Yeahka Announces 2020 Interim Results, Technology-enabled Business Services Realized Rapid Growth in Revenue and its Customer Base
HONG KONG,Aug. 27,2020 -- Yeahka Limited ("Yeahka" or the "Company",Stock Code: 9923),the leading payment-based technology platform in China,is pleased to announce the unaudited consolidated resultsfor the six months ended June 30,2020(the "Period" or the "Reporting Period").
Mr. Luke Liu,Chairman of the Board,Chief Executive Officer and Executive Director of the Company,said: "In the first half of the year,the covid-19 Pandemic triggered offline merchants to jump-start their digitalization process and the demand for technology services among China's small and micro sized merchants has been increasing rapidly. Guided by our mission to 'continuously create value for merchants and consumers',wefocused on the needs of millions of small and micro merchants in China,using payment services as the entry point to strengthen our technologyplatforms,to provide merchants with comprehensive technology-enabled business services. We continued to intensify the diversification of payment channels and rapidly expand our app-based payment services. In the first half of the year,the number of consumers connected by our payment services continued to increase.Meanwhile,we focused and promoted the development of our technology-enabled business services. The number of technology-enabled business service customers also rose rapidly as the conversion rate of payment service customers continued to improve. Driven by both the payment services and technology-enabled business services,our total net profit increased significantly compared with the same period last year."
Luke Liu added,"Looking forward,we will continue to provide innovative services through continuous technology and product upgrades,and help merchants improve their efficiency and customer acquisition capabilities by further fulfilling their unmet digital needs along their entire life cycle."
Financial Highlights
Total revenue for the period reached RMB1,077.1 million,representing an increase of 5.1% a year-on-year ("YOY"),mainly due to an increase in revenue from technology-enabled business services. Meanwhile,the revenue contribution from technology-enabled business services rapidly increased to 17.8% from 2.9% for the same period last year,among which,marketing services revenue amounted to RMB144.3 million,representing an increase of 1,182.5% compared with the same period in 2019; merchant SaaS products revenue amounted to RMB11.7 million,representing an increase of 227.7% YOY ; and fintech services revenue amounted to RMB36.0 million,representing an increase of 136.9% compared with the same period in 2019.
Gross profit amounted to RMB331.0 million,representing an increase of 16.5% YOY,with gross profit margin increasing to 30.7% from 27.7% for the same period last year.
The Company recorded a net profit of RMB222.6 million,as compared with a net loss of RMB18.6 million for the same period in 2019.
Research and development expenses amounted to RMB55.6 million,representing an increase of 133.7% compared with the same period in 2019,mainly due to an increased number of research and development personnel and increased investments in systems,big data,product development as well as research and development in relation to artificial intelligence and machine learning.
Business Highlights
Despite the impact of the Pandemic,the transaction counts of app-based payment services quickly recovered in the second quarter of 2020 and increased by 32.9% as compared with the first quarter.
The Company continued to intensify diversification of payment channels. The number of payment service partners in distribution channels,namely independent sales agents,sales partners,and SaaS partners,increased by 51.7% YOY to more than 9,000,SaaS partners increased by 72.3% YOY to over 700. Daily peak payment transaction counts of Fushi increased to over 2.1 million,which was 17.2 times of that in the same period of 2019.
The number of technology-enabled business service customers of the Company increased by 174.4% YOY to over 580,000.
The Company's technology-enabled business services achieved breakthrough growth. During the Period,total impressions of the Company's precision advertising platform increased by 478.8% as compared with the second half of 2019. For merchant SaaS products,sales volume of Smart Shopkeeper increased by 107.8% compared with the same period in 2019. For fintech services,during the Period,a total of RMB213.6 million transactions were granted or facilitated,representing a decrease of 38.3% compared with the second half of 2019. During the Period,the Company's M1+ delinquency rate by vintage (over 30 days overdue) remained stable at 5.7%.
Business Review
One-stop payment services
For the Reporting Period,as the Pandemic brought about varying extents of impacts to offline businesses,the Company's GPV decreased by 16.3% YOY to RMB634,637.1 million; and the number of active payment service customers decreased by 2.2% YOY to 4.7 million. However,as the Pandemic was contained in China and the offline consumption began to recover,the Company's GPV and the number of active payment service customers has been increasing every month since the beginning of the second quarter. Further,benefiting from the increasing number of consumers turning to local community stores for life necessities during the Pandemic,the number of consumers viathe Company'spayment servicesreached 491.9 million,representing a year-on-year increase of 115.5%. Moreover,transaction counts of the Company's app-based payment service recovered rapidly in the second quarter of 2020,increasing by 32.9% as compared with the first quarter.
