Yunji Announces Third Quarter 2020 Unaudited Financial Results
HANGZHOU, China, Nov. 26, 2020 (GLOBE NEWSWIRE) — Yunji Inc. (“Yunji” or the “Company”) (NASDAQ: YJ), a leading membership-based social e-commerce platform, today announced its unaudited financial results for the third quarter ended September 30, 20201.
Third Quarter 2020 HighlightsGMV2 in the third quarter of 2020 was RMB9.4 billion (US$1.4 billion), compared with RMB9.2 billion in the same period of 2019. GMV related to marketplace revenues in the third quarter of 2020 was RMB7.3 billion (US$1.1 billion), compared with RMB3.2 billion in the same period of 20195.Total revenues in the third quarter of 2020 were RMB1,066.7 million (US$157.1 million), compared with RMB2,773.1 million in the same period of 2019, primarily due to an increase in the proportion of the Company’s business contributed from its marketplace business, which recognizes revenues on a net basis.Transacting members3 in the twelve months ended September 30, 2020, continued to increase to 13.0 million due to the Company’s ongoing refinement of its membership enrollment system since January 2020.Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, “During the third quarter of 2020, we continued to focus on developing our differentiated supply chain management, promoting fast-moving merchandise with high repeat purchase rates, and supporting small specialty businesses to better serve our e-commerce community. At the same time, we made meaningful progress in the establishment of innovative marketing channels and utilized diverse content formats, such as short-form video and live streaming, to better present and promote those products sourced from our quality supply chain. Going forward, we plan to further leverage our supply chain’s competitive advantages in cost control and operational efficiency, establish collaborations with top-tier and mid-tier streamers to introduce more products to our e-commerce community, and provide support and resources to more of those joint-venture brands and emerging brands with high growth potential. Consequently, the success of these brands will help to continue fueling the growth and profitability of our own platform.”“Our third quarter financial results demonstrated the effectiveness of our cost control measures. On a year-over-year basis, we narrowed our loss from operations by 79.3% and our net loss by 14.9% in the third quarter. We also continued to improve our cost structures, maintain our strong cash reserves, and advance towards our goal of achieving healthy, profitable, and sustainable growth. Additionally, to meet our operational and liquidity needs, we continued to closely and proactively monitor our cash flow, making a consistent effort to secure increasingly favorable terms for Yunji in our settlement of payments while also sustaining a healthy level of working capital,” said Mr. Chen Chen, Chief Financial Officer of Yunji.Third Quarter 2020 Unaudited Financial ResultsTotal revenues were RMB1,066.7 million (US$157.1 million), compared with RMB2,773.1 million in the same period of 2019, primarily due to a decrease in revenues from sales of merchandise as a result of an increase in the proportion of the Company’s business contributed from its marketplace business. Revenues generated through the marketplace business are recognized on a net basis and contributed to marketplace revenues, while revenues generated from merchandise sales are recognized on a gross basis and contributed to sales of merchandise, net.Revenues from sales of merchandise, net, decreased by 62.8% to RMB919.0 million (US$135.4 million) from RMB2,472.0 million in the same period of 2019. The decrease was primarily due to the decrease in GMV related to merchandise sales as the Company continued to refine its resource allocation plan to further improve the operational efficiencies of its marketplace business on the platform.Revenues from the membership program were RMB4.9 million (US$0.7 million), compared with RMB206.7 million in the same period of 2019. The decrease was due to the Company’s ongoing refinement of its membership enrollment system. Beginning in January 2020, the Company has allowed any user to become a member and enjoy membership benefits free of charge for one year by simply registering for an account on the Yunji app. Revenues from the membership program in the third quarter of 2020 were from the deferred revenue of prior paying members.Revenues from the marketplace business increased by 51.1% to RMB130.4 million (US$19.2 million) from RMB86.3 million in the same period of 2019 as a result of the increased number of popular brands and merchants on the Company’s platform and the increased sales from a diverse range of sales channels on other platforms.Other revenues increased by 52.9% to RMB12.3 million (US$1.8 million) from RMB8.0 million in the same period of 2019 as a result of an increase in warehousing and logistic services provided to third parties.Total cost of revenues decreased by 67.0% to RMB751.7 million (US$110.7 