Secoo Reports Unaudited First Half 2021 Financial Results
BEIJING, Dec. 30, 2021 (GLOBE NEWSWIRE) -- Secoo Holding Limited (“Secoo”, the “Company” or “We”) (NASDAQ: SECO), Asia's leading online integrated upscale products and services platform, today announced its unaudited financial results for the six months ended June 30, 2021.
Highlights for First Half 2021:
GMV1 reached RMB5,027.8 million (US$778.7 million) for 1H 2021, compared with RMB6,108.0 million for 1H 2020.
Total number of orders2 was 1,440.1 thousand for 1H 2021, compared with 1,751.0 thousand for 1H 2020.
Number of active customers3 was 568.9 thousand for 1H 2021, compared with 658.7 thousand for 1H 2020.
Total revenues were RMB1,525.6 million (US$236.3 million) for 1H 2021, compared with RMB2,311.5 million for 1H 2020.
Gross Margin reached 19.8% for 1H 2021, compared with 16.0% for 1H 2020.
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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 canceled during the period presented.
2 Total orders refer 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 canceled during the period presented.
3 Active customer refers to a customer who made at least one account purchase during the period presented.
Commentary
Mr. Richard Rixue Li, Chairman and Chief Executive Officer of Secoo, said, “During the first half 2021, we continued to optimize our operations to deliver a superior upscale shopping experience for our customers. We spearheaded efforts to further enhance digitalization capabilities, sharpen product differentiation and manage sustainability in luxury supply chains, in order to cater to the discerning needs of Chinese consumers amid a challenging macro environment.
“We are excited to see our online-and-offline integrated platform increasingly favored by a large, active and engaged audience, as we remain dedicated to supply chain enrichment and technology advancement. Going forward, we will persist in our firm commitment to our business model and growth strategy. Aligned with our value proposition, we will provide a richer and more diversified product portfolio, deepening brand relationships across the globe, enhancing our worldwide supply chain system and heightening technological empowerment for customers and brands,” Mr. Li concluded.
Mr. Shaojun Chen, Chief Financial Officer of Secoo, said, “Amid an evolving market landscape, we sharpened up our cost control to drive the sustainable and healthy development of our core business. Our focus going forward is to continue balancing profitability by increasing operating efficiency while honing our suite of luxury selections. Moreover, we will strengthen our influence across the value chain in the online luxury retail industry to further solidify our position as a leading player in the market, both in China and internationally.”
Business Development Highlights
In March 2021, Secoo partnered with London’s iconic department store Liberty to launch the LIBERTY x SECOO co-branded gift box in celebration of the Chinese goddess festival. Simultaneously, Liberty and Secoo co-hosted an offline exhibition for Liberty collections at Secoo HQs Club. This two-week event took place this spring and marked Liberty’s debut exhibition in China, an event that allowed Chinese consumers to experience and better enjoy this iconic brand.
In May 2021, Secoo unveiled its Hainan International Business Strategy at the inaugural China International Consumer Products Expo. Since 2020, when the Ministry of Finance (MOF) announced that Hainan could include new products on its duty-free list and raise its tax-free shopping quota, Hainan has gained strong momentum. Meanwhile, Yangpu port in Hainan Island will be developed into an international container hub port in southern China, under the country’s 14th five-year plan. With its new Hainan strategy, Secoo strives to capitalize on the tremendous opportunities presented by Hainan’s free trade port-driven development.
In May 2021, Secoo entered a strategic partnership agreement with the Zhuhai Duty Free Group to leverage respective resources and strengths in the high-end supply chain. Pursuant to the strategic agreement, both parties will establish a resource sharing mechanism in the areas of supply chain systems, marketing promotion, and livestreaming shopping.
In May 2021, Secoo formed the strategic partnership agreement with Hainan Province Transport Investment Holding Company Limited and Hainan Expressway. The signing parties will work together on a variety of areas including consumer finance, supply chain, bonded goods distribution and SaaS.
