394.4 million (US$209.6 million ) for Q3 2017, representing an increase of 65.4% from Q3 2016. - Total number of orders2 was 372.3 thousand for Q3 2017, representing an increase of 61.4% from 230.7 thousand for Q3 2016.
- Number of active customers3 increased by 43.6% to 158 thousand for Q3 2017.
- Total net revenue reached
RMB982.2 million (US$147.6 million ), up 44.2% from Q3 2016. - Gross margin was 17.0% for Q3 2017, compared with 16.2% in Q3 2016.
- Net income increased by 902.9% to
RMB34.1 million (US$5.1 million ) for Q3 2017 compared withRMB3.4 million for Q3 2016. - Non-GAAP net income4 increased by 1,067.6% to
RMB39.7 million (US$6.0 million ) for Q3 2017, fromRMB3.4 million in Q3 2016. - Basic and diluted net loss per share was
RMB0.61 (US$0.09) for Q3 2017, compared withRMB21.58 for Q3 2016. Basic and diluted net loss per American Depositary Share ("ADS") wasRMB0.30 (US$0.05) for Q3 2017, compared withRMB10.79 for Q3 2016. Two ADSs represent one ordinary share. - Basic and diluted non-GAAP net income per share5 was
RMB4.28 (US$0.64) andRMB3.96 (US$0.60) respectively for Q3 2017, compared with basic and diluted non-GAAP net income per share ofRMB0.45 andRMB0.45 , respectively, for Q3 2016. Basic and diluted non-GAAP net income per ADS wasRMB2.14 (US$0.32) andRMB1.98 (US$0.30) respectively for Q3 2017, compared with basic and diluted non-GAAP net income per ADS ofRMB0.22 andRMB0.22 , respectively, for Q3 2016.
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1 GMV is 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 quarter.
2 Total orders are 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 quarter.
3 Active customers are to a customer account that made at least one purchase during the quarter.
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.
5 Basic and diluted non-GAAP net income per share is a non-GAAP financial measure, which is defined as non-GAAP net income, divided by weighted average number of basic and diluted outstanding, including the dilutive effect of share-based awards as determined under the treasury stock method. Basic and diluted Non-GAAP net income per ADS is equal to basic and diluted non-GAAP net income per share divided by two as two ADSs represent one ordinary share.
Commentary
Mr. Richard Rixue Li, Chairman and Chief Executive Officer of
“During the quarter, we continued our efforts to strengthen our partnerships with an increasing number of top-tier brands and sell their products through direct sales and marketplace operations on our platform,” continued Mr. Li. “With more major luxury brands leveraging our platform, we have been constantly building upon our brand creditability to attract more customers. Supported by our trusted and comprehensive global supply chain for upscale products and lifestyle services, we are able to meet the diverse purchase preferences and needs of our customers with ensured authenticity and quality of every product offered on our platform. Looking forward, we will remain focused on expanding our online offerings and offline presence, strengthening brand relationships and enhancing technological capabilities to maintain and improve the superior user experience we deliver to our growing customer base.”
“We are happy that our third quarter results demonstrated robust growth,” said Mr.
Recent Developments
- Since 2016, we have been continuously expanding our partnerships with international and domestic brands bringing our customers more products and greater selection variety. During the third quarter of 2017, we partnered with 11 new international brands, including Armani, Kiton,
Vivienne Westwood , Pinko, Mr & Mrs Italy, etc. We have also signed an exclusive agreement withEuropean Confederation of the Footwear Industry (“CEC”). Pursuant to the agreement, we are authorized to sell to our customers inChina premium footwear brands from CEC’s members, including brands fromItaly ,France ,United Kingdom andSpain and selected other European countries.
- We have been strengthening our product customization and cross-over collaboration with individual brands. During the third quarter of 2017, we collaborated with Dior and launched an exclusive limited edition handbag for Chinese Valentine’s Day. During the same period, we also launched an exclusive product series with two marquee Chinese brands, “Shang-Xia” and “Neiliansheng”. These exclusive products serve to burnish our brand distinction and create positive brand awareness.
- In
July 2017 , we held our 9th anniversary sales promotion, which recorded a 65% increase in GMV compared to the same event in 2016. During the third quarter of 2017, we also launched our new “Secoo Yellow” campaign with new brand image and new “Secoo Yellow” packaging. We believe our new campaign will further enhance our brand appeal and customer experience.