million) from RMB2,280.4 million in the same period of 2019. The decrease was mainly attributable to the decline in merchandise sales, which recognize revenues on a gross basis. Total cost of revenues was mainly comprised of those costs related to the sales of merchandise revenue in the third quarter of 2020 as a result of launching the free membership program in January 2020.Total operating expenses decreased by 46.0% to RMB343.6 million (US$50.6 million) from RMB636.4 million in the same period of 2019.Fulfillment expenses decreased by 55.7% to RMB90.5 million (US$13.3 million), or 8.5% of total revenues, from RMB204.2 million, or 7.4% of total revenues, in the same period of 2019. The decrease was primarily attributable to: (i) reduced warehousing and logistics expenses due to lower merchandise sales and improved logistics efficiency, (ii) decreased third-party payment transaction fees due to lower commission rates, and (iii) reduced personnel costs due to headcount optimization.Sales and marketing expenses decreased by 42.9% to RMB158.9 million (US$23.4 million), or 14.9% of total revenues, from RMB278.4 million, or 10.0% of total revenues, in the same period of 2019. The decrease was mainly due to the reduction in member management fees as a result of improvements to member management efficiency.Technology and content expenses decreased by 53.0% to RMB42.3 million (US$6.2 million), or 4.0% of total revenues, from RMB90.1 million, or 3.2% of total revenues, in the same period of 2019. The decrease was mainly due to: (i) reduced server costs resulting from the better contract terms that the Company secured with its server providers, and (ii) reduced personnel costs as a result of headcount optimization.General and administrative expenses decreased by 18.6% to RMB51.8 million (US$7.6 million), or 4.9% of total revenues, from RMB63.7 million, or 2.3% of total revenues, in the same period of 2020. The decrease was mainly due to decreased share-based compensation expenses, including a reversal of share-based compensation expenses of RMB19.1 million that had been recognized in prior periods, and reduced other personnel costs as a result of headcount optimization.Loss from operations was RMB24.4 million (US$3.6 million), compared with RMB118.0 million in the same period of 2019.Net loss was RMB43.6 million (US$6.4 million), compared with RMB51.3 million in the same period of 2019.Adjusted net loss4 was RMB36.4 million (US$5.4 million), compared with RMB24.9 million in the same period of 2019.Basic and diluted net loss per share attributable to ordinary shareholders was RMB0.02 (US$0.003), compared with RMB0.02 in the same period of 2019.Recent Developments
Today, the Company announced that Mr. Chen Chen has resigned from his position as the Company’s Chief Financial Officer due to personal reasons, effective December 31, 2020. The Company is grateful for Mr. Chen’s valuable contribution to the Company during his term with the Company. In addition, the Company announced the promotion of Mr. Chengqi Zhang to Vice President of Finance. His responsibilities at Yunji have primarily included corporate finance, tax, funding, internal controls, legal and compliance.Mr. Zhang first joined Yunji in November 2019. Prior to joining the Company, Mr. Zhang had been an audit director at Deloitte since 2007. Mr. Zhang is a member of the American Institute of Certified Public Accountants (AICPA). Mr. Zhang received a Bachelor’s degree from Shanghai University of Finance And Economics.Use of Non-GAAP Financial MeasuresIn evaluating the business, the Company considers and uses adjusted net income/(loss) as a supplemental measure to review and assess operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted net income/(loss) as net income/(loss) excluding share-based compensation.The Company presents adjusted net income/(loss) because it is used by management to evaluate operating performance and formulate business plans. Adjusted net income/(loss) enables management to assess operating performance without considering the impact of share-based compensation recorded under ASC 718, “Compensation-Stock Compensation”. The Company also believes that the use of this non-GAAP measure facilitates investors’ assessment of operating performance.This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net income/(loss) is that it does not reflect all items of income and expense that affect the Company’s operations. Share-based compensation has been and may continue to be incurred in Yunji’s business and is not reflected in the presentation of adjusted net income/(loss). Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited.The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. Yunji encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.For more information on the non-GAAP financial measures, please see the table captioned “Reconciliation of Non-GAAP Measures to The Most Directly Comparable Financial Measures” set forth at the end of this press release.Conference CallThe Company will host a conference call on Thursday, November 26, 2020, at 7:00 AM Eastern Time or 8:00 PM Beijing/Hong Kong Time to discuss its earnings.In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive important details for this conference including the call date and time, a unique registrant ID, and a set of participant dial-in numbers to join the conference call.A telephone replay of the call will be available after the conclusion of the conference call for one week.Dial-in numbers for the replay are as follows:Safe Harbor StatementsThis 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 “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the quotations from management in this announcement, as well as Yunji’s strategic and operational plans, contain forward-looking statements. Yunji may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), 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. Statements that are not historical facts, including but not limited to statements about Yunji’s beliefs and expectations, are 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: Yunji’s growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China’s e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of China’s e-commerce market; PRC governmental policies and regulations relating to Yunji’s industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Yunji’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Yunji undertakes no obligation to update any forward-looking statement, except as required under applicable law.About Yunji Inc.Yunji Inc. is a leading social e-commerce platform in China that has pioneered a unique, membership-based model to leverage the power of social interactions. The Company’s e-commerce platform offers high-quality products at attractive prices across a wide variety of categories catering to the day-to-day needs of Chinese consumers. In addition, the Company uses advanced technologies including big data and artificial intelligence to optimize user experience and incentivize members to promote the platform as well as share products with their social contacts. Through deliberate product curation, centralized merchandise sourcing, and efficient supply chain management, Yunji has established itself as a trustworthy e-commerce platform with high-quality products and exclusive membership benefits, including discounted prices.For more information, please visit https://investor.yunjiglobal.com/Investor Relations ContactYunji Inc.
Investor Relations
Email: Yunji.IR@icrinc.com
Phone: +1 (646) 224-6957ICR, Inc.
Xinran Rao
Email: Yunji.IR@icrinc.com
Phone: +1 (646) 224-6957
__________________________
Third Quarter 2020 HighlightsGMV2 in the third quarter of 2020 was RMB9.4 billion (US$1.4 billion), compared with RMB9.2 billion in the same period of 2019. GMV related to marketplace revenues in the third quarter of 2020 was RMB7.3 billion (US$1.1 billion), compared with RMB3.2 billion in the same period of 20195.Total revenues in the third quarter of 2020 were RMB1,066.7 million (US$157.1 million), compared with RMB2,773.1 million in the same period of 2019, primarily due to an increase in the proportion of the Company’s business contributed from its marketplace business, which recognizes revenues on a net basis.Transacting members3 in the twelve months ended September 30, 2020, continued to increase to 13.0 million due to the Company’s ongoing refinement of its membership enrollment system since January 2020.Mr. Shanglue Xiao, Chairman and Chief Executive Officer of Yunji, said, “During the third quarter of 2020, we continued to focus on developing our differentiated supply chain management, promoting fast-moving merchandise with high repeat purchase rates, and supporting small specialty businesses to better serve our e-commerce community. At the same time, we made meaningful progress in the establishment of innovative marketing channels and utilized diverse content formats, such as short-form video and live streaming, to better present and promote those products sourced from our quality supply chain. Going forward, we plan to further leverage our supply chain’s competitive advantages in cost control and operational efficiency, establish collaborations with top-tier and mid-tier streamers to introduce more products to our e-commerce community, and provide support and resources to more of those joint-venture brands and emerging brands with high growth potential. Consequently, the success of these brands will help to continue fueling the growth and profitability of our own platform.”