The Company continued to promote diversification of payment channels,for the Period,the number of payment service partners in distribution channels increased by 51.7% YOY to more than 9,SaaS partners increased by 72.3% YOY to over 700. Through RYK Capital Partners Limited,the Company increased its capital in Fushi Technology (Shenzhen) Co.,Ltd ("Fushi"),a one-stop technology platform that enables functions such as automated ordering,aggregated payment collection,delivery management,integrated billing and reporting,intelligent store management and fintech services. As of June 30,2020,Fushi had reached more than 90,000 merchants in 16 cities across China,with daily peak payment transaction counts reaching over 2.1 million,which increased an additional 34.0% to over 2.9 million at the end of July. During the Reporting Period,with the Company's products and technology support,Fushi incorporated a membership function,which enables merchants to improve their customer loyalty and channel consumer traffic,and further to build up their own native traffic,providing a sound foundation for serving a growing number of merchants in the future.
Marketing services
The Company strives to create a marketing platform for precision advertising based on offline traffic. Leveraging the customer base of the Company's payment services,the Company's platform aggregates traffic from multiple scenarios and intelligently matches it with targeted users,maximizing the value of the Company's marketing services. During the Period,total impressions of the Company's precision advertising platform increased by 478.8% as compared with that of the second half of 2019. During the Reporting Period,the Company attracted a large amount of offline traffic from various QR code-based payment scenarios,including purchases from food and beverage establishments,car parks,gas stations,supermarkets and retailers,colleges and universities,as well as vending machines. This allowed the Company to accumulate a rich advertising inventory covering an extensive range of use case scenarios.
In addition,in March 2020,the Company launched Yuehuiquan,a coupon aggregation and distribution platform whichprovides merchants with simple and easy-to-use marketing toolkits. During the Period,Yuehuiquan was successfully integrated into the Company's ecosystem and across its merchant touchpoints,including Fushi,Smart Shopkeeper,Zhibaiwei and Juhuisaosao A value-transmission network connecting traffic on the Company's platform and merchant customers was established,so as to enhance the overall technology-enabled business service portfolio of the Company. During the Period,Tuozhanbao Internet Financial Services (Shenzhen) Co.,Ltd. ("Tuozhanbao") – the business operations of which have been subsequently transferred to Shenzhen Letuobao Technology Co.,Ltd ("Letuobao"),was acquired by the Company in 2019,contributed steady growth to the Company's marketing service revenue.
Merchant SaaS products
The merchant SaaS products provide various customized cloud intelligent business solutions to different industry verticals and feature multiple innovative functions including inventory management,customer relationship management,order management,and employee management.
The Company has developed a wide variety of scenario-specific merchant SaaS products,including Smart Shopkeeper,an integrated restaurant management solution. As a SaaS product integrating both software and hardware,Smart Shopkeeper features a variety of business services and technologies,such as payments,SaaS,marketing,and innovative artificial intelligence. Furthermore,Smart Shopkeeper can be integrated with the Company's other marketing service products,such as Yuehuiquan,to provide one-stop solutions to merchants. As the Pandemic was largely brought under control,the food and beverage industry recovered rapidly. The Company has been taking advantage of the market opportunities and has increased the online and offline sales channels of Smart Shopkeeper. The sales volume for the period increased by 107.8% YOY. In addition,the Company has strategically invested in Zhibaiwei. By capitalizing on Zhibaiwei's business deployment in the retail sector covering maternal and infant supplies,clothing and supermarkets,the Company will integrate its various technology products and operational services with Zhibaiwei,to provide integrated cloud intelligent business solutions to small and micro merchants.
The Company actively expanded the sales channels of its in-house developed product Juhuisaosao during the Reporting Period,a proprietary smart payment SaaS product that supports a wide range of integrated payment methods. The app features voice reminders for merchants when new payments arrive,thus minimizing the likelihood of missing or losing orders during rush hours. In addition,leveraging the big data capabilities of the Company's ecosystem,merchants' smart phones and WeChat Mini Program,Juhuisaosao enables merchants to gain additional insights into their business performance and facilitate their business decisions by providing functions including multi-dimensional transaction report and analysis,cash flow analysis and forecast. As of June 30,the Company has provided Juhuisaosao to over 11,000 merchant customers.
Fintech services
The Company has developed a variety of fintech services,including loan facilitation,entrusted loan and insurance referrals.
During the Pandemic,the management of the Company has carried out more prudent risk control measures,including substantially tightening credit policies and raising lending standards to reduce the loan amount. To help small and micro merchants meet their short-term financial needs while minimizing risks,the Company used artificial intelligence and machine learning algorithms to analyze and categorize their merchant databases. Leveraging other SaaS and marketing products,the Company also aimed to improve the prospects of small and micro merchants and boost their growth.
During the Reporting Period,the total amount of transactions that the Company facilitated was approximately RMB213.6 million,representing a decrease of 38.3% as compared with the second half of 2019,with a weighted average tenure of 9.5 months. As of June 30,the Company stabilized delinquency rates by vintage (over 30 days overdue) at around 5.7%,which demonstrates the effectiveness of the Company's credit risk management capabilities in various economic cycles. In addition,the steady growth of Company's insurance referral services,including the fund security insurance and deferred payment insurance developed together with cooperated insurance companies,have been maintained during the Period.