In May 2021, Secoo assisted an array of international luxury brands, such as Bedat & Co, Selmark and Allegri, to launch new products at the inaugural China International Consumer Products Expo. These efforts not only provided an exhibition platform for a stunning selection of fashion from all over the world, but also facilitated overseas brands’ entry into the Chinese market.
First Half 2021 Financial Results
GMV was RMB5,027.8 million (US$778.7 million) for the first six months of 2021, compared with RMB6,108.0 million for the same period in 2020.
Total number of orders was 1,440.1 thousand for the first six months of 2021, compared with 1,751.0 thousand for the same period in 2020.
Total revenues for the first six months of 2021 were RMB1,525.6 million (US$236.3 million), compared with RMB2,311.5 million for the same period in 2020. This decrease was primarily attributable to a slowdown in demand of discretionary spending and delayed logistics services worldwide due to the lingering impact of global COVID-19 pandemic, as well as the increasing proportion of marketplace businesses in the revenue mix.
Cost of revenues for the first six months of 2021 decreased by 37.0% to RMB1,223.1 million (US$189.4 million) for the first six months of 2021 from RMB1,941.1 million for the same period in 2020, primarily due to the decrease in total revenues.
Gross profit was RMB302.5 million (US$46.9 million) for the first six months of 2021, compared with RMB370.4 million for the same period in 2020.
Gross Margin reached 19.8% for the first six months of 2021, compared with 16.0% for the same period in 2020.
Operating expenses for the first six months of 2021 decreased by 13.0% to RMB310.9 million (US$48.1 million) from RMB357.1 million for the same period in 2020.
Fulfillment expenses for the first six months of 2021 slightly decreased by 0.2% to RMB83.2 million (US$12.9 million) from RMB83.4 million for the same period in 2020.
Marketing expenses for the first six months of 2021 decreased by 14.3% to RMB118.0 million (US$18.3 million) from RMB137.7 million for the same period in 2020. The decrease was primarily due to reduced rent expenses, as well as decreased staff costs.
Technology and content development expenses for the first six months of 2021 slightly decreased by 0.4% to RMB54.5 million (US$8.4 million) from RMB54.7 million for the same period in 2020.
General and administrative expenses for the first six months of 2021 decreased by 32.2% to RMB55.1 million (US$8.5 million) from RMB81.4 million for the same period in 2020. The decrease was primarily attributable to decreased consulting service fees and office rental expenses.
Loss from operations for the first six months of 2021 was RMB8.3 million (US$1.3 million), compared with an income of RMB13.3 million for the same period in 2020.
Non-GAAP loss from operations, which excludes share-based compensation expenses, was RMB6.0 million (US$0.9 million) for the first six months of 2021, compared with non-GAAP income from operations of RMB18.3 million for the same period in 2020.
Income tax benefit was RMB15.1 million (US$2.3 million) for the first six months of 2021, compared with RMB4.6 million for the same period in 2020.
Net loss was RMB39.8 million (US$6.2 million) for the first six months of 2021, compared with RMB36.6 million for the same period in 2020.
Non-GAAP net loss, which excludes share-based compensation expenses, was RMB37.5 million (US$5.8 million) for the first six months of 2021, compared with RMB31.5 million for the same period in 2020.
Net loss attributable to ordinary shareholders of Secoo Holding Limited for the first six months of 2021 was RMB40.9 million (US$6.3 million), compared with RMB36.1 million for the same period in 2020.
Basic and diluted net loss per share were both RMB1.16 (US$0.18) for the first six months of 2021, compared with RMB1.40 for the same period in 2020. Basic and diluted net loss per American depositary share (“ADS”) were both RMB0.58 (US$0.09) for the first six months of 2021, compared with RMB0.70 for the same period in 2020.
Non-GAAP basic and diluted net loss per share were both RMB1.09 (US$0.17) for the first six months of 2021, compared with RMB1.20 for the same period in 2020. Non-GAAP basic and diluted net loss per ADS were both RMB0.55 (US$0.09) for the first six months of 2021, compared with RMB0.60 for the same period in 2020.