“Our third quarter financial results demonstrated the effectiveness of our cost control measures. On a year-over-year basis, we narrowed our loss from operations by 79.3% and our net loss by 14.9% in the third quarter. We also continued to improve our cost structures, maintain our strong cash reserves, and advance towards our goal of achieving healthy, profitable, and sustainable growth. Additionally, to meet our operational and liquidity needs, we continued to closely and proactively monitor our cash flow, making a consistent effort to secure increasingly favorable terms for Yunji in our settlement of payments while also sustaining a healthy level of working capital,” said Mr. Chen Chen, Chief Financial Officer of Yunji.Third Quarter 2020 Unaudited Financial ResultsTotal revenues were RMB1,066.7 million (US$157.1 million), compared with RMB2,773.1 million in the same period of 2019, primarily due to a decrease in revenues from sales of merchandise as a result of an increase in the proportion of the Company’s business contributed from its marketplace business. Revenues generated through the marketplace business are recognized on a net basis and contributed to marketplace revenues, while revenues generated from merchandise sales are recognized on a gross basis and contributed to sales of merchandise, net.Revenues from sales of merchandise, net, decreased by 62.8% to RMB919.0 million (US$135.4 million) from RMB2,472.0 million in the same period of 2019. The decrease was primarily due to the decrease in GMV related to merchandise sales as the Company continued to refine its resource allocation plan to further improve the operational efficiencies of its marketplace business on the platform.Revenues from the membership program were RMB4.9 million (US$0.7 million), compared with RMB206.7 million in the same period of 2019. The decrease was due to the Company’s ongoing refinement of its membership enrollment system. Beginning in January 2020, the Company has allowed any user to become a member and enjoy membership benefits free of charge for one year by simply registering for an account on the Yunji app. Revenues from the membership program in the third quarter of 2020 were from the deferred revenue of prior paying members.Revenues from the marketplace business increased by 51.1% to RMB130.4 million (US$19.2 million) from RMB86.3 million in the same period of 2019 as a result of the increased number of popular brands and merchants on the Company’s platform and the increased sales from a diverse range of sales channels on other platforms.Other revenues increased by 52.9% to RMB12.3 million (US$1.8 million) from RMB8.0 million in the same period of 2019 as a result of an increase in warehousing and logistic services provided to third parties.Total cost of revenues decreased by 67.0% to RMB751.7 million (US$110.7 million) from RMB2,280.4 million in the same period of 2019. The decrease was mainly attributable to the decline in merchandise sales, which recognize revenues on a gross basis. Total cost of revenues was mainly comprised of those costs related to the sales of merchandise revenue in the third quarter of 2020 as a result of launching the free membership program in January 2020.Total operating expenses decreased by 46.0% to RMB343.6 million (US$50.6 million) from RMB636.4 million in the same period of 2019.Fulfillment expenses decreased by 55.7% to RMB90.5 million (US$13.3 million), or 8.5% of total revenues, from RMB204.2 million, or 7.4% of total revenues, in the same period of 2019. The decrease was primarily attributable to: (i) reduced warehousing and logistics expenses due to lower merchandise sales and improved logistics efficiency, (ii) decreased third-party payment transaction fees due to lower commission rates, and (iii) reduced personnel costs due to headcount optimization.Sales and marketing expenses decreased by 42.9% to RMB158.9 million (US$23.4 million), or 14.9% of total revenues, from RMB278.4 million, or 10.0% of total revenues, in the same period of 2019. The decrease was mainly due to the reduction in member management fees as a result of improvements to member management efficiency.Technology and content expenses decreased by 53.0% to RMB42.3 million (US$6.2 million), or 4.0% of total revenues, from RMB90.1 million, or 3.2% of total revenues, in the same period of 2019. The decrease was mainly due to: (i) reduced server costs resulting from the better contract terms that the Company secured with its server providers, and (ii) reduced personnel costs as a result of headcount optimization.General and administrative expenses decreased by 18.6% to RMB51.8 million (US$7.6 million), or 4.9% of total revenues, from RMB63.7 million, or 2.3% of total revenues, in the same period of 2020. The decrease was mainly due to decreased share-based compensation expenses, including a reversal of share-based compensation expenses of RMB19.1 million that had been recognized in prior periods, and reduced other personnel costs as a result of headcount optimization.Loss from operations was RMB24.4 million (US$3.6 million), compared with RMB118.0 million in the same period of 2019.Net loss was RMB43.6 million (US$6.4 million), compared with RMB51.3 million in the same period of 2019.Adjusted net loss4 was RMB36.4 million (US$5.4 million), compared with RMB24.9 million in the same period of 2019.Basic and diluted net loss per share attributable to ordinary shareholders was RMB0.02 (US$0.003), compared with RMB0.02 in the same period of 2019.Recent Developments