- Many of our customers choose to utilize our Secoo Check service, which allows them to make installment payments for merchandise products purchased on our online platform. For the third quarter of 2017, GMV for merchandise sales using Secoo Check services increased 110% compared with the second quarter of 2017. Secoo Check services not only increase our customers’ payment flexibility, but also increase the volume of user activities on our platform.
- During the third quarter of 2017, we continued our effort to expand our online and offline integrated business model. Furthermore, in
November 2017 we opened a new experience center inQingdao and expect to open four additional experience centers inXiamen ,Tianjin ,Changsha andHangzhou by the end of 2017.
- In
November 2017 , we signed a strategic agreement withOracle , the largest enterprise-level software company in the world andAccenture , the leading management consulting and information technology provider in the world, to implement Oracle’s cloud solutions for our ERP and HCM management systems. Combing with Accenture’s management consulting service, the new system will improve our technical capability, operating efficiency and cross-border business management and ultimately speed up our globalization strategy.
Share Repurchase Program
Third Quarter 2017 Financial Results
GMV increased by 65.4% to
Total number of orders increased by 61.4% from 230.7 thousand for the third quarter of 2016 to 372.3 thousand for the third quarter of 2017.
Total net revenue for the third quarter of 2017 increased by 44.2% to
Cost of revenues increased by 42.8% from
Operating expenses increased by 30.9% to
Fulfillment expenses increased by 26.5% to
Marketing expenses increased by 21.8% to
Technology and content development expenses increased by 15.9% to
General and administrative expenses increased by 82.4% to
Operating income for the third quarter of 2017 was
Income tax expenses increased to
Net income. We recorded a net income of
Non-GAAP net income, which excludes share-based compensation expenses, increased by 1,067.6% to
Net loss attributable to ordinary shareholders of
Basic and diluted net loss per share was
Basic and diluted non-GAAP net income per share was
Cash, Cash Equivalents, and Restricted Cash
As of
Fourth Quarter 2017 Guidance
For the fourth quarter of 2017, the Company currently expects total net revenues to be between
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.
Our 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
Dial-in details for the earnings 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: | 5788627 |
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 hour after the conclusion of the live call until
United States: | +1-646-254-3697 |
International: | +65-2-8199-0299 |
Hong Kong: | +852-3051-2780 |
China: | 400-632-2162 |
Replay Access Code: | 5788627 |
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 net income and basic and dilutive non-GAAP net income per share and ADS as additional non-GAAP financial measures. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance. We define non-GAAP net income as net income excluding share-based compensation. We define non-GAAP net income per share as non-GAAP net income dividing by weighted average number of basic and diluted share outstanding, including the dilutive effect of share-based awards as determined under the treasury stock method. We define basic and diluted non-GAAP net income per ADS as basic and diluted non-GAAP net income per share divided by two as two ADSs represent one ordinary share. We also believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.