Cash and Restricted Cash
As of June 30, 2021, the Company had cash, cash equivalents and restricted cash of RMB407.4 million (US$63.1 million).
About Secoo Holding Limited
Secoo Holding Limited (“Secoo”) is Asia’s leading online integrated upscale products and services platform. Secoo provides customers a wide selection of authentic upscale products and lifestyle services on the Company’s integrated online and offline shopping platform which consists of the Secoo.com website, mobile applications and offline experience centers, offering over 420,000 SKUs, covering over 3,800 global and domestic brands. Supported by the Company’s proprietary database of upscale products, authentication procedures and brand cooperation, Secoo is able to ensure the authenticity and quality of every product offered on its platform.
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, non-GAAP net income attributable to ordinary shareholders of Secoo Holding Limited, and non-GAAP basic and diluted 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 income from operations as income from operations excluding share-based compensation expenses. We define non-GAAP net income as net income excluding share-based compensation expenses. We define non-GAAP net income per share as non-GAAP net income attributable to ordinary shareholders of Secoo Holding Limited 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 non-GAAP basic and diluted net income per ADS as non-GAAP basic and diluted 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 Secoo does.
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 the 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 RMB6.4566 to US$1.0, the noon buying rate in New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York in effect as of June 30, 2021.
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 Secoo management quotes and the Company’s financial outlook. These forward-looking statements can be identified by terminology such as “will,” “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “intend,” “potential,” “plan,” “goal” and similar statements. Secoo Holding Limited may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These forward-looking statements include, but are not limited to, statements about: the Company’s goals and strategies; its future business development, financial condition and results of operations; its ability to attract and retain new customers and to increase revenues generated from repeat customers; its expectations regarding demand for and market acceptance of its products and services; trends and competition in China’s e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of the Chinese e-commerce market; Chinese governmental policies relating to the Company’s industry and general economic conditions in China. For additional information on these and other important factors that could adversely affect the Company's business, financial condition, results of operations and prospects, please see its filings with the U.S. Securities and Exchange Commission.
For investor and media inquiries, please contact:
In China:
Secoo Holding Limited
Jingbo Ma
Tel: +86 (10) 6588-0135
E-mail: ir@secoo.com
The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: Secoo@tpg-ir.com
In the United States:
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: Secoo@tpg-ir.com
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |
(All amounts in thousands, except for share data) |
For the Six Months Ended June 30, | |||||||||
2020 | 2021 | ||||||||
RMB | RMB | US$ | |||||||
Revenues: | |||||||||
Merchandise sales | 2,222,542 | 1,424,859 | 220,683 | ||||||