Outlook
As a pioneer in providing diversified technology-enabled business services to offline small and micro merchants,the Company will continue to concentrate on its app-based payment services. The Company will develop a broader product portfolio,leveraging its industry leading research and development capabilities,and increasing its strategic investments to develop the Company's ecosystem. The Company will help merchants improve their efficiency and customer acquisition capabilities by further fulfilling their unmet digital needs over their entire life cycle. At the same time,the Company will meet consumers' needs through merchants,creating more value for both customers and merchants. Meanwhile,the Company will gradually optimize and increase its product functionalities and types of technology-enabled services. With the integration and interaction of different products and functions,the Company will ultimately be able to build out and enable a technology ecosystem for routing merchant data traffic.
- The End -
About YEAHKA LIMITED (9923.HK)
YEAHKA LIMITED ("Yeahka" or the "Company") is a leading payment-based technology platform in China providing payment and technology-enabled business services to merchants and consumers. According to Oliver Wyman,we are the second largest non-bank independent QR code payment service provider in China,with approximately 14.0% market share in terms of transaction count in 2019. The Company's value proposition is a cohesive ecosystem that enables seamless,convenient and reliable payment transactions between merchants and consumers,and leveraging its vast customer base and data assets accumulated from payment services,to further offer a rich variety of technology-enabled business services,including (i) merchant SaaS products,which help customers improve their operational efficiency,(ii) marketing services,allowing customers to effectively reach their target markets,and (iii) fintech services,which cater to customers' financial needs.
For investor and media inquiries,please contact:
Yeahka Limited
IR team
E-mail: ir@yeahka.com
Christensen China Limited
Shirley Chan
Telephone: +852 2232 3933
Email: schan@christensenir.com
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
For the sixmonths ended 30June
2020
2019
RMB'000
RMB'000
Revenue
1,077,090
1,024,564
Cost of revenue
(746,135)
(740,560)
Gross profit
330,955
284,004
Selling expenses
(30,454)
(34,012)
Administrative expenses
(94,001)
(56,336)
Research and development expenses
(55,554)
(23,770)
Impairment losses on financial assets
(32,845)
(6,204)
Other income
7,385
2,981
Other gains – net
1,894
956
Operating profit
127,380
167,619
Finance costs
(4,587)
(2,353)
Share of losses of investments accounted for using the equitymethod
(4,265)
(6,367)
Fair value changes of convertible redeemable preferredshares
125,822
(141,939)
Profit before income tax
244,350
16,960
Income tax expenses
(21,709)
(35,608)
Profit/(loss) for the period attributable to equity holders ofthe
Company
222,641
(18,648)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Continued)
Unaudited
For the sixmonths ended 30June
2020
2019
RMB'000
RMB'000
Profit/(loss) for the period attributable to equity holders ofthe
Company
222,648)
Other comprehensive loss:
Items that will not subsequently reclassified to profit or loss
Currency translation differences
(28,784)
-
Items that will may be subsequently reclassified to profit orloss
Currency translation differences
(12,407)
(3,351)
(41,191)
(3,351)
Total comprehensive income/(losses) for the period
attributable to equity holders of the Company
181,450
(21,999)
Earnings/(losses) per share attributable to equity holders ofthe
Company (expressed in RMB per share)
–Basic
1.07
(0.39)
–Diluted
0.33
(0.39)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
Audited
As at
30 June
2020
As at
31 December
2019
RMB'000
RMB'000
ASSETS
Non-current assets
Property,plant and equipment
30,153
39,854
Intangible assets
166,362
170,676
Investments accounted for using the equity method
38,515
31,067
Prepayments and other receivables
37,393
32,279
Financial assets at fair value through profit or loss
41,726
41,046
Other non-current assets
61,732
90,450
Deferred tax assets
1,342
8,504
377,223
413,876
Current assets
Other current assets
7,710
46,698
Inventories
6,524
7,282
Trade receivables
101,090
43,528
Prepayments and other receivables
1,166,507
1,159,213
Restricted cash
55,157
162,124
Cash and cash equivalents
1,963,985
441,315
3,300,973
1,860,160
Total assets
3,678,196
2,274,036
EQUITY
Share capital
65
31
Reserves
3,120,276
260,345
Accumulated losses
(593,231)
(815,872)
Equity attributable to owners of the Company
2,527,110
(555,496)
Total equity
2,496)
LIABILITIES
Non-current liabilities
Other payables
35,534
56,880
Lease liabilities
9,665
17,568
Financial liabilities at fair value through profit or loss
-
1,373,447
Deferred tax liabilities
4,760
6,002
49,959
1,453,897
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION(Continued)
Unaudited
Audited
As at
30 June
2020
As at
31 December
2019
RMB'000
RMB'000
Current liabilities
Trade and other payables
973,899
1,164,851
Contract liabilities
10,934
25,910
Current tax liabilities
26,616
38,162
Lease liabilities
9,678
10,212
Borrowings
80,000
136,500
1,101,127
1,375,635
Total liabilities
1,151,086
2,829,532
Total equity and liabilities
3,036