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) 5730-6200
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 |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATION | |||||||||||||||||||
(All amounts in thousands, except for share data) |
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For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||||
2016 | 2017 |
2016 | 2017 |
||||||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
Net revenues: | |||||||||||||||||||
Merchandise sales | 672,737 | 966,189 | 145,220 | 1,697,428 | 2,292,574 | 344,577 | |||||||||||||
Marketplace and other services | 8,609 | 15,994 | 2,403 | 17,034 | 36,287 | 5,454 | |||||||||||||
Total net revenues | 681,346 | 982,183 | 147,623 | 1,714,462 | 2,328,861 | 350,031 | |||||||||||||
Cost of revenues | (571,186 | ) | (815,453 | ) | (122,564 | ) | (1,447,635 | ) | (1,935,633 | ) | (290,928 | ) | |||||||
Gross profit | 110,160 | 166,730 | 25,059 | 266,827 | 393,228 | 59,103 | |||||||||||||
Operating expenses: | |||||||||||||||||||
Fulfillment expenses | (20,377 | ) | (25,810 | ) | (3,879 | ) | (61,662 | ) | (61,560 | ) | (9,252 | ) | |||||||
Marketing expenses | (52,790 | ) | (64,282 | ) | (9,662 | ) | (172,152 | ) | (147,733 | ) | (22,204 | ) | |||||||
Technology and content development expenses | (15,075 | ) | (17,522 | ) | (2,634 | ) | (43,761 | ) | (43,290 | ) | (6,507 | ) | |||||||
General and administrative expenses | (15,303 | ) | (27,868 | ) | (4,189 | ) | (54,058 | ) | (57,811 | ) | (8,689 | ) | |||||||
Total operating expenses | (103,545 | ) | (135,482 | ) | (20,364 | ) | (331,633 | ) | (310,394 | ) | (46,652 | ) | |||||||
Income/(Loss) from operations | 6,615 | 31,248 | 4,695 | (64,806 | ) | 82,834 | 12,451 | ||||||||||||
Other income/(expenses): | |||||||||||||||||||
Interest expense, net | (1,157 | ) | (1,839 | ) | (276 | ) | (2,615 | ) | (4,856 | ) | (730 | ) | |||||||
Foreign currency exchange (losses)/gains | (2,097 | ) | 5,471 | 822 | (4,124 | ) | 9,246 | 1,390 | |||||||||||
Income/(Loss) before tax | 3,361 | 34,880 | 5,241 | (71,545 | ) | 87,224 | 13,111 | ||||||||||||
Income tax expense | - | (777 | ) | (117 | ) | - | (777 | ) | (117 | ) | |||||||||
Net income/(loss) | 3,361 | 34,103 | 5,124 | (71,545 | ) | 86,447 | 12,994 | ||||||||||||
Loss attributable to redeemable non-controlling interest | - | 71 | 11 | - | 206 | 31 | |||||||||||||
Loss attributable to non-redeemable non-controlling interest | - | 58 | 9 | - | 173 | 26 | |||||||||||||
Net income/(loss) attributable to Secoo Holding Limited | 3,361 | 34,232 | 5,144 | (71,545 | ) | 86,826 | 13,051 | ||||||||||||
Accretion to redeemable non-controlling interest redemption value | - | (184 | ) | (28 | ) | - | (546 | ) | (82 | ) | |||||||||
Accretion to preferred share redemption value | (165,176 | ) | (39,695 | ) | (5,966 | ) | (421,069 | ) | (202,680 | ) | (30,463 | ) | |||||||
Net loss attributable to ordinary shareholders of Secoo Holding Limited | (161,815 | ) | (5,647 | ) | (850 | ) | (492,614 | ) | (116,400 | ) | (17,494 | ) | |||||||
Net loss per share | |||||||||||||||||||
— Basic | (21.58 | ) | (0.61 | ) | (0.09 | ) | (69.51 | ) | (14.37 | ) | (2.16 | ) | |||||||
— Diluted | (21.58 | ) | (0.61 | ) | (0.09 | ) | (69.51 | ) | (14.37 | ) | (2.16 | ) | |||||||
Net loss per ADS | |||||||||||||||||||
— Basic | (10.79 | ) | (0.30 | ) | (0.05 | ) | (34.75 | ) | (7.19 | ) | (1.08 | ) | |||||||
— Diluted | (10.79 | ) | (0.30 | ) | (0.05 | ) | (34.75 | ) | (7.19 | ) | (1.08 | ) | |||||||
Non-GAAP net income/(loss) per ADS | |||||||||||||||||||
— Basic | 0.22 | 2.14 | 0.32 | (5.03 | ) | 5.68 | 0.85 | ||||||||||||
— Diluted | 0.22 | 1.98 | 0.30 | (5.03 | ) | 5.21 | 0.78 | ||||||||||||
Weighted average number of shares outstanding used in computing net loss per share | |||||||||||||||||||
— Basic | 7,500,000 | 9,274,531 | 9,274,531 | 7,086,954 | 8,098,011 | 8,098,011 | |||||||||||||