Marketplace and other services | 88,969 | 100,762 | 15,606 | ||||||
Total revenues | 2,311,511 | 1,525,621 | 236,289 | ||||||
Cost of revenues | (1,941,148 | ) | (1,223,099 | ) | (189,434 | ) | |||
Gross profit | 370,363 | 302,522 | 46,855 | ||||||
Operating expenses: | |||||||||
Fulfillment expenses | (83,364 | ) | (83,188 | ) | (12,884 | ) | |||
Marketing expenses | (137,671 | ) | (118,029 | ) | (18,280 | ) | |||
Technology and content development expenses | (54,699 | ) | (54,492 | ) | (8,440 | ) | |||
General and administrative expenses | (81,378 | ) | (55,148 | ) | (8,541 | ) | |||
Total operating expenses | (357,112 | ) | (310,857 | ) | (48,145 | ) | |||
Income/(loss) from operations | 13,251 | (8,335 | ) | (1,290 | ) | ||||
Other income (expenses): | |||||||||
Interest income | 2,555 | 568 | 88 | ||||||
Interest expense | (64,108 | ) | (60,727 | ) | (9,405 | ) | |||
Foreign currency exchange loss | (1,845 | ) | (942 | ) | (146 | ) | |||
Change in fair value of financial instruments | (1,395 | ) | - | - | |||||
Others | 10,393 | 14,494 | 2,245 | ||||||
Loss before income tax | (41,149 | ) | (54,942 | ) | (8,508 | ) | |||
Income tax benefits | 4,551 | 15,116 | 2,341 | ||||||
Net loss | (36,598 | ) | (39,826 | ) | (6,167 | ) | |||
Less: Gain attributable to redeemable non-controlling interest | 318 | 964 | 149 | ||||||
Less: Loss attributable to non-redeemable non-controlling interest | (1,083 | ) | (167 | ) | (26 | ) | |||
Net loss attributable to Secoo Holding Limited | (35,833 | ) | (40,623 | ) | (6,290 | ) | |||
Accretion to redeemable non-controlling interest redemption value | (250 | ) | (248 | ) | (38 | ) | |||
Net loss attributable to ordinary shareholders of Secoo Holding | (36,083 | ) | (40,871 | ) | (6,328 | ) | |||
Net loss per share | |||||||||
— Basic | (1.40 | ) | (1.16 | ) | (0.18 | ) | |||
— Diluted | (1.40 | ) | (1.16 | ) | (0.18 | ) | |||
Net loss per ADS | |||||||||
— Basic | (0.70 | ) | (0.58 | ) | (0.09 | ) | |||
— Diluted | (0.70 | ) | (0.58 | ) | (0.09 | ) | |||
Weighted average number of shares outstanding used in | |||||||||
— Basic | 25,851,062 | 35,326,281 | 35,326,281 | ||||||
— Diluted | 25,851,062 | 35,326,281 | 35,326,281 | ||||||
SECOO HOLDING LIMITED |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
(All amounts in thousands, except for share data) |
As of | As of | |||||||||
2020 | 2021 | |||||||||
RMB | RMB | US$ | ||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and cash equivalents | 639,932 | 316,606 | 49,036 | |||||||
Restricted cash | 85,826 | 88,592 | 13,721 | |||||||
Accounts receivable, net | 99,228 | 51,301 | 7,946 | |||||||
Inventories | 3,289,804 | 3,286,909 | 509,077 | |||||||
Advances to suppliers | 400,186 | 340,637 | 52,758 | |||||||
Prepayments and other current assets | 492,927 | 525,220 | 81,346 | |||||||
Amounts due from related parties | — | 19 | 3 | |||||||
Total current assets | 5,007,903 | 4,609,284 | 713,887 | |||||||
Non-current assets | ||||||||||
Property and equipment, net | 73,027 | 64,492 | 9,989 | |||||||
Restricted cash | 3,846 | 2,249 | 348 | |||||||
Investment in equity investees | 57,189 | 56,949 | 8,820 | |||||||
Deferred tax assets | 82,896 | 104,199 | 16,138 | |||||||
Goodwill | 807 | 807 | 125 | |||||||
Operating lease right-of-use assets | 105,938 | 90,419 | 14,004 | |||||||
Other non-current assets | 10,817 | 17,682 | 2,739 | |||||||
Total non-current assets | 334,520 | 336,797 | 52,163 | |||||||
Total assets | 5,342,423 | 4,946,081 | 766,050 | |||||||
LIABILITIES | ||||||||||
Current liabilities | ||||||||||
Short-term borrowings and current portion of long-term | 191,289 | 118,816 | 18,402 | |||||||