Today, the Company announced that Mr. Chen Chen has resigned from his position as the Company’s Chief Financial Officer due to personal reasons, effective December 31, 2020. The Company is grateful for Mr. Chen’s valuable contribution to the Company during his term with the Company. In addition, the Company announced the promotion of Mr. Chengqi Zhang to Vice President of Finance. His responsibilities at Yunji have primarily included corporate finance, tax, funding, internal controls, legal and compliance.Mr. Zhang first joined Yunji in November 2019. Prior to joining the Company, Mr. Zhang had been an audit director at Deloitte since 2007. Mr. Zhang is a member of the American Institute of Certified Public Accountants (AICPA). Mr. Zhang received a Bachelor’s degree from Shanghai University of Finance And Economics.Use of Non-GAAP Financial MeasuresIn evaluating the business, the Company considers and uses adjusted net income/(loss) as a supplemental measure to review and assess operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines adjusted net income/(loss) as net income/(loss) excluding share-based compensation.The Company presents adjusted net income/(loss) because it is used by management to evaluate operating performance and formulate business plans. Adjusted net income/(loss) enables management to assess operating performance without considering the impact of share-based compensation recorded under ASC 718, “Compensation-Stock Compensation”. The Company also believes that the use of this non-GAAP measure facilitates investors’ assessment of operating performance.This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net income/(loss) is that it does not reflect all items of income and expense that affect the Company’s operations. Share-based compensation has been and may continue to be incurred in Yunji’s business and is not reflected in the presentation of adjusted net income/(loss). Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited.The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. Yunji encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.For more information on the non-GAAP financial measures, please see the table captioned “Reconciliation of Non-GAAP Measures to The Most Directly Comparable Financial Measures” set forth at the end of this press release.Conference CallThe Company will host a conference call on Thursday, November 26, 2020, at 7:00 AM Eastern Time or 8:00 PM Beijing/Hong Kong Time to discuss its earnings.In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive important details for this conference including the call date and time, a unique registrant ID, and a set of participant dial-in numbers to join the conference call.A telephone replay of the call will be available after the conclusion of the conference call for one week.Dial-in numbers for the replay are as follows:Safe Harbor StatementsThis 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 “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the quotations from management in this announcement, as well as Yunji’s strategic and operational plans, contain forward-looking statements. Yunji may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), 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. Statements that are not historical facts, including but not limited to statements about Yunji’s beliefs and expectations, are 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: Yunji’s growth strategies; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China’s e-commerce market; changes in its revenues and certain cost or expense items; the expected growth of China’s e-commerce market; PRC governmental policies and regulations relating to Yunji’s industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Yunji’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Yunji undertakes no obligation to update any forward-looking statement, except as required under applicable law.About Yunji Inc.Yunji Inc. is a leading social e-commerce platform in China that has pioneered a unique, membership-based model to leverage the power of social interactions. The Company’s e-commerce platform offers high-quality products at attractive prices across a wide variety of categories catering to the day-to-day needs of Chinese consumers. In addition, the Company uses advanced technologies including big data and artificial intelligence to optimize user experience and incentivize members to promote the platform as well as share products with their social contacts. Through deliberate product curation, centralized merchandise sourcing, and efficient supply chain management, Yunji has established itself as a trustworthy e-commerce platform with high-quality products and exclusive membership benefits, including discounted prices.For more information, please visit https://investor.yunjiglobal.com/Investor Relations ContactYunji Inc.
Investor Relations
Email: Yunji.IR@icrinc.com
Phone: +1 (646) 224-6957ICR, Inc.
Xinran Rao
Email: Yunji.IR@icrinc.com
Phone: +1 (646) 224-6957
__________________________