— Diluted | 7,500,000 | 9,274,531 | 9,274,531 | 7,086,954 | 8,098,011 | 8,098,011 | |||||||||||||
SECOO HOLDING LIMITED |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
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(All amounts in thousands, except for share data) |
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As of December 31, | As of September 30, | ||||||||||
2016 | 2017 |
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RMB | RMB | US$ | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | 55,555 | 886,168 | 133,192 | ||||||||
Restricted cash | 155,792 | 155,300 | 23,342 | ||||||||
Amount due from related party | - | 284 | 43 | ||||||||
Accounts receivable | 20,992 | 44,766 | 6,728 | ||||||||
Inventories, net | 752,103 | 1,021,620 | 153,551 | ||||||||
Advances to suppliers | 4,108 | 2,609 | 392 | ||||||||
Prepayments and other current assets | 19,887 | 23,007 | 3,458 | ||||||||
Total current assets | 1,008,437 | 2,133,754 | 320,706 | ||||||||
Non-current assets | |||||||||||
Property and equipment, net | 35,196 | 37,893 | 5,695 | ||||||||
Other non-current assets | 2,183 | 8,524 | 1,281 | ||||||||
Total non-current assets | 37,379 | 46,417 | 6,976 | ||||||||
Total assets | 1,045,816 | 2,180,171 | 327,682 | ||||||||
LIABILITIES | |||||||||||
Current liabilities | |||||||||||
Short-term borrowings (including short-term borrowings of consolidated VIEs without recourse to the Company of RMB200,000 and RMB242,065 as of December 31, 2016 and September 30, 2017, respectively.) | 200,000 | 242,065 | 36,383 | ||||||||
Accounts payable (including accounts payable of consolidated VIEs without recourse to the Company of RMB254,537 and RMB268,371 as of December 31, 2016 and September 30, 2017, respectively.) | 274,629 | 306,223 | 46,026 | ||||||||
Amount due to related parties (including amount due to related parties of consolidated VIEs without recourse to the Company of RMB2,319 and RMB1,544 as of December 31, 2016 and September 30, 2017, respectively.) | 2,319 | 1,560 | 234 | ||||||||
Advances from customers (including advances from customers of consolidated VIEs without recourse to the Company of RMB40,891 and RMB20,031 as of December 31, 2016 and September 30, 2017, respectively.) | 42,013 | 21,040 | 3,162 | ||||||||
Accrued expenses and other current liabilities (including accrued expenses and other liabilities of consolidated VIEs without recourse to the Company of RMB194,266 and RMB290,104 as of December 31, 2016 and September 30, 2017, respectively.) | 214,966 | 334,858 | 50,330 | ||||||||
Deferred revenue (including deferred revenue of consolidated VIEs without recourse to the Company of RMB5,254 and RMB9,174 as of December 31, 2016 and September 30, 2017, respectively.) | 5,508 | 9,230 | 1,387 | ||||||||
Total current liabilities | 739,435 | 914,976 | 137,522 | ||||||||
Non-current liabilities | |||||||||||
Long-term borrowing (including long-term borrowing of consolidated VIEs without recourse to the Company of nil and RMB7,090 as of December 31, 2016 and September 30, 2017, respectively.) | - | 7,090 | 1,066 | ||||||||
Total non-current liabilities | - | 7,090 | 1,066 | ||||||||
Total liabilities | 739,435 | 922,066 | 138,588 | ||||||||
Mezzanine Equity | |||||||||||
Series A-1 Redeemable Convertible Preferred Shares (US$0.001 par value, 1,250,000 shares authorized, issued and outstanding as of December 31, 2016 and nil as of September 30, 2017, Redemption value of RMB180,216 and nil as of December 31, 2016 and September 30, 2017; Liquidation value of RMB125,060 and nil as of December 31, 2016 and September 30, 2017) | 134,719 | - | - | ||||||||
Series A-2 Redeemable Convertible Preferred Shares (US$0.001 par value, 1,428,572 shares authorized, issued and outstanding as of December 31, 2016 and nil as of September 30, 2017, Redemption value of RMB205,966 and nil as of December 31, 2016 and September 30, 2017; Liquidation value of RMB142,923 and nil as of December 31, 2016 and September 30, 2017) | 152,097 | - | - | ||||||||