Accounts payable | 348,154 | 438,123 | 67,857 | |||||||
Amounts due to related parties | 62 | — | — | |||||||
Advances from customers | 96,134 | 119,638 | 18,530 | |||||||
Income taxes payable | 77,361 | 55,840 | 8,648 | |||||||
Accrued expenses and other current liabilities | 742,365 | 484,860 | 75,093 | |||||||
Deferred revenue | 221,704 | 35,162 | 5,446 | |||||||
Operating lease liabilities | 40,204 | 35,020 | 5,424 | |||||||
Total current liabilities | 1,717,273 | 1,287,459 | 199,400 | |||||||
Non-current liabilities | ||||||||||
Long-term borrowings, excluding current portion | 1,128,004 | 1,148,086 | 177,816 | |||||||
Operating lease liabilities | 70,427 | 57,719 | 8,940 | |||||||
Long-term liabilities | 109,493 | 161,529 | 25,018 | |||||||
Total non-current liabilities | 1,307,924 | 1,367,334 | 211,774 | |||||||
Total liabilities | 3,025,197 | 2,654,793 | 411,174 | |||||||
Mezzanine Equity | ||||||||||
Redeemable non-controlling interest | 10,010 | 11,193 | 1,734 | |||||||
Total mezzanine equity | 10,010 | 11,193 | 1,734 | |||||||
Equity: | ||||||||||
Class A Ordinary shares (US$0.001 par value, 150,000,000 | 198 | 198 | 31 | |||||||
Class B Ordinary shares (US$0.001 par value, 150,000,000 | 41 | 41 | 6 | |||||||
Treasury Stock (517,454 Class A ordinary shares as of | (71,018 | ) | (71,018 | ) | (10,999 | ) | ||||
Additional paid-in capital | 3,560,008 | 3,562,367 | 551,740 | |||||||
Accumulated losses | (1,206,436 | ) | (1,247,307 | ) | (193,183 | ) | ||||
Accumulated other comprehensive loss | 35,923 | 46,783 | 7,246 | |||||||
Total equity attributable to ordinary shareholders | 2,318,716 | 2,291,064 | 354,841 | |||||||
Non-redeemable non-controlling interest | (11,500 | ) | (10,969 | ) | (1,699 | ) | ||||
Total shareholders' equity | 2,307,216 | 2,280,095 | 353,142 | |||||||
| | | | |||||||
Total liabilities, mezzanine equity and shareholders' equity | 5,342,423 | 4,946,081 | 766,050 | |||||||
SECOO HOLDING LIMITED | ||||||||||||||||||
Reconciliations of GAAP and Non-GAAP Results | ||||||||||||||||||
(All amounts in thousands, except for share and per share data) | ||||||||||||||||||
For the Six Months Ended | ||||||||||||||||||
June 30, | ||||||||||||||||||
2020 | 2021 | |||||||||||||||||
RMB | RMB | US$ | ||||||||||||||||
Income\(loss) from operations | 13,251 | (8,335 | ) | (1,290 | ) | |||||||||||||
Add: Share-based compensation expenses | 5,091 | 2,359 | 365 | |||||||||||||||
Non-GAAP income\(loss) from operations | 18,342 | (5,976 | ) | (925 | ) | |||||||||||||
Net Loss | (36,598 | ) | (39,826 | ) | (6,167 | ) | ||||||||||||
Add: Share-based compensation expenses | 5,091 | 2,359 | 365 | |||||||||||||||
Non-GAAP net loss | (31,507 | ) | (37,467 | ) | (5,802 | ) | ||||||||||||
Net loss attributable to ordinary shareholders of Secoo | ( 36,083 | ) | (40,871 | ) | (6,328 | ) | ||||||||||||
Add: Share-based compensation expenses | 5,091 | 2,359 | 365 | |||||||||||||||
Non-GAAP net loss attributable to ordinary shareholders of | (30,992 | ) | (38,512 | ) | (5,963 | ) | ||||||||||||
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Non-GAAP net loss per share: | ||||||||||||||||||
Basic | (1.20 | ) | (1.09 | ) | (0.17 | ) | ||||||||||||
Diluted | (1.20 | ) | (1.09 | ) | (0.17 | ) | ||||||||||||
Non-GAAP net loss per ADS: | ||||||||||||||||||
Basic | (0.60 | ) | (0.55 | ) | (0.09 | ) | ||||||||||||
Diluted | (0.60 | ) | (0.55 | ) | (0.09 | ) | ||||||||||||
Weighted average number of shares outstanding used in | ||||||||||||||||||
— Basic | 25,851,062 | 35,326,281 | 35,326,281 | |||||||||||||||
— Diluted | 25,851,062 | 35,326,281 | 35,326,281 | |||||||||||||||