Series B Redeemable Convertible Preferred Shares (US$0.001 par value, 2,380,952 shares authorized, issued and outstanding as of December 31, 2016 and nil as September 30, 2017, Redemption value of RMB343,409 and nil as of December 31, 2016 and September 30, 2017; Liquidation value of RMB323,077 and nil as of December 31, 2016 and September 30, 2017) | 293,455 | - | - | ||||||||
Series C Redeemable Convertible Preferred Shares (US$0.001 par value, 1,571,973 shares authorized, issued and outstanding as of December 31, 2016 and nil as of September 30, 2017, Redemption value of RMB227,596 and nil as of December 31, 2016 and September 30, 2017; Liquidation value of RMB263,065 and nil as of December 31, 2016 and September 30, 2017) | 197,987 | - | - | ||||||||
Series D Redeemable Convertible Preferred Shares (US$0.001 par value, 3,178,652 shares authorized, issued and outstanding as of December 31, 2016 and nil as of September 30, 2017, Redemption value of RMB495,579 and nil as of December 31, 2016 and September 30, 2017; Liquidation value of RMB655,720 and nil as of December 31, 2016 and September 30, 2017) | 438,683 | - | - | ||||||||
Series E Redeemable Convertible Preferred Shares (US$0.001 par value, 2,925,658 shares authorized, issued and outstanding as of December 31, 2016 and nil as of September 30, 2017, Redemption value of RMB598,531 and nil as of December 31, 2016 and September 30, 2017; Liquidation value of RMB839,363 and nil as of December 31, 2016 and September 30, 2017) | 532,511 | - | - | ||||||||
Redeemable non-controlling interest | 5,082 | 5,458 | 820 | ||||||||
Total mezzanine equity | 1,754,534 | 5,458 | 820 | ||||||||
Deficit: | |||||||||||
Ordinary shares (US$0.001 par value, 37,264,193 shares authorized as of December 31, 2016 and September 30, 2017; 7,500,000 shares and 25,639,653 issued and outstanding as of December 31, 2016 and September 30, 2017) | 47 | 167 | 25 | ||||||||
Accumulated losses | (1,363,165 | ) | (1,479,564 | ) | (222,381 | ) | |||||
Additional paid-in capital | - | 2,722,859 | 409,249 | ||||||||
Accumulated other comprehensive loss | (87,072 | ) | 7,330 | 1,102 | |||||||
Total deficit attributable to ordinary shareholders | (1,450,190 | ) | 1,250,792 | 187,995 | |||||||
Non-redeemable non-controlling interest | 2,037 | 1,855 | 279 | ||||||||
Total deficit | (1,448,153 | ) | 1,252,647 | 188,274 | |||||||
Total liabilities, mezzanine equity and deficit | 1,045,816 | 2,180,171 | 327,682 | ||||||||
SECOO HOLDING LIMITED |
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Reconciliations of GAAP and Non-GAAP Results |
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(All amounts in thousands, except for share and per share data) | ||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | 2017 | 2016 | 2017 | |||||||||||||
RMB | RMB | US$ | RMB | RMB | US$ | |||||||||||
Net income/(loss) | 3,361 | 34,103 | 5,124 | (71,545 | ) | 86,447 | 12,994 | |||||||||
Add: | ||||||||||||||||
Share-based compensation expense | - | 5,549 | 834 | 249 | 5,549 | 834 | ||||||||||
Adjusted net income/(loss) | 3,361 | 39,652 | 5,958 | (71,296 | ) | 91,996 | 13,828 | |||||||||
Adjusted net income/(loss) per weighted average shares: | ||||||||||||||||
Basic | 0.45 | 4.28 | 0.64 | (10.06 | ) | 11.36 | 1.71 | |||||||||
Diluted | 0.45 | 3.96 | 0.60 | (10.06 | ) | 10.42 | 1.57 | |||||||||
Adjusted net income/(loss) per ADS: | ||||||||||||||||
Basic | 0.22 | 2.14 | 0.32 | (5.03 | ) | 5.68 | 0.85 | |||||||||
Diluted | 0.22 | 1.98 | 0.30 | (5.03 | ) | 5.21 | 0.78 | |||||||||
Weighted average number of shares outstanding used in computing the adjusted net income/( loss) per share | ||||||||||||||||
— Basic | 7,500,000 | 9,274,531 | 9,274,531 | 7,086,954 | 8,098,011 | 8,098,011 | ||||||||||
— Diluted | 7,500,000 | 10,007,076 | 10,007,076 | 7,086,954 | 8,830,556 | 8,830,556 | ||||||||||